Why Hotels Will Disappear After 2040

Here's something that'll make your morning coffee taste bitter:

Imagine you just booked a "hotel" last week that was managed by an AI, paid for with Bitcoin, and had never been touched by a traditional brand regulation. The kicker? It used to be a decades old motor-lodge that some guy like me converted into flexible apartments years ago.

Robots clean the hotel.

Robots make the beds, do the laundry, and offer the same services we offer hotel guests today.

2 staff members for every 200 units.

Check in and check out was a breeze...and you talked to NOBODY.

Your ID was verified before you arrived and a blockchain like Chainlink Labs (LINK) secured the transaction through a PMS system "vibe coded" by the 63 year old hotel owner who barely knows how to make a comment on a Reddit, Inc. thread, let alone code an app.

The day before you leave, you receive a text from the hotel, and it's a video of an influencer you know, recognize, and follow, and said influencer (who gave promotional rights to the hotel owner to create an AI avatar of the influencer), called you by your name and said:

Okay, it's not real...yet. But the writing is clearly on the wall. Traditional hotels are toast by 2040.

Let me hit you with some numbers that should keep hotel executives awake at night. According to [NetSuite's 2025 research], AI adoption in hospitality is exploding at a staggering 60% annual growth rate from 2023 to 2033, with the market jumping from $90 million to over $8 billion. But here's what they're not telling you—this isn't just about chatbots and room service robots.

[Stanford's AI Index Report] shows that AI has already surpassed human performance in image classification, visual reasoning, and English understanding. Translation? By 2040, your front desk, housekeeping coordination, revenue management, and guest services will be run by AI systems that never sleep, never call in sick, and never ask for a raise.

The hospitality robotics market? It's projected to grow by more than 71% annually through 2034, reaching $107.24 billion according to Market Research Futures. My deep research reveals even more aggressive numbers: the hotel cleaning robot market alone will explode from $1.2 billion in 2024 to $5.4 billion by 2033—a 23.7% CAGR that proves automation isn't coming, it's here.

Here's where it gets really interesting. [Recent data shows] that 11.5% of travel agencies now accept cryptocurrency, making travel the leading sector for crypto adoption. But here's the bigger picture I'm seeing in my conversions: crypto isn't just a payment method—it's becoming the backbone of decentralized hospitality management.

Think about it: blockchain technology eliminates the need for traditional brand oversight, franchise fees, and corporate regulations. Smart contracts can manage everything from room bookings to maintenance schedules. By 2040, I predict crypto will be the primary currency for hotel transactions, not because it's trendy, but because it's efficient, highly secure, and removes the massive overhead of traditional brand structures.

The numbers support this shift: crypto users spend 30% more than traditional payment users, and travel and hospitality represents 14% of all crypto transactions. Airlines offering crypto payments saw 40% increases in bookings. This isn't speculation—it's market reality.

The big hotel companies see the writing on the wall. [McKinsey reports] that large hotel brands have increasingly turned away from hotel ownership, scaling through franchising and management instead. But here's the plot twist—they're about to reverse course completely.

By 2040, expect every major hospitality company to return to an asset-heavy structure, but not with traditional hotels. They'll own thousands of microbrands—small, hyper-local properties that used to be independent hotels, motels, or converted buildings. These won't operate under the restrictive brand standards we know today. Instead, they'll be AI-managed, crypto-operated, flexible spaces that adapt to local market demands in real-time.

Here's where my world collides with this prediction. [CBRE data shows] that over 151,000 units are currently being converted from other building uses, with 34,000 coming directly from hospitality properties. We saw a 17.6% increase in hotel-to-apartment conversions in 2023 alone.

Research confirms this is accelerating: the extended stay market is exploding from $53.24 billion in 2023 to $98.80 billion by 2030—a 9.4% CAGR driven entirely by the flexibility demands of remote workers and digital nomads.

But this is just the beginning. By 2040, the majority of what we call "hotels" will actually be flexible apartment-style extended stays—exactly what I've been pioneering with ULTRA Hotel Conversions™. These spaces will offer:

- Month-to-month flexibility with hotel-style amenities

- AI-driven pricing that adjusts by the minute based on demand

- Cryptocurrency payment systems with no traditional banking delays

- Zero brand regulations, pure market-driven operations

Research from Stanford's AI Index reveals a significant lack of standardization in responsible AI reporting among leading companies. This fragmentation is actually accelerating the breakdown of traditional hospitality standards. By 2040, the rigid brand guidelines that dictate everything from towel thread counts to lobby music will be obsolete.

Instead, AI will personalize every aspect of the guest experience in real-time. Why have uniform brand standards when AI can optimize each property for its specific market, weather, local events, and guest preferences? The standardization that made hotel brands valuable will become their greatest liability.Hotel-brand-logos.-Memorable-hotel-logos-and-names.pngHotel-brand-logos.-Memorable-hotel-logos-and-names.png

Current data proves this shift: 80% of hotels are using or planning to use AI for personalized offers, while 64% of hoteliers have already experimented with ChatGPT. The hotel management software market is growing from $5.28 billion in 2025 to $9.41 billion by 2032, but the real disruption is coming from no-code AI platforms that let operators build custom systems through simple conversation.

Here's the uncomfortable truth that [hospitality research] is already documenting: by 2030, hoteliers will operate with human staffs at least 50% lower than 2019 levels. Budget and extended-stay properties will see 75% reductions in human staffing.

My research shows this is conservative. Hotels implementing automation today already see 30-40% operational cost reductions. Extending this trajectory to 2040, we're looking at properties with 85-90% automation in budget segments and 60-70% automation even in luxury properties.

The US hospitality service robots market will grow from $1.26 billion in 2024 to $3.25 billion by 2032. This isn't job displacement—it's complete operational restructuring. The "hotels" of 2040 will be managed by AI systems with minimal human oversight, located in repurposed buildings, and operated as flexible living spaces rather than traditional accommodation.

After converting a few hotels into apartment communities and conducting deep research into industry trends, here's exactly what I see happening by 2040:

Basic function robots will be sweeping and mopping—this already exists and many retail stores are adopting it. [Brain Corp's AI floor-cleaning robots are already deployed in retail chains] and the commercial cleaning robots market is exploding from $535.53 million in 2024 to $2.71 billion by 2032. These bots will be controlled by newer Property Management Systems (PMS) with open-source customizations that AI will build for you. No more waiting months for PMS updates, AI will customize your system in real-time.

AI-built PMS and Revenue Management Systems (RMS) that owners can create from scratch by simply having a conversation with AI. The data proves this is happening now: 47.41% of the hotel software market is PMS systems, but no-code platforms are allowing custom hotel management software building "without coding." Think about it—why pay $50,000+ annually for a rigid PMS when AI can build exactly what you need? Current hotel PMS, RMS, and hospitality management platform companies will pivot to become branding and marketing companies with "AI services if needed." The smart ones are already preparing for this shift.

Maintenance requests will be predicted long before a form is filled out. The predictive maintenance market is exploding from $7.85 billion in 2022 to $60.13 billion by 2030—a 29.5% CAGR. IoT sensors combined with AI will know your HVAC system needs attention three weeks before it fails. Hotels using IoT already see 30% reductions in maintenance expenses and $45,000 annual energy savings for 200-room properties. [McKinsey's research on predictive maintenance] shows this can reduce maintenance costs by 30-50% while eliminating guest complaints.

Influencers and institutions will lease entire hotels to funnel guest leads. The medical tourism market is exploding from $144.5 billion in 2024 to $704.8 billion by 2033—an 18.47% CAGR. I'm already seeing this with medical tourism and corporate relocations, including partnerships like the Thai Medical Tourism Association with Expedia launched in March 2024. Owners will see the value of their hotels skyrocket, especially if they're near hospitals, airports, and entertainment districts. This isn't speculation—it's happening now in markets like Phoenix and Austin.

Social media influencers like my friend, Scott Eddy, are excellent examples of practitioners in the attention economy. In 2040, SEO rules and online traffic algorithms won't care If you're "paying to rank" on your search engine of choice (will search engines even be a thing in the future?). Viral superstars and influencer followings will be leading the high occupancy hotel economy in the future. Private equity may even purchase influencer sponsorship and influencer loyalty over web optimization/SEO. If you're not drawing eyes, you're not filling rooms.

Hotels will become more and more obsolete because they'll be converted into apartment-style extended stays due to the desired flexibility of future generations traveling wherever they need and staying as long as they need. The serviced apartment market is growing from $112.42 billion in 2023 to $248.92 billion by 2030—a 12.3% CAGR. [Hospitality leaders from Marriott and Reside]are already discussing how the upscale extended-stay segment will evolve to meet this demand, driven by hybrid work models and project-based employment.

Hotels will become living and remote work hubs with adjacent lifestyle amenities—thus becoming A-class apartment complexes with flexibility. This aligns perfectly with [EHL's research on future hospitality trends], which shows 2024 as the year for advancing mobile technologies and intelligent tools for better personalization. Current hotel occupancy rates are declining (down 2.7% YoY to 60.3%) while extended stay demand surges, proving the market wants flexibility over traditional accommodation.

Apartment communities will allow shorter-term, hotel-style guests on one side of their building while the other side isn't disturbed by nightly guests. This hybrid model maximizes revenue while maintaining resident satisfaction—exactly what we've implemented in our most successful conversions. The data supports this: properties implementing flexible stay options see 3x-5x increases in revenue per square foot.

What I've learned from converting over 150 properties is that the market doesn't want traditional hotels anymore. People want flexibility, affordability, and authentic experiences. The "hotels" that survive past 2040 will be the ones that embrace adaptive reuse and flexible apartment-style operations.

The research validates this completely: "bleisure" travel combining business and leisure is driving demand for extended stays, while weekday business travel is permanently reduced. The convergence of remote work, digital nomadism, and project-based employment is creating a massive market for flexible living solutions.

The question isn't whether this transformation will happen. The question is whether you'll be leading it or watching from the sidelines.

If you're a hotel or motel owner watching your occupancy rates decline and your profit margins shrink, you have two choices: wait for this transformation to crush your business, or get ahead of it now.

I've personally converted over 150 properties and helped dozens of hotel owners transform their underperforming assets into profitable apartment communities. The owners who act now—while the market is still shifting—are the ones capturing the biggest returns.

- 3x-5x increase in revenue per square foot

- 85% reduction in vacancy compared to traditional hotel operations

- Immediate cash flow improvement from long-term tenants vs. transient guests

- Massive reduction in operational complexity and staffing requirements

- 30-40% operational cost reductions through automation implementation

The data is clear, the trends are undeniable, and the window of opportunity is closing fast. My deep research shows this transformation will be complete by 2035-2040, not just beginning. Every month you wait is money left on the table.

I'm offering a FREE 30-minute strategy call to hotel and motel owners who are serious about conversion. We'll analyze your property, discuss your market, and create a clear roadmap for your transformation—no sales pitch, just straight strategy from someone who's been in the trenches and has the data to prove it works.

Book your free strategy call at [ultraextendedstay.com]

Don't let your property become a casualty of this industry transformation. Let's turn it into a success story instead.

The future isn't coming, it's here. Are you ready?

Andrew LeBaron is the founder of ULTRA Hotel Conversions™ and a pioneer in hotel-to-apartment adaptive reuse. His predictions are backed by comprehensive industry research and real-world conversion experience. Connect with him to discuss the future of hospitality and flexible living solutions.

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