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How artificial intelligence in hotel systems can remodel the hospitality business

(Image credit: Image Credit: John Williams RUS / Shutterstock)

Over the last couple years, voice and text-based assistants in our pockets have become the part and parcel of our lives and now, we’re at point where we are comfortable with AI controlling our homes. Given the kind of whirlwind of changes that the hospitality industry is going through, the time isn’t far when we see Artificial Intelligence and Machine Learning in hotels used at scale.

Using AI’s inherent capability along with predictive analytics and natural language processing, the entire information management system is getting synchronised and highly optimised to deliver exceptional customer service.

Intelligent hotel system is where all the data channels are linked together just like human arteries and veins, forming a superlative, productive and high-performance structure that resembles the future vision of automated hotel system. IoT-enabled connections of motion sensors, room control, and smart voice control are poised to change the way hotels function. Integration of IoT into intelligence-driven hotel operations will not only personalise hotel guest experience (opens in new tab), but also impact the business model of hotel industry in near future.

Demand-specific Optimisation for Profit Enhancement

Due to seasonal changes and demand-centric nature of the hospitality industry, hotel and travel businesses are likely to adopt need-specific solutions that address rush during holidays and other unpredictable events. Hotels can benefit a lot once they have the ability to capture, understand and predict the future market demand patterns in a smart manner.

Hoteliers can forecast the ups and downs in demands with shifts in seasons and traveller choices and design the action plan that helps optimise their service offerings, pricing standards and even brand marketing. In an industry that is as dynamic as enthusiastic travellers, being able to forecast with Big Data and Machine Learning often results into increase in profit, competitive advantage and number of customers.

The demand-specific predictability and property optimisation achieved through machine intelligence are built on seasonal choices, current trends, local events, hotel history and various cultural attributes. Using a reliable and robust forecast system, hotels can schedule hotel room remodelling, maintenance/renovation work without disturbing the net profit outcome.

Automation and Machine Learning for emerging hotels

Much of the hopeful promises made for Artificial Intelligence in hospitality industry are intended for established brands. Small, less celebrated hotels receive less attention even though they form a big enough segment to reap the best out of AI offerings. Since large hotels can hire more competent staff to work on streamlined tasks, smaller brands with limited budget and members can’t reach the goals of revenue growth and business intelligence management, eventually settling for ineffective solutions and mediocre profit margins.

With the cost of cloud computing and heavy initial investment, it is unfeasible for smaller companies to economically drive maximum revenue even in the on-season duration. However, by leaning on Machine Learning and Artificial Intelligence (opens in new tab), emerging names in the hospitality industry can automate many of their existing operations. Since automation relives staff from repeat chores, it is likely that these hotels can benefit significantly when it comes to optimising their working capital and operational costs in general.

Furthermore, as hotel staff frees up more space to focus on improving service quality and furnishing the full range of hotel facilities for guests, it slowly results in increased operational efficiency and potential growth in annual revenue.

The Dominant Ubiquity of Digital Virtual Assistants

The rise of digital concierge and virtual assistants can be attributed to evolving travellers, vacationers and business guests who desire exemplary customer experience. Hence, to enable digital experiences with hotels, companies rely on Natural Language Processing (opens in new tab) of famous AI leaders such as Apple’s Siri, Amazon’s Alexa and Microsoft’s Cortana.  To augment the experience furthermore, we will see AR purge the linguistic barriers by enabling English speaking employees to converse effortlessly with hotel guests from any part of the world using AR headsets for real-time translation.

AR is also becoming as integral as AI. UK’s largest hotel chain Premier Inn has outfitted each guest room of their Hub Hotel with an interactive wall map that contains local spots of the surrounding neighbourhood. To view interesting local sites, the facility allows travellers to point their smartphones at the map.

When it comes to serving customers with AI-powered virtual assistants, Edwardian Hotels London (opens in new tab) leads the chart. The hotel in May 2015 introduced the first ever AI-based chatbots with which guests can interact via text using smartphone to order room service and request various recommendations for spa, restaurant, hotel specials and other local attractions.

Personalisation on a Larger Scale

AI is predicted to transform hotel room services by 2025, creating personalised experiences that will incorporate individual preferences. Hotels will integrate chatbots and AI (opens in new tab) as an effective tool to acquire and retain various demographics.

McKinsey claims in their research that companies effectively personalising their services can increase revenue by 10 per cent to 15 per cent and diminish service cost by 15 per cent to 20 per cent.

Over time, with wide adoption of AI in hotels, we will see guests will enjoy hyper-personalisation in the form of real-time notifications through chatbots from dinner specials, casino facilities to even babysitting services for family.

Easy maintenance of IoT devices

Guest room technology opens up avenues for consolidation of total devices in use through IoT implementation, which reduces cost of maintenance and purchase for hotel businesses. With AI and IoT, hotels can whittle down the chief devices such as:

  • Wi-Fi access point (in-room)
  • SIP telephone
  • Hotel alarm clock with Bluetooth audio streaming
  • Special tablets for guests

The total capital to go into installing the whole technology set would amount to nearly $800 to $900. However, if hotel brands choose to bundle them together into a single guest room device, the cost will be cut down to not more than $500.

By leveraging all-in-one solution that involves purpose-built assistant devices and flexible controls, hoteliers can affordably run their operations while looking after their customers. Angie Hospitality (opens in new tab) is one good example of such affordable and scalable guest room assistant technology.

Centralised Data Management

A centralised data management system will redefine and streamline all the relevant data. Isolated solutions without proper synchronicity of information will obstruct both hotel operations and customer experience. CDM is necessary to evolve the methods of guest information and profile management, which further helps meet the customer expectations of receiving tailor-made services during and before the stay. The more you know your customer - the nimbler you can be in delivering customised offers and a satisfying guest experience.

Also, Data analysis is key to keeping the customers engaged and interested in enjoying hotel services. With AI and analytics, managers can bring about a poised CDM structure that can not only segment the guest profiles, but can also understand their preferences, habits and future choices, creating opportunities to earn more loyalty.

Apart from this, CDM enables hoteliers to understand customer behaviour pattern from various touch points. As Machine Learning generates a 360-degree view of each guest, it is possible to carve out their real persona. The insight thus generated can help personalise the push messages, connect with guests in real time and create a peerless brand – which can be simplified as repeat business, brand loyalty and word-of-mouth promotion.

Customer Acquisition, Retention and Loyalty

Call it a biggest revolution or a challenge for opportunist hotel brands – the inspiration behind mass personalisation of travellers’ choices springs from the archaic system for search and booking which disappoints modern day travellers since it is rife with confusing array of undesirable, ordinary options.

New range of apps now leverages AI interface engines to discriminate different travellers’ profiles to design services that best match their expectations.

AI’s intelligent algorithm can process, learn and untangle historical records of customer preferences and buying patterns to create actionable insights and suggest impactful improvements. With AI playing a major role, hotel marketers can eliminate dealing with monotonous emails or ad commercials.

For instance, AI can confirm booking of repeated customer with an email saying, ’Thanks for choosing our services again, David’, instead of plain, ‘thanks for your reservation, David.’ Not only this, based on his previous service inquiries, the message can even include more customised recommendation that suits David’s personal lifestyle such as spa services on discount, free therapeutic massage or poolside assistance.

It is important for any hospitality company to retain maximum customers and their loyalty by providing them with what they would want most as a privileged hotel guest. By knowing guest expectations, their interests, the reasons for choosing their hotel and whether they are willing to market your brand to other prospects is key to attaining maximum guest loyalty.

To resolve this, Cendyn has automated the process of building arrivals reports in 40 variables based on which hoteliers can request contact information, recommend additional services and appreciate their choices. With the help of Artificial Intelligence, analysts can watch the data such as frequency of arrivals, duration of stay, daily spending, revenue, services used, special privileges and other details. Being proactive about customising and testing offers for each individual can result in better insight which helps in delivering more personalised experience and brand loyalty.

Challenges down the road of AI adoption

Due to radical nature of certain hoteliers, big hotels are struggling with their legacy systems that are less interactive and ineffectively (or partially) interconnected. This is the reason why, despite the advancements in technology, hotel companies are lagging behind. Some of the challenges down the path are:

  • Poor or incomplete understanding of AI and its actual capabilities
  • Lack of enthusiasm to expand the horizons of novel business opportunities
  • Insufficient adaptation to innovations and experimental approach
  • Limited awareness on how to leverage technology to improve relationship with customers

What should be the Next Action Plan?

Hotels that are still battling with their existing service standard and business challenges should:

  • Take an unflinching look into their current operational systems to discover their strengths, weak points and area of improvement
  • Create a vision for the future hotel system including its automation capabilities, process efficiency
  • Scrutinise their existing hotel staff and allow them to focus more on guest service by integrating automated operations for repetitive tasks
  • Emphasise on setting up hotel-specific technologies to build smart rooms

Intelligent hotels are no longer a distant future

While it is logical to think that complete replacement of human personnel with AI and chatbots may not sound appropriate or acceptable to hotel guests, it is undeniable that today’s hoteliers need to adapt to technological advancements to run hospitality business with increased profit and revenue. 

Guests on the other hand are growing more tech-savvy, expecting digital interactions for quick assistance and customised services in minimal time lapse. With demands for having AI-based interconnected system in hotels getting stronger, the implementation of AI-powered automation does not seem like a far-fetching concept.

Marriott hotel chain (opens in new tab) has already stepped in to produce futuristic version of their hotels in USA, working with Samsung and Legrand in order to create guest rooms with intuitive, voice-activated controls,

Another example is Accor in Paris (opens in new tab) which is shaping smart rooms with personalised services. The common facilities some of these intelligent hotels offer are:

  • Voice-activated Virtual assistants
  • Room amenities controls (lighting, TV, temperature, music)
  • Personalised activity suggestions
  • AI-enabled housekeeping services
  • IoT interconnected devices

In conclusion, customers today expect a business (esp. travel related) to know everything about them and are always on the lookout for better service or experiences. Hotels should collaborate with the right technology partner (opens in new tab) in order to identify gaps in their processes such as customer support, concierge bookings to in-room technology that can be closed with the help of integrating Artificial Intelligence and Machine Learning.  It is the key to enhancing the customer experience, increasing brand recognition and loyalty along with tangible revenue gains.

Mitul Makadia, Founder, Maruti Techlabs (opens in new tab)
Image Credit: John Williams RUS / Shutterstock

Mitul Makadia is Founder of Maruti Techlabs and a true technophile. With his industry experience, he has rapidly developed Maruti Techlabs in specialised services like Chatbot Development, Artificial Intelligence, Natural Language Processing and Machine Learning. Makadia has considerable expertise in Chatbot Development and NLP.