AI terms for hoteliers: MCP, GEO, agentic AI, and LLMs explained

Most people nod along. But let's be honest: half the people talking about "agentic AI" and "Model Context Protocol" don't actually know what those terms mean. They just know they're supposed to sound like they do.

You don't need to fake it anymore. This guide breaks down every AI buzzword currently invading hospitality, in plain English, without the technical jargon. Read it once, reference it forever, and actually understand what's happening and have informed conversations.

The shift happening right now

AI (Artificial Intelligence)

Computers doing tasks that used to require human thinking. Understanding language, recognizing patterns, making decisions. It’s an umbrella term for many different things, i.e. Machine Learning, GenAI, Image processing (and understanding).

For hotels: Many travelers now ask ChatGPT "find me a hotel in Miami Beach" instead of googling or opening Booking.com. AI is the new starting point for trip planning. Instead of calculating occupancy forecast in Excel - a Machine Learning model that predicts it automatically, with better accuracy. And there are way more examples.

The parallel: Weather forecast, self-driving cars, voice assistant on your phone. Now AI conversation.

Generative AI (Gen AI)

AI that creates new content. Text, images, responses, all based on what it learned from examples. ChatGPT is generative AI. Or the image generators.

The difference: Google shows you 10 links. ChatGPT writes you a custom answer. Instead of "here are hotel websites," it says "based on your budget and preferences, here are three hotels I recommend."

Old search showed results. New AI has conversations.

Agentic AI

AI that takes action, not just answers questions. Agentic AI is the newest technology around AI these days - it’s very early stage and keeps evolving, almost on a daily basis

Regular AI: Guest asks "What hotels have pools in Austin?" AI responds: "Here are five hotels with pools"

Agentic AI: Guest says "Book me a hotel with a pool in Austin next weekend" AI searches availability, compares options, checks live prices, makes the reservation, sends confirmation. All in one conversation.

A concierge who recommends restaurants versus a concierge who recommends AND books the table AND arranges your car. Agentic AI completes the entire task.

How AI finds hotels

GEO (Generative Engine Optimization)

Making sure AI can find your hotel, understand it, and describe it accurately.

SEO for Google. GEO for ChatGPT, Claude, and Gemini.

Without good GEO: AI might not recommend you at all. AI describes you incorrectly ("they don't have parking" when you do). AI sends guests to OTAs instead of your direct booking. AI shows outdated rates from 2023.

With good GEO: Current property descriptions everywhere. Accurate amenities and photos. Consistent information across all platforms. Structured data AI can read easily.

MCP (Model Context Protocol)

MCP is an open standard designed to standardize how AI systems (ChatGPT, Claude, Gemini) connect to external tools, systems, and data sources. Think of a USB-C connector for AI.

For hotels this standard lets AI check your live rates and availability right now, not guess based on the information found online.

Breaking down the acronym: Model = The AI behind ChatGPT, Claude, Gemini Context = Information the AI needs Protocol = Standard rules for exchanging that information

Why it matters: Without MCP, AI works from potentially outdated web scrapes. With MCP, AI connects directly to your booking system for real-time data.

Remember when travel agents needed GDS (Global Distribution System) to access hotel inventory? MCP is the same infrastructure, but for AI instead of human travel agents.

Simple version: MCP gives AI a direct line to your front desk. Instead of guessing availability from old websites, AI can check in real time.

API (Application Programming Interface)

How software systems talk to each other.

Your booking engine has an API that lets external systems check availability and create bookings. Your channel manager has an API that connects to Booking.com and Expedia.

For AI connectivity: Your systems need APIs so AI can access your live rates and availability. No API equals no current information for AI.

Most modern hotel systems have APIs. Older legacy systems might not.

MCP is an “abstract layer” between the AI system and the API that gives the AI all the information needed for what and how to get out of the API.

Real-time data

Information that updates the moment things change. Your rates and availability reflect actual current inventory, not yesterday's status.

Why it matters: If AI tells someone you have rooms when you're sold out, that's a broken experience. If AI shows last month's rates, you lose bookings.

Imagine your front desk looking at yesterday's occupancy report to answer if you have rooms tonight. That's AI working without real-time data.

What needs to be real-time: Room availability. Current rates. Booking restrictions. Property information. Recent reviews.

Where travelers are talking to AI

LLM (Large Language Model)

The AI technology powering ChatGPT, Claude, and Gemini. Massive AI systems trained on huge amounts of text to understand and generate human language. It’s a sub-category of GenAI.

Why it matters: LLMs power the conversations travelers are having about trip planning. ChatGPT is using GPT-4 (an LLM). Claude uses a different LLM (Sonnet). Same concept, different companies and their own models.

Major LLMs travelers use: GPT-4 (ChatGPT). Claude (Anthropic). Gemini (Google).

ChatGPT

The most popular AI chatbot. 800 million weekly active users who can now ask it to plan trips and book hotels.

The scale: 800 million ChatGPT users each week. That's 133 times larger than the iPhone App Store at launch. Not a small trend. A massive shift in how people search.

If your hotel isn't accessible through ChatGPT, you're invisible to this audience.

AI agent

An AI system that acts on someone's behalf to accomplish tasks. Future travelers might have personal AI agents that plan trips, compare hotels, and make bookings for them.

What this looks like: Instead of you asking ChatGPT for hotels, your AI agent proactively says "You have an upcoming trip to Boston next month. I found three hotels matching your preferences, all under budget. Book the waterfront one?"

Corporate travel agents will book for business travelers. Soon everyone might have a personal AI agent, not just corporate travelers.

Bookings and money

Direct booking

Reservations made directly with your hotel (website, app, phone) instead of through Booking.com or Expedia.

Why it matters: Zero commission (versus 15-20% to OTAs). You get full guest data. You control the relationship. Higher profit margins.

The AI opportunity: AI platforms can send guests straight to your booking engine. Commission-free. You might pay a subscription fee for technology, but not per-booking commissions.

OTA (Online Travel Agency)

Booking.com, Expedia, Hotels.com, Priceline. Third-party sites that sell hotel rooms and take 15-20% commission.

The AI reality: OTAs are already live on AI platforms. Booking.com and Expedia were ChatGPT launch partners. They're capturing AI bookings right now.

Hotels without direct AI presence? Your bookings default to OTAs.

Distribution and systems

Distribution channel

Any platform where guests can discover and book your hotel. Your website is a channel. Booking.com is a channel. ChatGPT with hotel booking capabilities is becoming a channel.

Just as you added OTA channels in the 2000s and mobile in the 2010s, you now need to consider AI as an emerging distribution channel.

Traditional channels: Your website. Phone reservations. OTAs (Booking.com, Expedia). GDS (for travel agents). Metasearch (Google Hotels, Trivago).

Emerging AI channels: ChatGPT. Claude. Gemini. Perplexity. Other AI platforms.

Rate parity

Keeping your room rates consistent across all distribution channels. If you charge $150 on your website, you should charge $150 (or more) on Booking.com and in AI recommendations.

Rate parity protects your brand and prevents channel conflict. It stops guests from learning to always check OTAs because rates might be lower there.

AI considerations: As AI platforms start showing rates, those rates need to match everywhere else. Inconsistent pricing confuses travelers and damages trust.

Integration

The technical connection between different software systems that allows them to share data. Your PMS might integrate with your booking engine, channel manager, and payment processor so they all stay synchronized.

Why AI matters: Connecting to AI platforms requires a new type of integration. Your systems need to share data with AI platforms through MCP servers or the data will be taken from the internet..

Modern cloud-based systems usually integrate easily. Older legacy systems might require custom development work or middleware to enable AI connectivity.

Performance tracking

RevPAR (Revenue Per Available Room)

A key hotel performance metric. Calculate it by dividing total room revenue by total available rooms. If you have 100 rooms and make $10,000, your RevPAR is $100.

Why AI matters: As AI becomes a distribution channel, you'll want to track RevPAR by channel. How does AI-driven business perform compared to OTA bookings or direct website reservations?

Attribution

Identifying which marketing channel or touchpoint led to a booking. Did the guest find you through Google search? An OTA? AI recommendation?

Why AI matters: As travelers start using AI for planning, understanding attribution becomes more complex. A guest might discover you through ChatGPT, visit your website to research more, then book through Google. Where do you attribute that booking?

Most hotel analytics aren't set up to track AI attribution yet. This will need to evolve as AI becomes a more significant discovery channel.

Conversion rate

The percentage of people who complete a desired action. If 100 people view your hotel in AI recommendations and 3 book, your AI channel conversion rate is 3%.

Why AI matters: Understanding conversion rates by channel helps you optimize. If AI traffic converts at 5% but OTA traffic converts at 2%, that tells you something about the quality and intent of those different audiences.

What you need to know as a hotelier

The landscape is shifting fast

ChatGPT reached 800 million weekly active users faster than the internet, smartphones, or social media reached mainstream adoption. 

OTAs are already there

Booking.com and Expedia launched as ChatGPT app partners on day one. They're capturing AI-driven bookings right now while many hotels are still figuring out what MCP means.

You don't need to be a tech expert

Understanding these terms doesn't mean you need to implement everything immediately. But knowing what MCP, GEO, and agentic AI actually mean helps you have informed conversations with technology vendors, evaluate whether your current systems are AI-ready, make strategic decisions about when and how to invest, and understand what competitors are doing.

The opportunity

AI platforms can send travelers directly to your booking engine. No OTA middleman, no 15-20% commission. That's the prize for hotels that establish AI connectivity.

Start with education, not implementation

You don't need to panic. You do need to understand. Use this glossary as a reference when buzzwords come up in conference presentations, vendor pitches, or strategic planning meetings.

Hotels that understand the landscape will make better decisions about when to act and which technologies to prioritize.

One final analogy

Hotel websites in 2000: "What's a website? Do we need one?" 2002: "Okay, we built a basic site with our phone number" 2005: "We added online booking" 2008: "We're optimizing for search engines" 2010: "We're doing mobile-responsive design"

AI connectivity now: 2024: "What's MCP? Do we need it?" 2025: "Okay, we're learning about GEO" 2026: "We're establishing AI visibility" 2027: "We're driving direct bookings through AI" 2028: "We're optimizing AI conversion rates"

Where you enter this timeline is up to you. But understanding the terminology is step one.

Now when someone mentions "agentic AI" or "MCP connectivity" in a presentation, you'll know exactly what they're talking about and why it matters for your hotel.

Quick reference: Buzzword decoder

When you hear = What it means

Agentic AI = AI that completes tasks from start to finish, not just answers questions

MCP = The technical standard that connects AI platforms to hotel data

GEO = Making sure AI can find and accurately describe your hotel (like SEO for AI)

LLM = The technology behind ChatGPT and similar AI systems

Real-time data = Current rates and availability, not outdated information

Direct booking = Reservations through your booking engine, not OTAs

Channel manager = Software that keeps inventory synchronized across distribution channels

Integration = Connecting different software systems so they share data

API = How software systems talk to each other

Now you're ready for any AI conversation. No jargon, no confusion. Just a clear understanding of what's happening and what it means for your hotel.

Ready to move beyond basic understanding?

Now that you know the terminology, you can make informed decisions about AI connectivity. Lighthouse Connect AI makes your hotel discoverable, understandable, and bookable across ChatGPT, Claude, Gemini, and Perplexity.

Built on MCP standards. Real-time rates and availability. Direct bookings with zero commission.

Learn more at mylighthouse.com/connect-ai