Hospitality 2020 – The Next Big Things
June 7, 2018 10:24am
By Robert A. Rauch
Hospitality’s turnaround in both profits and technology over the past eight years has been rather phenomenal. Revenues and profits have grown steadily and there has also been a significant improvement in the use of technology. Previously, the hospitality industry lagged behind most industries when it came to technology. Today, that is rapidly changing.
Rather than try to focus on everything that is going on with our industry like the blowing up of mobile, personalization of services, brands, soft brands, online travel agencies (OTAs), Airbnb, GDPR, 5G, cyber-crime and crisis management, I am focused on two big things. Artificial Intelligence (AI) and Blockchain. Why? Because they will transform hospitality in the 2020s. AI will lead a change in jobs from the mundane to hi-tech and Blockchain will lead a change in how we account for things. Both will shake things up but ultimately both changes will be for the better.
AI is here to stay and it can enhance a hotel’s reputation, increase revenues and make the customer experience better. There are several areas where AI is playing a role in hospitality. First, for a simple definition of AI, loosely translated from Merriam-Webster, “anything a computer can do that formerly was considered a job for a human.” AI is good at recognizing words it hears, translating languages and has some reasoning ability as witnessed by the app Waze as it assesses traffic speeds and drive times.
AI may eliminate some jobs but it is likely to create many as well. McKinsey & Co. predicts that the adoption of automation may impact 75 million jobs or much more but may provide 20 million or more new jobs by 2030. Yes, people will be forced to learn new skills like software development, computer systems analysis, computer programming and the like but there is a true need for human involvement in the development and operation of computers.
Today’s AI cannot solve problems unless it has been shown how to solve it. One of the new breakthroughs is in the development of Digital Assistants or AVAs for automated virtual assistants. Various types of AI-driven technologies are employed today by hotels and restaurants including chatbots, voice-enabled devices and robotics. According to Hospitalitytech.com, “giving guests a level of autonomy supported by ‘”on the ground’” staff and a personalized experience” has led to competitive differentiation.
The Sheraton Westport has Angie, a digital room assistant. Angie can assist with in-room dining, controlling the room TV, lighting, temperature and music, all of which can be remembered for the next visits. Autodesk Inc. is replacing its chatbots with AVAs that have been trained to have emotional intelligence. Customers who appear upset can then be treated with empathy. This is still in the development stage but I believe we will see this very soon and this will transform the digital concierge.
Guests are already accustomed to receiving recommendations from digital platforms. “Interactions for hotel bookings that are enriched with intelligent chatbots offer immense convenience to customers…” according to Mitul Makadia, founder of Maruti Techlabs. Makadia goes on to say, “built in combination with call center agents, conversational AI in hotels will fuel digital reservation processes, helping hotel businesses upsell relevant services such as spa, body care treatments and dinner reservations.”
Our service robot at our Fairfield Inn & Suites in San Marcos, CA is designed by Savioke. Named Hubert by our team, he delivers food, beverages and various sundry items as well as bath items or anything that fits in his storage compartment. A video of him in action will give the viewer a complete robotic experience though you are welcome to come visit for a firsthand review.
Due to the number of workers compensation claims about injured backs, we are planning to talk to Maidbots about vacuuming, the single largest challenge for housekeeper health. This will aid our housekeepers just like our robot is aiding our guest services team. In addition to guest experience improvements, robots can improve the health and well being of our team members while reducing workers compensation claims.
Blockchain is a clear and incorruptable path from the hotel to the guest that has the ability to create more direct and lower- fee transactions. This direct route is a potential disruption to OTAs and that is a possible game-changer. Blockchain technology has the capability to improve loyalty programs and perhaps change the landscape of tracking digital assets. This digital ledger can provide significant efficiencies and savings for hospitality companies and might radically change how work gets done.
Currently, each of the hotel databases owned by the brands and the online travel agencies (OTAs) are operating in a vacuum. With blockchain technology, it is possible to create a low-cost and decentralized approach to managing information. A company that had all brand preferences and travel data for each individual could manage all data via blockchain technology. This could include rental cars, Uber trips, airline flights, loyalty programs and more. It is also possible that the information would be more secure in the blockchain as the data log is replicated across many computers rather than one central computer that has minimal data. Hence, it could be more resistant to attack by hackers.
I’m a proud alumni of Deloitte albeit almost 30 years ago and they have studied both Blockchain Technology and Robotic Process Automation (RPA). RPA can be utilized by various loyalty programs and might end up assisting with compliance of the recently enacted General Data Protection Regulation (GDPR). The combination of RPA and Blockchain will be a blockbuster soon. Keep your eyes open and enjoy the summer!
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Robert A. Rauch, CHA is an internationally-recognized hotelier, CEO, president and founder of RAR Hospitality, a leading hospitality management and consulting firm based in San Diego. Rauch has over 35 years of hospitality-related management experience in all facets of the industry.
Contact: Robert A. Rauch
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