The tumultuous changes taking place in the hospitality industry in the context of AI intervention calls for recognition of the new realities for managing the business. It is not an easy task to have AI engaged at every level in the business. Traditionally managed by multitudes of grey-collared personnel, if leaders can get the human-AI partnership work for all, it could be a game-changer.
Digital Wake-Up Call
Several businesses in the hospitality industry were slow to embrace digital and AI technologies. They even failed to read the swiftness with which customers were shifting their preference to digitally-served options. This shift in preferences resulted in the galloping progress in customer acquisition that new upstarts such as Expedia and Airbnb achieved relatively quickly.
Thomas Cook, which had built a successful travel business over 178 years, could no longer meet the expectations of a large section of their customers who started expecting the same advantages others were offering. Things like dynamic pricing, personalised recommendations and ease of online bookings. After struggling to deal with the new competitors, it declared bankruptcy in 2019.
On the other hand, hotel chains like the Holiday Inn, the Marriott and others, faced challenges with the onslaught of born-on-the-web players like Expedia and Amazon offering flexibility with booking and pricing options. Although they have managed to recoup by investing in digital and AI assets, they have let new players enter their territories.
AI-Powered Hotel
The possibilities led by AI in the hospitality business are exciting. For instance, AI would handle all operations – check-in/checkout, housekeeping, entertainment, dining and request for any information. Aided by robotic concierges, it would be possible to anticipate the needs of the guests and seamlessly cater to them. Smart rooms will control all the parameters of the room, namely lighting, temperature, entertainment and AI-generated in-room menus and dining options. To achieve sustainability goals and be sensitive to the environment, AI would support hotels in the optimisation of energy and water consumption, and manage waste.
AR and VR would no longer be deployed as independent stand-alone applications but would become integral to the data feeds. This would enable the hotel in identifying the preferences of customers and proactively ready these experiences, servicing them from their own locations or when they visit the hotels. Events being held at the hotel venues would be elevated to higher levels of immersive experiences with the help of AR and VR tools. AI-led integrated event management systems should be able to manage crowd flows and carry out autonomous identification.
The changes in customer expectations are here to stay, and the players in the hospitality business have come to recognise that their offerings have to be further tailored around these expectations. Revenue optimisation for hotels would be through AI-driven dynamic pricing model, loyalty programmes built across online and in-person experiences and AI-powered digital concierge services. Thus, blending efficiency with personalisation would enable the hospitality businesses to build differentiation and create customer stickiness through enhanced customer delight. AI would then become a very welcome long term resident as it gets trained to add value to every customer and the business.
The writer is chairperson, GTT Foundation
