Transforming Hotel Experience with Artificial Intelligence

October 13, 2021

Let us begin by understanding what is Artificial Intelligence. Artificial Intelligence is the umbrella term for any machine which can simulate human intelligence. It basically refers to tasks performed by machines that are generally associated with cognitive functionalities.  

One prominent feature of AI is that it can self-correct and fine-tune its algorithms to provide more accurate results. An AI system learns from all kinds of data fed into it and builds upon the existing learnings. The more data is fed into an AI system, the better it gets in dealing with complex issues.  

AI is already all around us!  

The almost ubiquitous chatbots we see on websites, the smart assistants such as Siri and Alexa, which understand not only the speech patterns but also the connotations, the predictive analytics used in fintech firms, the google maps, google translation, self-driving cars, drones, video surveillance, everything uses AI. All these technologies are used actively by people either at work or for entertainment or to gain information. Thus, it will not be an exaggeration to say that people are used to the latest tech and expect it everywhere.  

A case for AI implementation in the hospitality industry  

Various industries have already hopped onto the AI bandwagon, and it will be a blunder for any sector not to leverage the cutting-edge technology to augment its offerings. A survey conducted by Mckinsey showed that 58% of the respondents, which represented the full range of regions, industries, company sizes, functional specialties, and tenures, had utilized AI in at least one business function. Services and Service-operation functions were the top implementers of AI. Hospitality, being a service industry, has also been going through a digital transformation lately and now needs to focus on AI in the coming years.  

One of the significant metrics against which a hotel is measured is its capacity to cater to guest demands quickly and efficiently. It is no hidden fact that customers' preferences and habits have evolved over time, and they are accustomed to quick information service. Most tech-savvy and impatient among the guests are the millennials and GenZ. They use sophisticated gadgets and technologies and spend over $4000 /year on travel. Their tech arsenal is full of the latest gadgets such as the newest smartphones, laptops, voice-activated speakers and whatnot. Generally speaking, the wait time for someone well versed in technology is extremely low. Even the minutest latency in issue redressals leads to a significant drop in customer satisfaction.  

Where can AI be implemented?  

AI chatbots can be helpful with instant query resolution and on multiple other fronts. It can be implemented to understand a variety of data points and perform predictive recommendation tasks. The more an AI chatbot is functional, the more it learns from the data and gets better at dealing with complex queries. Several high-end hotels have already implemented digital concierges. These AI concierges perform unparalleled services, as found out by an Oracle study which states- "an average of 70% of the guest queries is now handled by AI-enabled response technology in hotels that have already implemented the AI". In financial terms, 89% of the hoteliers agree that AI significantly reduced the hotel's operating costs.  

Machine Learning can be used for analytics to understand digital patterns. Guests leave their digital footprints everywhere: while paying at an eatery, at the gym in a hotel, or booking other services through the hotel concierges, etc. AI enables the hotels to convert this information into insights. For example, if a guest uses the gym facilities regularly on his stay, it will make sense to expect similar behavior from him on the next stay as well. In terms of personalization, offering this guest gym-related complimentary services such as a spa/sauna will make sense rather than offering something completely unrelated to his interests. Thus, the algorithm gives the hotel an added advantage to map the personal taste and behavioral traits of a customer with cross-selling and up-selling opportunities.  

AI/ML is used in many other ways to strengthen the offerings of the Hospitality Industry:  

  • A virtual assistant in a texting app can help suggest useful information like nearby places to visit, services that guests can avail of, basic troubleshooting info in the room and more. This virtual assistant will help reduce the queries addressed to manned desks. Furthermore, AI/ML algorithms can help recognize patterns from large heaps of databases. Example: - with AI technology, Accor hotel offers guests premium and personalized offers based on their previous behavior at a price where the guest had previously shown "willingness to pay". Thus, increasing their upsell and cross-sell capabilities. Also, the use of AI gives the staff more time to concentrate on value-added tasks rather than answering repetitive questions.  
  • A basic voice recognition system in the room can control the lighting or the AC temperature.  
  • AI can also help with back-office tasks such as automating bills and check-out & check-in optionsRobotic Process Automation (RPA) is a tool that can do exactly these kinds of repetitive tasks which are generally done by humans.  
  • With online reviews becoming such major drivers in how people perceive the hotel services, AI can help understand the feedbacks and perform sentiment analysis to make hotels understand which of their offerings work and which don't. For instance, the Dorchester collection wanted to understand the preferences and feedbacks of their high-end guests. So instead of traditional methods, they analyzed the reviews of their priority guests on various review sites using AI/ML. They were surprised to find that their guests were not happy with their breakfast offerings. They also realized that their guests wanted more variety and wished to customize their breakfast options.  
  • AI can also help in sustainability. For example, the LighStay program at Hilton can predict water, energy, and waste usage and costs. It can track the consumption and map it against the predictive models and Hilton's competitor hotels. As Hilton has properties throughout the globe, every penny saved on energy can reflect in the revenue in a big way.  

To conclude, although the hospitality industry was late to the AI party, it is now implementing and experimenting a lot with it. Now that people are vaccinated and traveling, it is imperative for hotels to implement the latest technologies. They must do so not only to beat their competitors but also to satisfy the evolving needs of their customers. Although, currently, most AI technologies gain attraction only for novelty purposes rather than their usability, any tech that doesn't involve an AI element will be considered obsolete in the coming days. Similarly, any service sector not implementing AI will struggle to survive because customer experience and quality of service are of paramount importance in the current business landscape.  

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