Hotel Boards Are Debating Encryption Standards While AI Quietly Sets Tonight's Room Rate

Hotel boards are spending their AI-governance time in the wrong place, according to a Hospitality Net opinion piece by Terence Ronson. Boards default to data-privacy checklists and vendor compliance certifications while nobody asks who is accountable when the algorithm itself gets a decision wrong. As Ronson puts it, “an hour spent on encryption standards…can pass without anyone once asking whether an algorithm is quietly setting tonight’s rate.” AI already runs revenue management, staffing, guest communications, and F&B forecasting inside most hotel portfolios — and because those decisions repeat thousands of times a day, a single pricing or classification error isn’t isolated, it’s a pattern that can touch many guests before anyone notices. His fix: name individuals with override authority, define measurable “drift” indicators that flag when an algorithm degrades, and write clear escalation protocols instead of leaving oversight implicit.

The gap Ronson describes at property level shows up at the top of the org chart too. BCG’s “Split Decisions” survey of CEOs and boards found 61% of CEOs believe their boards are rushing AI transformations, while 75% of board members rate their own AI understanding as equal to or better than their peers — a direct contradiction BCG frames as a communication failure, not a technical one. BCG’s Kristy Ellmer asks the same underlying question Ronson is asking about hotel boards: “Where are we just keeping up, and where is AI actually creating competitive advantage?”

Ronson has made a version of this argument before. In an earlier piece on third-party AI risk, he proposed four questions every hotel operator should ask a vendor: what autonomous actions can the system take, what containment exists if it misbehaves, can every action be audited afterward, and who has the authority to intervene. That piece warned that “human in the loop” is often marketing language rather than real governance, and that oversight “has to be built into the architecture” — not bolted on after a vendor contract is signed.

For hotel boards, the practical shift is from paperwork review to real-time accountability: naming who owns an algorithm’s mistakes is a governance decision that costs nothing to make and nothing to enforce until the day it’s the only thing that matters.