Bed and Breakfast Inns NAICS 721191

Dec 8, 2025 - Artificial Intelligence Creeps Into the B&B Industry

• Artificial Intelligence (AI) is increasingly helping bed and breakfasts and small independent lodging stay competitive with large hotel chains. Once expensive and complex, AI tools are now accessible “plug-and-play” solutions that allow B&Bs to automate guest communications, streamline pricing, manage marketing, and reduce routine tasks. For example, the 30-room Sarasota Arms boutique hotel in New York used AI to adjust daily pricing, freeing over 10 hours a week and boosting revenue per available room by 11%. This automation gives staff more time to focus on personal touches, like greeting guests by name and tailoring experiences, which are central to the B&B experience. Despite the benefits, some owners remain cautious due to concerns about technical integration, staff training, cost, and protecting guest data, highlighting that thoughtful implementation is key for maximizing AI’s impact in the independent hospitality sector.
• The US hotel industry is being significantly affected by the government shutdown, with the American Hotel & Lodging Association estimating $650 million in lost revenue so far, equating to roughly $31 million per day in economic activity tied to hotel stays. Hotels alone directly employ about 2.1 million people, and the broader hospitality sector supports roughly 9.2 million jobs, meaning nearly one in every 25 workers relies on the industry. The shutdown has led to cancellations and delayed bookings from both business and leisure travelers, particularly during the critical holiday travel period. Occupancy rates in markets near federal offices have fallen sharply, and smaller independent properties report financial strain. Industry leaders warn that prolonged shutdowns could create ripple effects across tourism, dining, and local economies that depend on visitor spending. The uncertainty is also affecting hiring and operational decisions, leaving hotels to balance payroll obligations with declining revenue streams while maintaining service standards.

• A recent $9.5 million court settlement between online travel agency (OTA) umbrella company Bookings Holdings and the state of Texas demonstrates a willingness by regulators to crack down on junk fees in hotel bookings. Bookings, owner of OTA sites including Priceline.com and Kayak.com, was accused of hiding questionable costs like resort, amenity, and utility fees into a single, vague, “Taxes and Fees” line item. In addition to the monetary payment, Bookings has to disclose any added fees clearly and upfront. The case could be a bellwether of the effectiveness of the Federal Trade Commission’s 2025 Junk Fees Rule, which mandates added fees be clearly communicated to customers in the hotel and live entertainment industry. The rule in effect ends junk fees for those industries, with the Texas case being the first high-profile use of the new rule.
• The “aspirational travel” trend - those who put more of a premium on the meaningful experience or luxurious aspects of travel than the price - is a growing vacation niche and target for the B&B industry. The travel industry boomed post-pandemic (American spending on travel has increased every year since 2020, per the US Travel Association), and with that the trend toward booking high-end accommodations despite the price for the experience alone. (Per McKinsey, wealthy luxury travelers spent $84 billion on high end vacations in 2023.) B&Bs are making a comeback among those customers with selling points of small-town charm and local immersion, but also with Gen Z and Millennials, who increasingly seek out lifestyle matches (i.e., B&Bs as small businesses with strong sustainability practices). Industry trends of themed stays and package bundles, as well as improved in-room technology also have particular appeal to the aspirational travel set.