Operators Who Ignore New Tech Will Be at a Severe Competitive Disadvantage
By Bob Rauch
Scheduling and training processes are becoming streamlined; revenue management has improved optimizations, and SEO and marketing strategies rely on AI to enhance online visibility. Chatbots are used for customer service and exist with many hotel providers today.
Practical Uses of AI in Hospitality
We just revised our menus and wine lists while utilizing AI, and while AI provides insights and depth, it still takes a human to know what is best in a market. This is true with all use cases for AI. It can speed up many processes, support innovation, etc., but there needs to be human knowledge present to question, validate and understand it. Let’s dig into some examples of using AI in hospitality.
Generative AI
As defined by McKinsey and Co., generative AI algorithms can create new content, such as audio, code, images, etc. Commonly reported uses of generative AI tools are in marketing and sales, product and service development, and service operations. Think ChatGPT — you can submit a list of five social media post ideas to promote your hotel. By giving the tool some background into the target market, it can share feedback on your posts, offering the best time to post, which one of the five would be best for engagement, or coming up with a new idea altogether.
The risks of AI include inaccuracy, cybersecurity and intellectual property infringement, according to an April 2023 survey done by McKinsey & Co. Looking specifically at generative AI’s predicted impact on jobs, service operations are the only function in which most survey respondents expect a decrease in workforce size. AI is not a job killer.
Personalization
Improvements in revenue forecasting accuracy alone are significant for hotel revenue management, but there are additional AI use cases that can improve customer relationships.
AI can improve digital marketing by enhancing customer personalization, generating better content — through tools such as ChatGPT — and tracking user journeys from website to website and click to click. Adding a chatbot provides information to potential guests and can encourage more guest bookings and create conversations.
One risk of chatbot use is frustration if a guest asks a question and the content does not exist on the website. The hotel must ensure that websites have comprehensive and correct information. Another potential drawback of a chatbot is AI hallucinations, which is when the chatbot provides false information.
Energy and Sustainability in Hotels
AI can optimize energy efficiency and sustainability by adjusting thermostats in guestrooms and adapting lighting and artwork to craft a bespoke environment.
For example, the Nest Thermostat is designed to learn the timing of heating and cooling, allowing the room to become more energy efficient.
The goal is for AI to improve hotel operations and streamline workflows, allowing human staff to attend to other essential tasks. One example is using robots to take extra towels, toothpaste, or food and beverages to guestrooms. Hotels should learn to love robot technology in 2024.
Innovation in Hospitality
As artificial intelligence continues to gain traction, it will be essential to remember that while there are plenty of unknowns, there are myriad opportunities to harness its power. MMGY expects AI to play a more prominent role in the following key areas of hospitality:
- Expanding creative concepting capabilities.
- Cross-channel campaign optimizations.
- Data analysis, insights and measurement.
Currently, revenue-management systems use data analysis to optimize pricing strategies based on demand and competitor pricing. New AI technology for revenue management should be used to price packages and personalize offers based on user preferences.
Technology can also be utilized for hiring and training. Automated recruiting tools use AI to find applicants and chatbots can screen applicants. After hiring, e-learning platforms support employee training and development.
Cybersecurity
Ransomware attacks against significant hospitality companies have already occurred, and we will likely see a new focus on cybersecurity in 2024. Training staff must be a critical focus of hospitality in the future.
AI can improve the way hotels manage day-to-day operations. By deciphering patterns and predicting demand, AI enables hotels to optimize staff schedules and efficiently manage resources. This translates to a smoother, more compelling experience for guests. From trip planning to digital concierge to luggage storage on check-out, AI is changing the hospitality industry.
While we are still behind other industries, we are striking the balance between art and science.
