From chatbot to top slot – effective use of AI in hospitality

The hotel sector’s current approach to artificial intelligence is very much driven by potential savings and the opportunity to replace team members. This means a focus on chatbots, with technology standing in for people and performing basic tasks, leaning on the artificial aspect of AI, rather than the intelligence.

I have great faith in the hospitality’s creativity and high hopes that we will see more imaginative uses of AI, but so far the response is similar to what we see for every new piece of technology: That it be viewed in terms of how it can be used to reduce costs.

This is true across all industries and completely understandable. We saw this with the rise of the internet, where the dream was of low-cost distribution. Instead, it made demand more predictable and massively expanded supply, and I believe that AI will also change travel and hotels in ways that we can’t yet fully appreciate, but where we are starting to see clues.

In the short term, the sector’s dreams of cost cutting and increasing efficiency are coming true, which helps it to look more favorably on AI. In the long term, the opportunities AI gives us are likely to increase the complexity of operations and drive a shift to distributed management.

For example, you might use your chatbot to encourage people to order burgers from their poolside loungers, but as you get deeper into personalization, the temptation will be to offer every type of burger with every variant of topping to cater to every possible taste, because the instinct of hoteliers is to be as hospitable as possible. The guest is happy, but you have added a level of complication for the kitchen, for your supply chain, multiplying the number of problems that you had before.

Online shopping is a great example of this. Before the internet, when you needed new sneakers, you would have stirred yourself from the couch, driven to the shops, gone from shop to shop trying on shoes, maybe having a snack, before driving back home with your purchase several hours later. With e-commerce you could stay on the sofa, go online, choose your shoes and have them delivered. The productivity gain was immense because that afternoon became half an hour.

But because we are driven to continuously improve and innovate, that isn't the end of it. The sneaker manufacturer thinks: “Why are we only offering a set number of styles? Why don't we let you personalize your shoe?” So now, instead of half an hour choosing one shoe, you’re spending five and a half hours personalizing your own shoe. It's a completely different problem.

We are eager to use technology to improve productivity, but as with our burger, rather than completely overturn the process, we are shifting productivity somewhere else. Distributed management provides the solution to this, allowing team members to work collaboratively, but autonomously, over a network.

With AI, we are in the first phase of gains and are only beginning the cautious first steps towards that paradigm shift that will propel us into the next phase of the sector.

The current direction of travel suggests that AI will make hotels a more pleasant and personalized place to be. This is the established offering of the luxury segment, where teams are paid to anticipate what you need, to effectively think for you. When it’s done well it can feel magical and, with AI, we can replicate that across the segments.

This will mean that there shouldn’t be a massive difference between your experience in a five-star hotel and a two-star hotel. There will be a reliable consistency that will allow you to get the most out of your stay, whatever your reason for being there.

Hotels have a tradition of being early adopters of technology. Guglielmo Marconi, who lay the foundations for wireless telegraphy, lived at the Savoy and in 1905 created a system allowing the hotel to take reservations from cruise guests before they reached land. Where hotels have reservations of another kind is the fear that technology will take away from service and remove the human touch.

We are seeing a system evolve that will see technology manage the building wave of personalization, but ensure that it is fulfilled by a person, meeting guests’ desire for a human connection.

It’s exciting to consider how AI could fundamentally change hotels, enabling them to combine great service and wonderful experiences with being more attractive to investors. Bringing together dependable but inspiring service with optimized operations will help change hotels from a sector on the periphery to a profitable - and inspiring - industry.