Is artificial intelligence the future of the hospitality industry?

It seems as if a week doesn’t go by without artificial intelligence (AI) making headlines. One week it’s universities scrambling to put policies in place regarding OpenAI’s ChatGPT — which can generate a paper on any topic as fast as a student can feed it prompts — and the next it’s tech giants racing to dominate the AI-powered chatbot game. In 2023, artificial intelligence is a hot topic in just about every sector of the economy, and the travel and hospitality industry is certainly no exception.

The hotel industry is increasingly automated

Robotics companies are testing the waters with high-tech servers, but we are still a long way off from the day when hotels will be staffed by intelligent machines (even if ongoing labor shortages have a few hoteliers wishing they could hire Rosie, the robot maid from The Jetsons, to provide room service).

Not every property is destined to be a “smart hotel”, but the trend toward increased automation and data-driven decision-making in the hospitality industry is unlikely to slow down anytime in the near future.

How are hotels using AI technology?

How, exactly, are leading brands today using artificial intelligence in the hospitality industry? From a guest perspective, you might never see any of it. Josiah Mackenzie of Hotel Operations cites Philip Rothaus, a Managing Director with Alvarez & Marsal’s Corporate Performance Improvement's Travel, Hospitality & Leisure practice in Miami (and former Global Travel AI Lead for Accenture), who sees two primary applications for AI technology in hotel businesses:

Automating things, like quickly recognizing a face or a word
Quantifying relationships between data sets to come up with predictions

“AI is frequently thought about in the most extreme terms,” Rothaus says. “It’s either seen as this very scary force that’s going to automate all of our jobs away and change the nature of our lives — or it’s seen as some sort of nirvana that is not attainable for mere mortals. But AI is math, not magic.”

You're likely already using it

Mackenzie further cites Jessica Kramer, CEO of Lodgistics, who shared the following insight on a recent Hotels Magazine podcast: “You might be using AI already in your tech. AI already exists in a lot of the software platforms hotels are using. AI won’t be its own layer — it will be part of the tools we’re using.”

The best example of this might be a property management system (or PMS), which is a key component of any savvy hotel’s tech stack.

A PMS is a solution that facilitates the hotel's booking management and administrative tasks. From housekeeping to reservation management and electronic payments, everything flows through the property management system.

Data collection is the key

Data is the key. Beyond automating previously manual tasks, property management systems also hold a lot of data that can help hotel operations make informed decisions, and ultimately create better experiences for hotel guests.

Creating a better customer experience should be the main focus of hotel employees because guest satisfaction is the metric by which hospitality businesses live or die.

A hotel's PMS can be the central repository for customer data, which can be segmented based on such factors as demographics and spending patterns, length of hotel stay, or the extent to which individual clients use on-site facilities such as the spa, gym, restaurant, or casino.

Armed with this information, hotels can then use it to further enhance the guest experience through carefully tailored services and personalized promotional offers.

Benefits of AI in the hospitality industry

Mackenzie notes a number of ways that artificial intelligence can be useful in the hospitality sector today. These include facilitating bookings, supporting the pre-arrival process with personalized recommendations, streamlining the check-in process, synthesizing customer feedback for operational insights, optimizing workflow for staff, and revenue management.

Let's look at some of AI's potential benefits for hotels in more detail. These include:

Increased efficiency and productivity: AI automates repetitive and time-consuming tasks, freeing up staff time for more important tasks. This can result in increased efficiency and productivity, as well as cost savings for hotels.
Improved guest satisfaction: Artificial intelligence provides customers with a seamless and convenient experience, which can significantly improve guest satisfaction. For example, guests can use voice-activated devices to control features in their hotel rooms or access information about the property and its surroundings.
Predictive maintenance: AI software enables hotels to predict and prevent maintenance issues, reducing downtime and ensuring that guest needs are met at all times.
Personalized customer experiences: Artificial intelligence enables hotels to offer personalized service to guests through the use of technologies such as chatbots and virtual assistants that can communicate with guests in real-time and recommend services based on their preferences and past experiences.

The power of personalization

Personalization is indeed powerful, and fuelled by customer data, it has rapidly become a game-changer in the hospitality industry.

In a recent article, Hospitality Net predicted that hotels “will be ramping up personalization in 2023, by combining CRM [customer relationship management] and online behavior data to tailor offers and communication around guests’ preferences.”

Data analysis can improve ROI

As IDS Next CEO Binu Matthews observed in a recent Hospitality Net op-ed: "Leveraging data and analytics can revolutionize the effectiveness of digital marketing and help personalize the guest experiences for hotels to improve the overall ROI.

"Particularly, predictive and prescriptive analytics are essential data strategies for small and large businesses," Matthews continued. "Predictive analytics helps to find potential outcomes, while prescriptive analytics looks at those outcomes and finds more options. These analytics will significantly help marketers to formulate and optimize a successful business strategy."

Analytics allow for informed decisions

Hotels that offer PressReader as a guest amenity can use its built-in data-analytics function to get in-depth insight into how guests are using the platform. This empowers management to analyze data in order to draw important conclusions and make informed decisions based on user adoption.

By providing stats on app usage, including which publications customers are reading from what categories, hotels can also gauge which topics interest guests the most.

That knowledge can help inform decisions on room décor, treatment offerings at the spa, and innumerable other factors that can add up to a memorable guest experience.

What artificial intelligence can't do

At Hotel Operations, Mackenzie also cautions that there are things artificial intelligence can't do. Most of these come down to the plain fact that a computer simply lacks the human capacity for actual intelligence when it comes to being able to draw conclusions from available data and make wise choices.

Artificial intelligence is incapable of thinking critically or developing new theories based on original insights.

Nor can it empathize, which is a major consideration when it comes to customer service, and one that will ensure human involvement remains a key factor in the hospitality industry.

AI is not a substitute for human interaction

As beneficial as artificial intelligence can be, it's important for hotel owners to remember that, as Mackenzie points out, it can't do everything.

It will never take over every function involved in running a hotel, nor would the majority of guests want it to.

Powerful technology can help streamline operations, but human connection remains a crucial component of the customer experience in the hotel industry.

That's why it's a good idea to give potential guests some degree of choice when it comes to how high-tech they would like their experience with your brand to be.

Some might very well appreciate the convenience of being able to check in and out without ever having to deal with another human, but many guests still prefer to be greeted by the smiling faces of the front-desk staff.

The future of AI in hotels

AI technology and machine learning continue to evolve, and their use in the hotel industry is expected to increase in the coming years.

Some of the future prospects for artificial intelligence in the hospitality industry include:

Advanced personalization: We touched on this earlier, but AI is expected to become even more advanced in personalizing the guest journey, providing visitors with tailored recommendations and services based on their preferences and past experiences.
Integration with IoT: Watch for the integration of artificial intelligence with the Internet of Things (IoT) to result in more seamless and convenient experiences for guests, as well as increased efficiency and productivity for hotels.
Virtual and augmented reality: Expect AI-driven virtual- and augmented-reality technologies to become more widespread in the hotel industry, providing guests with immersive and interactive experiences.

Providing the best possible experiences

From automating tasks and providing personalized experiences to improving guest satisfaction and streamlining operations, the benefits of artificial intelligence are many.

As the technology continues to evolve, hotels are well-advised to embrace AI and incorporate it into their operations, in order to stay competitive and provide customers with the best possible experiences.

Hotels that invest in AI — and use it effectively — will see significant benefits, including increased efficiency and productivity, improved guest satisfaction, and remaining a step ahead of their peers.

Is artificial intelligence the future of the hospitality industry?

The hotel industry is increasingly automated

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