The transformative power of AI in the hospitality industry, ET TravelWorld News, ET TravelWorld


These last years, the hospitality industry has historically faced challenges in recruiting and retaining employees, particularly in certain positions like housekeeping, food service, and front desk staff. One part of the solution can come from the usage of new technologies. Robots and more generally AI can potentially increase firms’ service productivity and have a major impact on employment. In addition, AI will increasingly help the employees of a firm by assisting them in their daily tasks.

In recent years, the hospitality industry has witnessed a remarkable transformation driven by the rapid adoption of AI. From hotels to restaurants and travel services, AI is changing the way businesses in the sector operate and, more importantly, how they provide top-notch experiences to their customers. In this article, we explore the various ways in which AI is revolutionising the hospitality industry.

Enhanced Guest Experience
Concierge robots: social and/or utilitarian robots can interact with customers in order to support their needs.
They will revolutionise the hospitality industry by offering a unique and futuristic guest experience. These robots are equipped with AI algorithms and sensors, enabling them to perform a range of tasks, from delivering amenities to providing information about the hotel facilities. Concierge robots will excel in performing routine tasks, allowing human staff to focus on more complex guest interactions. Unlike human staff, these robots can operate 24/7, ensuring that guests receive assistance at any time. In parallel, robots can be programmed to follow safety protocols, providing a touchless and secure environment for guests.

Putting Big data to use for enhanced digitised travel experience

Today, Big data is being leveraged by the tourism industry in every possible way. According to an analysis conducted by Global Data, the AI market which was valued at USD 81.3 billion in 2022, is expected to grow at the rate of 35% by 2030. These tools are being incorporated into devices, business applications and productivity tools for seamless business operations.

Personalisation: AI algorithms analyse guest data to offer tailored recommendations and experiences, from room preferences to dining options. Personalised experiences lead to higher levels of customer satisfaction as guests feel valued and understood. Guests are more likely to return to a hotel that remembers their preferences and offers tailored services. AI algorithms analyse guest data to identify patterns and preferences, enabling hotels to anticipate needs and enhance future experiences.Chatbots and Virtual Assistants: AI-powered chatbots provide 24/7 support, answer queries, and assist with reservations, making the guest experience smoother and more efficient. Chatbots offer quick responses to guest inquiries, improving overall service efficiency. Virtual assistants can communicate in multiple languages, catering to the diverse needs of guests from around the world.

Voice Recognition: Voice-activated devices in hotel rooms allow guests to control room settings, request services, and access information effortlessly. Voice recognition reduces the need for physical touchpoints, contributing to a safer and more hygienic environment. Voice-enabled systems cater to guests with diverse needs, including those with mobility challenges.

Efficient Operations
Optimised Staffing: AI-driven workforce management systems help hotels and restaurants optimize staff schedules and workloads, improving efficiency and reducing labor costs. AI algorithms analyse historical data, seasonality, and events to predict future demand, helping hotels staff appropriately. Real-time adjustments can be done for staff scheduling based on demand fluctuations ensure optimal staffing levels during peak and off-peak periods. Efficient staffing leads to cost savings by avoiding overstaffing during low-demand periods.

Predictive Maintenance: AI can predict when equipment or infrastructure needs maintenance, preventing costly breakdowns and disruptions. By addressing maintenance needs proactively, hotels can avoid costly repairs and extend the lifespan of equipment.

Hospitality industry expects hiring to accelerate after robust growth in 2023

“The hotel industry’s direct contribution to India’s GDP reaching USD 1 trillion by 2047 is a significant milestone. This substantial growth will undoubtedly bolster job creation within the sector, providing employment to millions of individuals across diverse skill sets,” HAI Vice President K B Kachru said. “We have witnessed a paradigm shift in how we operate, with more emphasis being put on adaptability, digital innovation, and a heightened focus on guest safety and well-being,” he added.

Energy Efficiency: AI can optimise energy consumption by adjusting lighting, heating, and cooling based on occupancy and external conditions. AI algorithms analyse energy consumption patterns and make real-time adjustments, leading to significant cost savings.

Reducing Food Waste: AI helps restaurants manage food inventory efficiently, reducing waste and supporting sustainability efforts.

Revenue Growth
Cross-Selling and Up-Selling: AI analyses customer behaviour to suggest relevant services and upgrades, increasing sales. By suggesting relevant add-ons or upgrades, hotels can boost average transaction values, directly contributing to revenue growth. AI algorithms can analyse demand patterns and optimise inventory, ensuring that suggested upgrades are available. In parallel, personalised recommendations tailored to individual preferences improve the overall guest experience, fostering loyalty.

Targeted Marketing: AI-driven marketing campaigns can precisely target potential customers based on their preferences and demographics. Targeted marketing ensures that promotions and messages resonate with the specific interests and needs of different guest segments, leading to higher conversion rates. AI helps optimise marketing spend by directing resources toward channels and campaigns that are more likely to generate revenue. Personalised marketing builds stronger connections with guests, increasing the likelihood of repeat visits and brand loyalty.

Mappls KOGO partners with Zoomcar for amping up its AI-powered travel adventures

Mappls KOGO’s AI-enabled features, such as its unique Trip Maker and Kogonaut, provide travellers with distinctive recommendations, while Zoomcar’s seamless booking system and premium car range cater to their specific travel needs. The partnership creates a comprehensive travel ecosystem, in sync with the trends of responsible travel and shared mobility, providing travellers with an all-encompassing experience.

The usage of robots
The service robot technology and telepresence solutions market are anticipated to experience significant growth in the next decade. This trend is likely to have a profound impact on the service productivity of businesses. Service robots hold the potential to enhance the service productivity of firms and could substantially influence employment dynamics.

As AI technologies continue to advance, robots will become increasingly adept at interacting with clients and assisting employees in their guest interactions. A robot can generate ~70%-80% of correct answer, and for the rest, the client can click on the screen of the robot and he/she will be in contact with the human concierge of the hotel.

An interesting observation we made is that during conversations with the robot, users often completely forgot that a human concierge was remotely controlling the robot. Notably, when we compared two groups of people (one group informed of the human control aspect and another group unaware of this), we found that there was no significant difference in their perception. This suggests that the robot’s non-human voice creates a high level of immersion.

Our findings highlight the paramount importance of social presence in the utilization of robots. Social presence exhibited a direct positive influence on factors such as usefulness, trust and emotional appeal, thereby indirectly affecting intention to use through these paths.

Challenges and ethical considerations
The challenge lies in ensuring that organisations integrate AI in an ethical and equitable manner. Six key ethical dimensions that must be taken into consideration:

Replacement: When a robot or AI system takes over certain tasks previously performed by human employees, how does the company commit to adapting its workforce?

Data Privacy: What data is collected through digital touchpoints, and how is it gathered, stored, and utilised while respecting individuals’ privacy and data protection rights?

Responsibility: In situations where a machine responds to real-time customer requests, who bears responsibility in case of system failure or errors?

Trust and Security: How can AI systems assure the safety and security of users who interact with them, considering the algorithms they employ?

Social Interaction and Humanisation: How can organisations establish a healthy social connection between humans and machines or robots, recognising the need for human-like interaction in some scenarios?

Autonomy: To what extent should machines be granted decision-making capabilities without direct human oversight and control, striking a balance between automation and human intervention?

The integration of AI is set to become an integral part of everyday business operations. Nevertheless, the industry must prepare its workforce to align with these evolving practices. Within this context, emotional intelligence, encompassing the ability to understand and manage both one’s own emotions and those of others, continues to be the paramount skill set for hospitality employees.

Despite the influx of new technologies into the industry, employees can exhibit a level of empathy and kindness that surpasses any machine developed thus far. Their proficiency in soft skills enables them to adeptly navigate various situations without necessitating extensive training.

However, it’s crucial for employees with a high level of emotional intelligence to also possess a strong tech-savviness, enabling them to effectively oversee and manage the AI tools that are progressively being integrated into the industry.

As hotels, restaurants, and travel services continue to adopt AI solutions, they are unlocking new levels of efficiency, guest satisfaction, and revenue growth. However, it’s crucial for industry players to navigate the challenges and ethical considerations that come with this transformation to ensure a seamless and secure guest experience.

The author is Full Professor at EHL Hospitality Business School

DISCLAIMER: The views expressed are solely of the author and does not necessarily subscribe to it. shall not be responsible for any damage caused to any person/organisation directly or indirectly.

  • Published On Dec 14, 2023 at 12:26 PM IST

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