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It’s no secret that artificial intelligence (AI) offers the hotel industry competitive advantages. Hospitality-focused AI tools can transform every aspect of the hotel experience, from improved guest services to streamlined hotel operations.
If you’re considering hopping on the AI bandwagon, we commend your commitment to innovation. Industry Arch estimates the travel and hospitality AI market will surpass $1.2 billion by 2026. Below, we’ll look at how hotels can use AI and share examples of what that looks like in practice.
Key takeaways:
Before we look at how AI works within the hospitality industry, let’s go over the basics, because it can get confusing fast. What is AI? How do hospitality businesses use it?
AI is the development of computer systems that perform tasks requiring human intelligence, such as learning and problem-solving. Put simply, these computer systems are trained to think and learn like humans.
So how does this help hospitality businesses? You can hand over various tasks to AI (especially ones that are boring or time-consuming) and increase your workforce’s focus on customer service and other vital areas.
Predictive and generative AI are two similar approaches to AI serving distinct purposes and functions within a hospitality business.
Predictive AI studies historical data, identifies patterns and predicts likely outcomes — like offering personalized recommendations to customers based on their purchase history, for example. Generative AI creates new data based on prompts or existing data. Think Chat GPT or Google’s Bard.
Modern hospitality businesses are no strangers to technology. From the early- to mid-1900s, when telephones and air conditioning hit the market, to self-check-in and guest messaging in the 2000s, hotels have never hesitated to adopt the latest advancements that promise to enhance the guest experience.
As AI technology has continued to develop, its use cases in hospitality have increased exponentially. Today, hoteliers across the globe are seeing AI chat on their website drive more direct bookings, answering over 80% of guest requests with guest messaging powered by AI and expanding their ability to upsell to travelers with the right product at the right time.
According to a PwC estimate, AI could contribute $15.7 trillion to the global economy by 2030 as hotels and hospitality venues all over the world leverage AI to pad their bottom lines and power more efficient workforces.
This means understanding how AI benefits the hospitality industry (and your hotel) is vital. Today, AI helps your teams work smarter, not harder. This is because of several factors, including:
AI tools for hotels automate the time-consuming tasks, like responding to frequently asked questions and confirming booking details. This enables hotel staff to focus on more strategic and guest-centric activities.
By using machine learning algorithms, hotels can analyze data on guest preferences and behavior to create more personalized experiences. This not only increases customer satisfaction but also boosts brand loyalty.
AI can make revenue management far easier for hoteliers in multiple ways. Instead of leaving revenue managers to interpret tables and spreadsheets, AI algorithms can analyze market demand, competitor pricing and historical data to adjust room rates in real time, creating optimized prices and maximizing revenue and occupancy rates.
Additionally, upselling tools with built-in AI consider the preferences, interests and purchase history of guests when making suggestions. Predictive AI allows you to offer add-ons throughout a stay according to guest preferences, ensuring they have the chance to make purchases at the time when they are most likely to convert.
Hotel brands like Hilton, Intercontinental Hotels Group and Wyndham Hotels & Resorts are just a few of the recognizable brands implementing many of these AI examples in hospitality.
With the right hotel-centric AI tools, you can streamline guest and staff communication, help with staff shortages, and make informed decisions about building maintenance. Here are a few ways you can incorporate AI technology into your hotel operations.
While chatbots aren’t a new concept, their quality and breadth have expanded greatly thanks to ChatGPT and similar tools. Now, hospitality-specific AI technology allows hotels to leverage concierge bots and digital assistants to handle many guest requests, freeing up hotel staff to focus on more important human tasks.
By leveraging AI, today’s chatbots can answer frequently asked questions guests have about check-in times, WiFi access and local recommendations for area attractions.
Some technology, like Canary AI, can prioritize guest requests by urgency and escalate them to a human as needed. Plus, it’s all done with your consistent brand voice and grammatically correct messages.
A McKinsey study shows 71% of consumers want more personalized guest experiences, and 76% are frustrated if they don’t get it. Hospitality-focused tools like AI-powered chatbots and digital concierges improve the guest experience by offering personalization at scale.
Hotel managers understand the value of upselling, but it requires training and nuance to do it well. Predictive AI can help. For example, AI upsell tools can offer families with young children tickets to a local amusement park and, at the same time, offer a couple a bottle of wine or a room upgrade.
Such upsells can increase ancillary revenue by more than 200% and boost guest satisfaction.
Guests prefer a seamless digital experience when they travel, which can include mobile check-in and prompt responses to messages. For example, Skift’s Hospitality Trends for 2025 reports that 53.6% of guests want contactless check-in and checkout, and another 39.3% want mobile guest services.
AI solution can handle these tasks so hotel staff can focus on the guests. Staff can also utilize AI to analyze data and help them make informed decisions about guest room allocation, occupancy rates and building maintenance, among other things.
Online reviews offer insight into your guests’ preferences — if you’ve got time to study them continually. Not only can AI help you get more reviews, but it can also help you scour them for patterns in the feedback and deliver their responses in an easy-to-read format. Now, you can spot areas for improvement in minutes vs. hours of manually building a spreadsheet.
Plus, strong online reviews improve your hotel’s online visibility. Your AI tool can prompt guests to leave a review, and when it’s positive, the AI tool asks if they want to leave the review on Booking.com or TripAdvisor. There’s no awkwardness from your front desk staff in asking for reviews.
Skift’s Hospitality Industry Trends report found travelers want convenience, control and comfort. More specifically, 43.2% of travelers want voice-controlled speakers and smart lighting.
AI’s ability to analyze real-time data of smart technology and optimize energy efficiency means energy savings that pad your bottom line. Guests will be happy, too, as customers are increasingly searching for brands that prioritize sustainability.
At a high level, revenue management is your business’ pricing strategy determined by market demand and your competition.
Every hotel manager knows they’re sitting on perishable inventory—if you don’t sell the room today, that opportunity is gone. Predictive AI scours historical data to make future predictions on occupancy, customer satisfaction, competitive analysis and distribution channels.
For example, a hospitality-specific AI solution can pull data based on occupancy rate, average daily rate (ADR), revenue available per room (RevPar), segmentation, distribution channel and other key performance indicators. The more informed your team, the better you can maximize revenue.
Predictive analytics can reduce maintenance issues in key equipment and lower utility usage. AI sensors monitor real-time data on hotel equipment to alert your maintenance team of potential issues.
Besides avoiding big-ticket problems, predictive analytics can lower day-to-day energy costs by turning off lights and air conditioning in unoccupied rooms.
The hospitality industry is rife with data breaches and fraud, which can eat into your bottom line as much as 5% to 6%, according to the Association of Certified Fraud Examiners.
AI tools with built-in fraud detection reduce fraud and chargebacks and protect your guests’ data.
When understanding the impact AI can have on hospitality, it’s important to understand it from a holistic perspective.
AI could have a tremendous impact on the success of your business, but there are risks and downsides to consider. Having these in mind while adopting AI will help you do it effectively and ethically.
Implementing AI within your hotel comes with certain responsibilities, including protecting your guests’ data. The AI system you use must comply with data protection regulations such as PCI DSS.
If you choose to implement AI, it’s important to use it ethically. That means, for example, training your AI model to avoid discrimination and biases. It’s also a good idea to define roles and responsibilities for AI system oversight, maintenance and decision-making. Lastly, make your AI algorithms transparent to guests and employees and pressure-test your AI for robustness, security, data quality and compliance.
AI is an extremely powerful tool for your hotel, but it’s certainly not able to handle everything—nor do guests want it to. There are still many valuable elements to having human interaction in the hospitality sector for special requests and personal touches. Hospitality AI is a great way to automate the rote, everyday tasks your staff has to take on, freeing them up to provide a face-to-face experience where it matters the most for guests.
As you can see from these AI examples in hospitality, AI tools help hotel staff make informed decisions about everything from room rates to how to scale personalized service. Today’s digitally-savvy travelers expect the convenience of a seamless digital experience. AI tools built for the hospitality industry can help you surpass guest expectations.
Canary understands how important this balance is. Canary AI is tailored to the hospitality market, helping your business streamline guest communication, personalize interactions and prioritize requests. Schedule a demo today to see it in action.
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