Changes that AI will bring to the hospitality industry

Artificial Intelligence (AI) has taken over industries across the globe. It continues to evolve in the customer-centric era and has become a critical aspect of technological advancements, from smartphones to business software. Companies of all sizes have realised the importance of integrating new technological solutions to speed up their development track in order to address current challenges and opportunities. The artificial intelligence in hotel industry is already transforming its processes, services and the way hotels can better connect with their guests.

This article explores the following areas:

• Examples of how hoteliers can use AI in hospitality
• Key technological advancements in the hospitality industry
• Main benefits and challenges of implementing AI in hotel industry
• The future of AI in hospitality

How hoteliers can use AI in hospitality

AI or Artificial Intelligence System refers to the computers or machines that perform activities associated with concepts like automation for important business tasks. It plays a significant role in hospitality management due to its ability to perform common tasks 24/7, potentially saving money, eliminating errors, improving employee job satisfaction, and delivering excellent customer service.

Even though adopting Artificial Intelligence in the hospitality industry is still in an early phase, it will bring countless and revolutionary changes in the sector. Discussed below are some examples of how AI can transform and benefit the hospitality industry.

Occupancy patterns and forecast

Seasons and holidays play a significant role in understanding the occupancy level in the hospitality industry. Hotel owners and managers tend to focus on demand forecasting to give their business a boost in profits. Artificial Intelligence can process multiple sources of information and identify any upcoming events in the area that might influence the occupancy rate or affect prices.

Access to such insights can enable hoteliers to make their pricing more competitive, develop specialized promotional campaigns, and become more confident in making other strategic decisions. With AI, the hospitality industry can analyze potential customer flow and occupancy patterns, correlate the information with business data insights, and get a clear understanding of which strategies are the most likely to drive more visits, sales, and profits.

For example, hotel managers may want to check the number of guests from the local community versus other regions or countries. AI will help them to collect and analyze key hotel intelligence and information about the guests, from their travel patterns to specific personal demographic traits, allowing the provision of a tailored and memorable guest experience by meeting their distinct preferences. Eventually, hotel brands will gain more customer loyalty, making them stand out from the competitors.

Hyperdynamic pricing

Time-based pricing or hyperdynamic pricing is a strategy the hospitality industry uses to improve revenue and attain maximum occupancy based on supply and demand. AI solutions ensure that hoteliers are on the right path while also improving your efficiency and accuracy.

Switching to hyperdynamic pricing by implementing AI in hotels will enable the booking engines to automatically inspect past user data, potential information on social media, and global news to gain multiple data intelligence sources on the patterns to display the rates that will increase the rate of your earning potential.

Due to AI’s ability to effortlessly and efficiently perform most tasks performed by human staff, the hospitality industry can use this technological advance to optimize its operations and boost customer retention rate. The functions include:

• Optimizing room rates
• Adjusting dynamic pricing based on occupancy levels
• Updating rates across multiple platforms in real-time
• Comparing the performance and rating to other hotels in the local community

This can be updated to align with current market trends and algorithms, making it appealing to a potential target group of customers. For example, the software solution fuelled by Artificial Intelligence will make it possible to monitor any recent seasonal changes and various market circumstances and will instantly adjust prices to reflect the fluctuations in demand. 

With AI integrated with operational systems, hotel managers gain the astounding ability to mirror the market trends and track down any local events and conferences to predict and react accordingly. In short, AI can not only maximize your profit by automating these tasks but also effectively reduce the need for human effort as well as minimize errors.

Conversational Marketing

The hospitality industry is increasingly incorporating conversational Artificial Intelligence and automation technologies. These developments have reached new heights in recent years and are still gaining popularity aiming to build a better guest experience. AI-powered conversational chatbots are virtual assistants that offer solutions and interaction to users’ queries.

Hospitality chatbots integrated with AI help hotel owners fulfill the expectations of today’s digitally-dependent travelers and can streamline their experience with instant and customized assistance. This powerful solution can be employed to:

• Optimize and increase the direct booking process
• Be always available to answer customer queries
• Personalize and prompt check-ins/outs and upgrades

Conversational marketing through AI-powered chatbots helps hotels identify unique selling and upselling opportunities with more personalized customer engagement. For example, if a guest wants to get information about the hotel services like opening hours of a swimming pool or restaurants, the AI chatbots will instantly reply to them, instead of making them wait at the front desk. To illustrate this mutual benefit, a prominent hotels and resorts group reached 100% of chat automation using HiJiffy’s AI solutions, while reaching customer satisfaction score at 73%. Looking at the company’s global insights from 2021, their Booking Assistant engaged in 2,922,942 conversations leading to 80,955 bookings generating €43.37M for the hotels using HiJiffy’s technology. All while retaining an average customer satisfaction rating above 80%.

Besides answering questions, AI takes a step ahead and makes specific recommendations to the guests before or during the booking process. Such unique and well-timed opportunities can increase direct sales by automating many functions, including hotel bookings, handling FAQs, query support, payment process, and more. In the dynamic industry, it will help you gain a competitive edge, especially regarding customer experience, advanced technology, and customer loyalty.

Key technological advancements in the hospitality industry

Virtual concierges (Chatbots)

Virtual concierges are the new best friend of travellers and hoteliers, connecting them in a way that has a positive impact on both the business and the customer experience. This AI-powered technology provides comfort to the guests, which in turn generates more revenue for the hotels. A study suggests that in 2022 about 85% of customers prefer to ask their queries through real-time chatbots, where they will be addressed immediately, rather than waiting for a customer support team.

Even though the existing hospitality chatbots can fulfill some aspects of digital concierge service, AI-powered solutions can reduce the efforts of staff, simultaneously offering a more personalized service for guests. Integrating this technology with most popular communication channels relieves hotel staff from most common tasks and, in turn, allows them to focus on more complex requests and ultimately elevating the guest experience. The hospitality industry can strategically harness the power of virtual concierges to do the following:

• Build a seamless guest experience that drives sales and loyalty
• Handle time-consuming tasks and improve employee satisfaction
• Respond to every question faster with accurate service
• Communicate in 100+ languages thanks to automated translations
• Open up communications channels, from social media to instant messaging (WhatsApp, Facebook, Instagram, WeChat, Google My Business, SMS), to create additional revenue streams
• Highlight local attractions and businesses

For example, if guests visit a hotel’s website to address their concerns, these virtual chatbots will attend to their inquiries and respond promptly to their questions. With the satisfactory resolution of their queries, customers will be motivated to take advantage of the hotel’s upselling offers. AI-driven virtual concierges make it easier and more efficient, providing guests with a high-end user experience. It means the customers can easily access desired information and services whenever they want.

Guest Data Analysis

Data analytics in the hospitality industry assists in handling demand analysis, customer behavior patterns, and customer base. Besides enhancing the customer experience through chatbots and concierge robots, employing Artificial Intelligence in the Hospitality industry will help in guest data analytics.

Aiming to serve their guests better, hotel managers need to know about them and their needs, making it vital for the hotels to gather information about customers. Thanks to the development of Artificial Intelligence technology, smart new tools can process and interpret this information automatically.

AI positively impacts hotels by quickly collecting, analyzing, and sorting large amounts of data across a variety of online sources and generating valuable insights about existing and potential customers. This powerful approach to hotel data analytics can be implemented across many areas, enabling the design and delivery of timely recommendations based on a guest’s stated preferences and interests, improving both customer experience and business growth.

Over the past few years, the hospitality industry has been deploying Artificial Intelligence to predict the analytics and anticipate the needs and preferences of the customers. The hotel’s AI-integrated data repository and predictive modeling offer consumer intelligence and data science solutions to acquire, understand and retain valuable customers.

Hospitality data analytics by Artificial Intelligence ensures the delivery of measurable impact insights in business and helps you to make optimal choices based on patterns and trends in the market. Moreover, it increases the ability to build up guest satisfaction and encourages the hotelier to embrace this promising feature.

Voice-activated services

In the era of Alexa and Siri, voice-activated services need to have no introduction. Customers have their own habits and day-to-day activities. To make their stay as comfortable as possible, hotels are following the trend of voice automation, making the room amenities adapt to their preferences.

Thanks to developments in technology, hotels can use conversational AI in the form of a voicebot processing incoming voice messages from popular social media and messaging apps, like WhatsApp and Facebook Messenger. Such advanced Interactive Voice Response (IVR) systems for hospitality can also answer guest queries through the same medium – natural-sounding voice notes.

Voice-activated service solely relies on Artificial Intelligence to recognise speech and respond accordingly. This personalised application is helping hoteliers to offer exemplary and luxurious guest experiences. Being one of the smart features, it enables the guests to do the following tasks at once:

• Request room service
• Make a reservation for a table in the hotel restaurant
• Get a ticket/pass for the gym and pool
• Order specific items (fresh towels, accessories)
• Book excursions
• Get access to tourist information and weather forecasts

AI-powered voice-activated service enables the customer to dim the lights, put on music, and help with a variety of concierge tasks, such as setting wake-up calls. For example, if the guest wants to adjust the room’s temperature as per their choice, they just want to say ‘Turn up the temperature’ to the voice-controlled smart hubs in a hotel.

Voice technology can also be used for entertainment purposes, and devices can be programmed with their names in advance to amplify their personalised experience. Additionally, in-room voice-activated services allow the customers to interact in their native language, thus removing language barriers.

Robots

The use of Artificial Intelligence within robotics is one of the most promising applications for businesses operating in hospitality management. The industry is promptly adapting to the concept of robotic automation in their services which will become inevitable in the near future. Service robots equipped with AI can carry out both simple and complex actions automatically, with greater accuracy and consistency. 

The hotel segment has played a major part in the hospitality robots market. Based on a report, it was valued at $295.3 million in 2020, and it is estimated to reach $3,081 million by the year 2030. It is also essential to understand that the core goal of robots is to improve and promote the overall guest experience.

It can be done by enabling them to perform various activities, including greeting and welcoming guests in the front office, guiding them to their rooms, and offering snacks and orders to customers’ rooms without affecting availability. They are also specifically engineered to clean and disinfect the facilities, which have become of utmost importance due to the COVID outbreak.

It has also been observed that the current robot technologies have been developing a higher level of intelligence and a capability to process holistic thinking to drive customer engagement more intuitively and naturally. Keeping up with this latest trend of Artificial Intelligence will help the hotel professionals better understand what their customers anticipate and give them an innovative and outstanding experience.

Predict utility usage

Since working all year round, hotels should focus on improving revenue management and saving energy, water, and waste-monitoring tools and expect to benefit from savings and sustainability rewards in the long term. A study shows that, on average, hotels in the US spend 6% of all operating costs for utility bills. 

However, the positive aspect is these energy expenses can be controlled by implementing AI-powered energy management that goes beyond installing energy-saving lighting systems. Software developed by integrating Artificial Intelligence for energy consumption control promotes predictive maintenance. This kind of energy management solution will expand the lifespan of equipment and cut down unnecessary maintenance costs.  

AI follows a modern and smart management approach supported by IoT devices to obtain real-time data on every energy usage and predicts the usage, monitoring temperature, air pressure, and humidity inside the building. The software will adjust the HVAC (Heating, ventilation, and air conditioner) with acquired energy patterns.

Thanks to this solution, hoteliers can better understand the resources to attain energy efficiency goals. By using AI technology, they can create a more intelligent hotel for the customers and a sustainable space to save the environment at the same time. 

Make reviews actionable

Acquiring a new customer costs five times more than retaining the existing customers. Taking it into consideration, hoteliers tend to embrace the AI-enabled response system for customers due to its ability to boost guest satisfaction.

The primary objective of this AI feature is to analyze the qualitative feedback data from the customers and provide extracted information and insights from a large number of texts.

Moreover, the hotel industry can automate hotel review management using AI to collect, store and analyze reviews and feedback from multiple online sources instead of going through the process with manual efforts. From booking to dining, it will help hoteliers offer a more personalised guest experience without losing their focus on other tasks or adding pressure on other employees. 

Using sentiment analysis, AI will help to highlight the positive and negative words, making it easier to get in touch with customers in a more appropriate manner. Considering the growing advancements, the use of Artificial Intelligence in collecting the reviews allows it to respond to the request of guests in the right tone of voice, with the right information, at the right time, when they need answers.

Artificial Intelligence can promote their business and customer experience in various ways. For example, an AI-powered review system will allow hotel staff to solve customers’ issues and provide effective solutions promptly and simply. 

Feature smart event diagramming

Artificial Intelligence in the hospitality and meeting realm has different forms where professionals can utilize the technology as a matchmaking tool. AI acts at the forefront of event management, especially in facial recognition and biometric registration.

Today, there are various forms of AI-powered chatbots designed for large virtual events, preventing many people from congregating in a single place. To drive sales volume, hoteliers use intuitive tools like smart event diagramming and 3D retention of event spaces created, all to be shared across the hotel team, event planner and client.

These 3D event spaces provide the option of template layouts from previous events, create and host virtual walkthroughs, build menus based on themes, craft breakout plans, and collaborate with various teams, all through hybrid means across the globe, in one place. It is also a great way to offer extra protection for both attendees and event staff.

The fundamental aspect of delivering exceptional customer service in the hotel industry can be achieved only when we adopt the fusion of AI, Machine Learning, and IoT. Finding the right technology allows for smart event diagramming, becoming imperative to cost efficiencies, increasing brand recognition, and foreseeing tangible revenue growth.

Contactless Procedures

Ever since the pandemic outbreak, the importance of contactless technology has emerged in the hospitality industry. A recent survey has indicated that 70% of millennial travelers prefer a contactless hotel experience. Here’s an overview of AI-integrated hospitality solutions:

• Virtual Concierge service
• Automated check-in/check-out
• Voice-activated room service
• Automated assistance for booking spa
• Contactless digital payments
• Robotic service

AI-powered contactless technology in the hotel industry is specifically designed for customers who prefer a seamless service without much friction. By applying automation features in every aspect, hotels can gain endless opportunities and provide guests with a personalized experience, ensuring that their needs are met on time. 

Moreover, customers are also starting to enjoy the automated keyless check-in or express check-out process due to the convenience. It will also aid the hotel management by reducing the cost of staff, documentation, on-site offers, and time. Moving forward with AI, the industry will face emerging technologies, including facial recognition, cashless payments, and Internet of Things, and many others gearing up to employ many innovations.

The call for contactless technology in the hospitality field has become a necessity today rather than an option, and hotels are rushing to achieve it with Artificial Intelligence. These innovations will be one of the pioneering solutions in the next hospitality generation of the on-demand industry that enables an automated guest experience for the customers and simultaneously generates increased revenue for the hotels.

Make hiring smarter

Apart from the advantages covered so far, AI enables the hospitality industry to recruit hotel employees beyond the outdated resume model. According to McKinsey’s Global Institute Model, it is reported that around 70% of companies will adapt to AI by 2030. Certain AI hiring tools coupled with HR will help organizations to get the best individuals using personality profiles, psychometric assessments, and gamification-based tests.

Integrating Artificial Intelligence with the recruitment process will automatically screen all the applications, despite the huge number, and make sure to shortlist the best among them, based on the given algorithms, including:

• Screening CVs and efficiently sorting the candidates
• Improving the candidate experience and provide real-time feedback
• Eliminating implicit biases, shifting focus to the skills and experience, and supporting a diverse workplace.

For example, AI will help to assess the applicants’ psychological traits, cognitive skills, personality, and communications, enabling recruiters to hire the best candidates for particular positions. However, the role of AI doesn’t end here. But it also plays a critical role in training hotel employees. The AI-induced training system is known to be better than the classroom one by proving the improved performance of hotel staff.

The staff can undergo the training process and learn every aspect of your firm just with a mobile or web app, saving both the recruiter and candidate precious time. They can also be tested through assessments or tests to know how and what they have learned. Overall, integrating AI with recruitment software will help to overcome the challenges and expenses of hiring the right talent.

Main benefits and challenges of implementing artificial intelligence in hotel industry

The adoption of technological advancements, particularly artificial intelligence, has been reshaping the landscape of the hospitality industry in recent years, accellerated because of the pandemic’s impact. The use of AI in hospitality offers a unique blend of improved efficiency and enhanced guest experiences, but it is not without its challenges. Let’s take a look at the most popular arguments for and against adopting AI in hotels.

Benefits of AI in the hospitality industry

• Personalised Guest Experience: AI in hotels allows for the collection and analysis of guest data, enabling personalised services and recommendations. This tailoring enhances guest satisfaction and loyalty.
• Operational Efficiency: Artificial intelligence in the hospitality industry streamlines operations, from managing bookings to automating routine tasks, leading to reduced labour costs and increased efficiency.
• Revenue Management: AI’s predictive analysis helps in dynamic pricing and inventory management, maximising revenue potential.
• Enhanced Guest Services: Chatbots and virtual assistants, prime examples of AI in hospitality industry, provide 24/7 assistance to guests, answering queries and offering solutions promptly.
• Data-Driven Insights: AI tools analyse vast amounts of data, offering valuable insights for better decision-making and setting strategies.

Challenges of ddopting AI in the hospitality industry

• High Initial Investment: Implementing AI solutions, like any advanced technology, requires significant financial investment, which can be a barrier for smaller establishments. However, some conversational AI solutions have a lower cost and quickly show a return on investment (ROI). In this regard, you can use HiJiffy’s Hotel Benchmarking Tool to measure your hotel’s performance compared to industry standards and peers.
• Integration with Existing Systems: Ensuring AI systems work seamlessly with existing hotel management software can be a complex and time-consuming process, so look for solutions that already have a big base of integrations with the most popular industry platforms.
• Training Staff: Employees need training to effectively use and manage artificial intelligence systems, which involves time and resources.
• Privacy Concerns: Collecting and storing guest data for AI applications raises concerns about privacy and data security.
• Over-Reliance on Technology: Excessive dependence on AI could lead to a loss of personal touch in guest interactions, a key element in the hospitality industry.

While the use of artificial intelligence in hotel industry offers numerous advantages such as operational efficiency and enhanced guest experiences, it also comes with challenges like high initial costs and privacy concerns. Balancing these pros and cons is crucial for hotels looking to stay competitive and provide exceptional service in the digital age. When choosing the AI-powered solution for your hotel, make sure to address all your concerns in the initial demo call.

Final Thoughts: The Future of AI in Hospitality

As we look ahead, the future of AI in the hospitality industry is not just a promise far ahead; it’s already revolutionising how we approach enhancing the guest experience and optimising operational efficiency. Technological advancements in the hospitality industry, particularly through the use of AI, are setting new standards. From AI-powered chatbots providing instant assistance to guests to predictive analytics optimising room pricing and inventory management, the examples of AI in hospitality are growing exponentially. This progression is not just a fleeting trend; it is the foundation for future success. To stay ahead of the competition, hoteliers must embrace these innovations, especially as research shows that guests are expecting such services. The integration of AI is the leap towards a more dynamic, responsive, and guest-centric hospitality industry.