From AI-powered room service that knows your guest’s favorite midnight snack to chatbots that give travel advice like a seasoned globetrotter, artificial intelligence (AI) in hospitality is like having a unicorn in your hotel garden. You can use it to attract customers, wow them with unique, personalized experiences, and learn more about your business and customers to stay ahead of the game. Whether you're running a hotel, restaurant or travel service, AI is the technological assistant that can set you and your brand apart.
Artificial Intelligence is already making its mark on the hotel industry, particularly in guest experience management. There, it transforms customer interactions and provides instant, around-the-clock assistance to guests. At the same time, it’s freeing hotel staff to spend more of their time on the little details that delight customers and make them smile.
Here, we delve into the data-driven world of AI to discover how it’s reshaping the industry and enabling diverse hospitality businesses to offer throughout the customer journey, ultimately enhancing the guest experience.
People Crave Personal Experiences
Customers’ preferences in hospitality are constantly shifting, and at the moment, personalization is the dish of the day.
One study of over 1,700 hotel guests found that was directly linked to customer satisfaction, with 61% of respondents saying they were willing to pay more for customized experiences. However, only 23% reported experiencing high levels of customization after a recent hotel stay.
Another study found that 78% of travelers are more likely to book accommodations that offer individual experiences, with nearly half of the respondents willing to share the personal data required to customize their stay.
This desire for one of a kind experiences is particularly prevalent among millennials and Gen Z, two demographics that are spending big on travel in 2024. Given these insights, it’s clear that failing to offer a personal touch is a lost opportunity to differentiate your brand and give customers what they want.
Where Guest Experience and AI Meet
There’s a demand for unique hospitality experiences tailored to individual needs, and many travelers are willing to pay a premium for them. Customized recommendations, services, and amenities can all help create a memorable experience and enhance customer satisfaction, and generative AI is one tool you can use to deliver them.
AI can automate insights and actions by analyzing large quantities of data and learning from user interactions. From customized travel recommendations to customizable room settings, AI can deliver a vast and varied range of previously unattainable customization to redefine how companies approach customer service.
The benefits of AI include:
- Increased customer satisfaction
- Stronger emotional connections with brands
- Enhanced loyalty and trust, leading to repeat bookings and referrals
- Informs dynicamic pricing strategies supporting revenue management teams
What Exactly Is Artificial Intelligence (AI)?
In its simplest form, AI is the technology that enables computers to simulate human intelligence. AI consumes guest data to understand the world around it better. It can then use those insights to perform tasks, interact, and solve problems in a way you’d usually only associate with a human mind.
And AI is no longer the technology of the future. It is very much here and now, with many common examples of AI already changing our daily lives. You can see the influence and convenience of AI in smart home devices, digital voice assistants, and vehicle automation systems.
Individualization Techniques in Hotels
The hospitality industry is already using some AI technologies to offer some tailored services, but some are more innovative and are only starting to be explored.
Customized Recommendations
Recommendation engines use AI algorithms to analyze a customer’s past preferences and behaviors and provide relevant recommendations for services and experiences based on that data. Typical examples in the hospitality sector include suggestions for customized travel packages, dining recommendations for guests, and tailored room amenities based on individual preferences.
One such tool, the Guest Experience Platform tool Duve, is already being used by over 1’000 brands in 60 countries.
Around-the-Clock Customer Service
AI-powered virtual assistants and chatbots can handle many customer service requests and are becoming increasingly sophisticated in the queries they can answer and the assistance they can provide.
They offer a 24/7 response system with the capacity to provide tailored recommendations, and reduce the number of calls that go to the front desk staff. That allows employees to spend more time on customer service issues where emotional intelligence from real-life humans adds value.
Enhanced Room Environments
Imagine walking into the perfect temperature hotel room lit just how you like it, your favorite box set has been preloaded, the drink you love is waiting on the table, and the mattress and pillow are just the firmness you like.
That might sound fanciful, but it’s already possible with AI. By integrating artificial intelligence with Internet of Things devices, you can automate the control of thermostats, lighting, and entertainment systems to match your guest’s preferences.
Booking Engines Optimized for Up-sell
The guest’s experience with your brand starts long before they check into your hotel. AI can deliver a better booking service by analyzing customer data, suggesting specific hotels, or recommending add-ons that match their preferences in real time.
This tactic has been used to good effect by the hotel giant Hyatt. It partnered with Amazon Web Services to use their clientelle's data to recommend specific hotels to its customers and then suggested add-ons that would appeal based on their preferences. This project alone boosted Hyatt’s revenues by nearly $40 million in just six months.
Tailored Dining Experiences
AI-powered software combined with machine learning can also create memorable dining experiences for specific tastes and requirements. For example, if a guest has dietary restrictions, AI can help you deliver customized menu options. You can also ensure regular guests get their favorite table and even adapt the lighting and music to meet their individual desires.
Complete Journey Mapping
With AI, you can even plan a guest’s entire stay based on their past behavior and guest preferences. You can provide them with hotel amenity suggestions, room types, airport transfer options, dining experiences, and activities they can enjoy during their stay. That can even include recommendations based on factors such as the time of the day and the weather.
Limitations of AI
Despite its potential and successes in many areas, AI in hospitality still has limitations and difficulties:
- Job Displacement & Workforce Concerns: As AI automates tasks, it raises concerns about job displacement, employee resistance, and economic impact, especially in labor-intensive hospitality roles.
- Limits of AI-Driven Personalization: AI struggles to match human staff in understanding complex emotions and needs, making creating truely unique personal touches a challenge.
- Data Privacy & Security Risks: AI relies on large amounts of user data, raising concerns about storage, security, and potential misuse, which can affect customer trust.
- High Costs & Implementation Challenges: AI integration can be expensive and may require major infrastructure changes, making adoption difficult for smaller businesses.
A delegation of EHL students attended the 2023 HITEC Conference in Dubai as part of EHL's Educational Travel Program. The conference, part of The Hotel Show, brought industry leaders together through panels, talks, and seminars.
The students had the opportunity to participate in keynotes and discussions and assist with administrative responsibilities. The conference focused on leveraging technology for revenue generation and addressed challenges in the hospitality industry, such as artificial intelligence, green technology, and big data.
Reflecting on this experience, students concluded that technology isn’t the answer to everything in the hospitality industry:
We saw how technology is being harnessed to enhance efficiency and the guest experience: analyzing big data allows hoteliers to gather more insight and thus proactively customize their guests’ journey. However, we recognized that hospitality professionals' warmth, empathy, and individualized care remain invaluable and irreplaceable. The human touch makes guests feel appreciated and leaves an indelible impression on them.
Balancing Automation and the Human Interaction
At its heart, the hospitality industry is all about serving people, and AI, when used carefully, can help you do that better. By using AI to personalize the guest’s journey, you can build customer loyalty, enhance satisfaction, and boost revenues.
However, the human touch is still essential. By using AI to complement physical staff members rather than replace it, you can create meaningful connections and deliver customer experiences that matter. Perhaps then, it is time to include AI in your hotel innovation strategy and start putting it into practice.
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