Applications of Generative AI in the Hospitality Industry

Two decades ago, a popular belief about the applications of AI was that AI would first emerge as a tool to replace humans in activities requiring manual labour- mechanically, followed by technical jobs- through continuous learning. Still, creative jobs were expected to be least affected as they needed experiential learning. However, today we witness AI complementing humans in creative activities faster than any other sector. AI can draft imaginative stories and poems, create pictures of people that do not exist, code, and make infotainment videos, all at a fraction of the time taken by a human creator.

All this has been made possible by Generative AI.

What is Generative AI?

A Generative AI is a type of Artificial Intelligence that produces output through text, images, or other media in response to user prompts. It learns the patterns amongst data it is pre-trained on and creates similar original content by forecasting expected responses. Generative AI is a subset of deep learning, which applies artificial neural networks to process more complex patterns than traditional machine learning. Depending on the utility, Generative AI models can be classified as text-to-text, text-to-image, text-to-video, and text-to-task models. Some of the most popular Generative AI tools available for public usage include OpenAI’s ChatGPT, Dall-E, and Google’s Bard. According to Goldman Sachs, Generative AI could cause a seven per cent increase in the global GDP over ten years. Generative AI, when integrated into a business, can transform business processes and gives the company a competitive advantage. Integrating Generative AI in a business can have various use cases, including streamlining customer interactions, enhancing personalization, curating content, and detecting fraud by identifying patterns.

Need for AI in Hospitality Industry

The primary goal of the hospitality industry has always been to improve customer experience. The industry is highly competitive and has witnessed various technological advancements in the last decade. Today, customers can perform multiple activities in the hospitality industry, be it ticket booking, reservations, onboarding, or check-out, using their mobile devices anytime, anywhere. Moreover, the advent of technologies such as IoT, blockchain, and cloud brings a wide range of use cases for any industry section, saves capital, minimizes employee-customer interactions, and leads to a more satisfied customer. For example, opting for cloud services reduces the need for in-house IT infrastructure, and IoT revolutionizes the maintenance of electronic equipment. Therefore, for any player in the hospitality industry, it becomes prudent to integrate emergent Generative AI technology, like other technologies soon, to improve its service quality and deep-root personalization.

Applications of Generative AI in Hospitality

Some of the applications of Generative AI in hospitality industry include the following:

Content Creation:

Generative AI can be an excellent tool for creating high-quality, original content for a business’s website and social media. This content can include blogs, poems, videos, articles, images, and audio aimed at providing value. Such content can be used for promoting services, new product launches, or building connections with prospective customers. Such content can be entertaining or informative in nature based on the requirement of the business. Generative AI can also tailor personalized content based on user persona, which can be used to create customized newsletters, promotional e-mails, and social media content.

Chatbots:

Integrating Generative AI into chatbots can massively enhance the quality of customer interactions. These can act as a bridge between the employees and the customers that personalize information provided to the customer based on their needs. Generative AI can detect patterns in data and provide a roadmap to the business for continuous improvement in services provided to guests. Additionally, these interactions can be used as training data to personalize the services provided to the customer in the future.

Virtual Assistants:

Integrating Generative AI in virtual assistants can limit the need for employee-customer interaction in the hospitality industry. An interactive virtual assistant can ensure that the right service reaches the right customer at the right time. These virtual assistants can handle guest queries, make recommendations, and assist with various tasks, such as booking appointments, ordering room service, or providing local information. This reduces the workload on the employees and enhances the overall guest experience. It can also help curate customer feedback based on its interactions with the customer and help bring continuous improvements in service customization. In the future, Generative AI integrated Virtual assistants will likely take over as virtual concierges in hotels, restaurants, and resorts for customer on boarding and service delivery.

Demand Trends Identification:

Generative AI can analyse historical data, market trends, and competitor pricing to optimize service rates dynamically. It can also analyse social media and identify patterns that may not be conspicuous to a human. These patterns can help in understanding trends in demand. Particularly for the hospitality industry, these can be game changers for managing and allocating resources for serving customer needs while maintaining competitive pricing. Generative AI can also optimize energy consumption by analysing usage patterns and adjusting heating, cooling, and lighting systems to reduce energy wastage and operational costs. Generative AI can also identify trends in the industry and further complement in recommending suitable themes for content curation.

Language Translation:

Word-to-word translation may not be suitable in most languages since each language’s grammatical and semantic style is unique. Generative AI can understand these differences and help create more accurate translation outputs. For the hospitality industry, this can be used to communicate with guests effectively, understand their concerns, provide them with the exemplary service, and obtain their feedback, enhancing the customer experience at every stage.

AI Endorser:

Generative AI can create a virtual endorser that relates to the target segment or matches the aspirational persona. Using this persona, a company can utilize customer data to create an ideal personality that can be used to create accurate AI imagery to promote the business or its services through Generative AI. Unlike celebrity endorsement, this endorsement would not require the company to pay a considerable fee to the endorser but could serve its purpose effectively. An excellent example of this would be the world’s first female AI news anchor Xin Xiaomeng. In India, a regional news channel also launched in 2023 its first AI news anchor to mark developments in generative AI.

Targeted Ads:

Through pre-existing data and data obtained over time through interactions with customers, generative AI can help create advertisements that effectively address individual customers’ pain points. Businesses can ensure the right message reaches the right audience by using below-the-line promotional approaches like E-mails, social media marketing, and targeted search engine marketing.

Additionally, Generative AI can be integrated with robotics and used to improve the overall efficiency of daily operations. This could aid in streamlining cleaning and maintenance processes, improving the onboarding experience and room service delivery. Generative AI can help personalize trip planning for every prospective customer based on interactions with the customer and available past data. It can summarize these interactions with the host, establishing communication at both ends. To sum up, Generative AI can give innovators and early adopters of technology an edge over traditional service providers.

Challenges of Implementing Generative AI

Nonetheless, all technologies have some pitfalls, and Generative AI is no exception. Generative AI bases its outputs on prior training data, and in its attempt to provide similar content, it can amplify biases and inaccuracies. Integrating Generative AI within a Business’s systems could be easier said than done, as it would require a high level of expertise and infrastructure transformation. At the same time, the risk of technological barriers and opportunity costs remains. Moreover, Generative AI could leave many guests with privacy and ethical concerns in pursuing personalization.

Therefore, it becomes crucial for hospitality businesses seeking technological upgrades to be mindful of the possible challenges. By supervising the training data and striving to minimize biases and inaccuracies, the company can ensure the correctness and neutrality of outputs. By aligning training data with its values and laws of the land, the business can monitor brand differentiation and the legality of recommendations given by Generative AI. Lastly, the business can curate a ‘Digital Empathy’ towards customers by training the AI on ethics and morality.

The potential benefits of integrating Generative AI supersede its potential dangers. Hence, it would be wise for businesses to start exploring possibilities using Generative AI sooner rather than later.

Despite today’s technological advances, Generative AI is still developing and can have mind-boggling prospects. Generative AI, in future, could synchronize with Augmented Reality and Virtual Reality technologies and give customers a virtual tour guide experience. It may then be able to forecast imminent desires and business needs to provide the best recommendations to the customer and hyper-personalize hospitality services. In future, Generative AI could compose unique music that fits well with a brand’s value proposition, leaving customers with a unique experience that compels them to revisit branches of the business more frequently. Recent research by Mckinsey estimates that Generative AI could add the equivalent of $2.6 trillion to $4.4 trillion annually across 63 use cases. The future, though unpredictable, looks bright for the hospitality industry through the application of Generative AI.