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For as long as there’s been technology, hospitality businesses have evolved alongside it. In 1894, The Netherland Hotel in New York City introduced the first in-room telephones. To this day, guests expect in-room telephones in every hotel.
That’s how it works: technology comes along, hotels adopt it and guests expect it. And today’s biggest advancement, artificial intelligence (AI), is no different. It’s been the talk of the town now for a while, and for good reason. AI improves the guest experience, improves efficiencies across the board and saves you money. So, what could it do for your hotel or hospitality business?
Before we look at how AI works within the hospitality industry, let’s go over the basics – because it can get confusing, real 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.
Explore AI fundamentals, use cases and risks in the hospitality industry in our ebook The Ultimate Guide to AI in Hospitality.
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 an eye-watering $15.7 trillion to the global economy by 2030. IndustryARC says thatTravel and hospitality AI, is estimated to surpass $1.2 billion by 2026, 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:
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.
AI has a wide range of uses across various facets of hospitality. Think about where you’d most like to streamline operations: front desk, catering, events, maintenance, housekeeping or revenue management, for example. The good news is that every department has an AI application!
Implement AI-powered messaging or chatbots. This technology improves the customer experience by enabling your venue to assist guests digitally, such as answering FAQs and providing information about hotel amenities.
Wyndham Hotels & Resorts recently invested in Canary AI to help their hotels “free up time to focus on offering personalized guest services through a more streamlined check-in process or gathering valuable feedback upon checkout.”
Offer AI-driven concierge robots that provide recommendations for dining, entertainment and activities based on guest preferences and behaviors. Take Connie, for example, Hilton’s AI robot concierge developed by IBM. She’s programmed to interact with guests and respond to the questions guests would commonly ask the concierge. With each interaction, Connie learns and adapts to provide more detailed answers.
Responding to guest reviews is an important part of managing your online reputation, but it’s important to reply to reviews on time. There are two ways AI can help you here. It can suggest responses that you edit and post yourself, or it can automatically generate and post an appropriate response.
Once you have a way to respond to reviews, you can implement processes for collecting more of them. For example, Canary’s contactless checkout encourages guests to leave positive reviews through a brief, customizable survey you can automate to send after they vacate the room.
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 specialized 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.
AI is a new technology, so we understand if you’re hesitant to jump on board. Research is key. And remember: use AI to supplement, not replace. There is a way to leverage technology without losing the human interactions that make hospitality so great. 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.
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