AI in hospitality: how artificial intelligence is transforming the hotel industry


Artificial intelligence (AI) has the potential to make an enormous impact on the travel and hospitality industry. To stay competitive, businesses are already shifting, from rote rule-based automated systems like chatbots towards intelligent cognitive agents that can handle raw data, engage in more natural human-like interactions and continuously learn and improve.

By combining AI technology with advanced analytics tools and the latest property management systems, the industry can now deliver more personalized services, create better value and provide guests with more memorable experiences.

Intelligent cognitive agents can process vast amounts of data, including customer preferences, behaviors and feedback, to offer personalized recommendations and tailored services. These agents can understand and respond to customer inquiries in a more natural manner, elevating the overall guest experience. They can also continuously learn from interactions and improve their performance over time, which gives early adopters an advantage.

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AI tools can improve hotel operations

The use of AI in hospitality can certainly enhance customer service, but it extends beyond guest interactions. It can also optimize various operational aspects, such as revenue management, inventory control and resource allocation. By leveraging AI-powered analytics, businesses can make data-driven decisions, optimize pricing strategies and allocate resources effectively to maximize profitability.

Artificial intelligence also enables hospitality businesses to gain deeper insights into customer behavior, preferences and trends. By analyzing this customer data, businesses in the travel and hospitality industry can identify patterns, anticipate guest needs and proactively offer individualized services and recommendations. This level of personalization not only enhances the customer experience, but also fosters guest loyalty and repeat bookings.

The transformative power of artificial intelligence in the hospitality industry extends to every level, from pre-stay marketing to post-stay factors like customer feedback and analytics.

Optimized pricing, marketing and messaging


The implementation of AI technologies can begin even before a guest arrives at the property. Via AI-powered virtual tours, hotels can provide potential guests with an accurate picture of the rooms and amenities on offer. This empowers guests to make well-informed decisions about their accommodations, leading to higher satisfaction and better price segmentation.

AI can also help optimize pricing strategies by analyzing market trends, competitor pricing and customer behavior. Machine learning algorithms can analyze vast amounts of data to recognize patterns and make real-time pricing recommendations, maximizing revenue and occupancy rates.

For instance, if a conference or other major event leads to a surge in hotel bookings nearby, artificial intelligence software can automatically adjust prices to align with the rising demand.

Aviation industry expert Matthew Klint has pointed out that such software, which is already in use in the airline industry, is constantly evolving. He anticipates the emergence of systems capable of deciphering “unstructured data”, such as identifying specific seat assignments and hotel rooms based on Instagram photos.

Improved services at lower costs

The guest experience is the paramount focus in the hospitality industry, and artificial intelligence presents an opportunity to take it to new levels. By combining chatbots and automated room check-in, hotels and hospitality businesses can significantly improve the overall customer experience. Guests enjoy the convenience, efficiency and personalized attention provided by AI technologies. This, in turn, increases the likelihood of guests choosing to return in the future, leading to higher rates of repeat bookings and improved guest loyalty.

AI-based virtual assistants can also provide personalized recommendations, handle guest inquiries and offer 24/7 support. These systems can understand guest preferences, track their past interactions, and tailor their responses accordingly, creating a more personalized and engaging experience for each guest.

Moreover, by reducing manual processes and improving operational efficiency, artificial intelligence creates giant cost savings and resource optimization for hospitality businesses. Streamlined operations and enhanced guest satisfaction translate into improved revenue generation and profitability for hotels and other hospitality establishments.

Here are some of the ways AI can help simultaneously improve customer satisfaction and productivity in the hospitality sector.

Reduced waiting times and better service


Artificial intelligence can facilitate a seamless check-in process through facial recognition technology or mobile apps. This eliminates the need for lengthy paperwork, reduces waiting times, and improves the overall guest journey.

Artificial intelligence chatbots can provide 24/7 concierge service, assisting guests with inquiries, bookings and other tasks. These chatbots can collect valuable data on customer behavior and preferences, which hotel management can use to improve marketing efforts and personalize future interactions.

Hotels like the Radisson Blu Edwardian in London and Manchester, for example, are already using artificial intelligence to streamline guest services. Edward, the virtual concierge, is a chatbot that works on a text-notification basis.

Thanks to Edward, guests can now:

  • check in or out without the physical intervention of hotel staff

  • place room service orders in a few taps.

  • seek 24/7 assistance without having to call the front desk

Improved security

AI-assisted surveillance systems can monitor security footage and detect suspicious activities or unauthorized access in real time. Biometrics, such as facial recognition technology, can also be used for access control, ensuring only authorized personnel can enter restricted areas. This contributes to a safer experience for guests and lower spending on security personnel.

Multilingual AI for an international clientele

In the hospitality industry, guests arrive from all over the globe. Chatbot translators can make life much easier for international guests when they book their rooms by recognizing languages and translating guest inquiries in real time.

The latest generation of AI chatbots can even directly communicate with your guests in their language, and more advanced versions will also collect and translate guest reviews, take restaurant bookings, and make recommendations in your guest’s native language.

All of this not only improves foreign visitors’ experiences but also expands the potential customer base and cuts down on productivity losses from language mix-ups.

Smart hotel rooms for optimal comfort


AI-connected devices and sensors can be integrated into smart hotel rooms to provide automation and personalized experiences. Voice-controlled assistants can adjust lighting, temperature and entertainment systems according to guest preferences. Artificial intelligence can also monitor energy consumption patterns and optimize energy usage, reducing costs and improving sustainability.

These possibilities will especially benefit seniors, people with disabilities and other customers with special requirements.

Improved upselling through personalized service

AI technology will play a significant role in the marketing of the hospitality industry by enabling targeted and personalized upselling. By analyzing a customer’s past interactions with a hospitality brand, such as bookings, reviews and preferences, AI algorithms can provide personalized recommendations.

For instance, artificial intelligence can suggest specific room types or amenities based on a guest's previous behavior. In the future, AI tools could even recommend local restaurants, theatres and outings, offering a high level of local knowledge akin to a tour guide.

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Vast improvements in hotel operations

Artificial intelligence can optimize various operational aspects in the hospitality industry, such as revenue management, supply chain logistics and staff scheduling. Predictive analytics algorithms can also analyze historical data to forecast demand patterns, allowing businesses to optimize inventory levels and minimize waste.

AI technology can also automate routine tasks, freeing up human staff to focus on more value-added activities. All of this means that in the near future, the greater profitability and efficiency of AI-powered hotels will leave technological laggards far behind.

Better post-service analysis and customer retention


Artificial intelligence technologies are unprecedented tools for analyzing customer sentiment and brand loyalty in the hospitality industry, especially in the post-trip phase. By using these algorithms, hospitality companies can gain deep and valuable insights into customer sentiment, preferences and loyalty, as well as direct feedback shared on social media platforms and other online channels. This enables businesses to make data-driven decisions, vastly improve customer experiences, and build personal, long-term relationships with their guests.

Sentiment analysis: what do people think of your brand?

AI-powered sentiment analysis, with the help of natural language processing, can help businesses understand the sentiments expressed by customers in their online reviews, social media posts and other online activities.

Algorithms can continuously monitor social media platforms for discussion of a hospitality brand, enabling hotel businesses to track customer sentiment in real time. This lets firms quickly respond to customer feedback, address complaints and get back to customers in a timely and proactive manner.

By analyzing positive, negative, and neutral responses, a hospitality business can accurately gauge customer satisfaction and identify areas for improvement.

Loyalty: what keeps hotel guests coming back?

Artificial intelligence can analyze thousands of data points to assess the efficacy of loyalty programs and other perks. By examining consumer preferences, behaviors and interactions with these programs and use of specific amenities and services, businesses can identify which program features attract customers and which may be perceived as adding low value. This data analysis can assist hotels in optimizing loyalty programs to enhance customer retention and loyalty.

Personalized communication makes guests feel special

Based on AI-generated recommendations, hotel chains and service providers can create personalized mail, videos, merchandise or other forms of targeted content to send to guests. These communications can include information about new offers, recommendations, tips, and other relevant content based on individual preferences, previous interactions and other factors. This personalized approach enhances the guest experience and strengthens customer loyalty.

AI tools for staff recruitment


When it comes to the ongoing labor shortage in the hospitality industry, this technology just might have a key role to play. Machine learning is already helping recruiters find the right hotel staff.

Top hotel brands like IHG utilize personality profiles and gamification-based tests to identify candidates who are the best fit on multiple levels. This approach not only helps eliminate personal biases among recruiters but also ensures a more comprehensive evaluation.

Transforming the hotel industry at every level

Artificial intelligence and machine learning have the potential to transform the hotel industry at every level — from planning, marketing and customer acquisition to operations, guest experience and amenities. Hotel owners can use AI-powered tools to improve post-sale service, data analytics and customer retention.

If AI is the future of the hospitality industry, the future is now.

What AI-powered tools does your hotel use to improve the guest experience? Let us know, and learn more about how we’re partnering with hotel operations to help their properties stand out.  

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