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How Artificial Intelligence (AI) Can Solve Major Deficiencies in Hospitality

Artificial Intelligence (AI) can sift through and dynamically draw insights from mountains of data (operational, performance, guest, pricing, comp set, BI, marketing data, etc.) to allow hoteliers automate or augment operations, processes and decision making via various hospitality tech applications in guest services and operations, revenue management, CRM, guest communications, BI, digital marketing, personalization, inventory distribution, etc.

Obviously, it is up to specialized hotel tech vendors to carry the torch and create various AI-powered applications to solve concrete business needs and help the industry overcome its technology deficiencies. In the same time, hoteliers need to monitor, proactively familiarize themselves with and invest in the AI and other next gen technologies that are quickly making their way into hospitality.

The question is, what are the top five AI-powered applications that are must-have today and can solve the most immediate issues and deficiencies in hospitality?

AI in Hospitality is not some futuristic, Spielberg-esque technology or a nice PR opportunity to make your hotel company look cool, but a real-life, much needed technology that can help your hotel a) solve concrete issues plaguing the hospitality industry such as labor shortages and out-of-control labor costs, b) improve efficiencies and productivity, c) automate pricing and business decision making, and d) respond to the exceedingly high expectations of your exceedingly tech-savvy guests.

Some of the temporary measures to tackle the current pressing issues employed by hoteliers include changes in the business model, outsourcing or hiring more gig workers to do the job and streamlining operations. But the only long-term solution is investing in technology that can solve the current labor shortages through AI innovations, automation, mobility, robotization and other next gen technology applications. The goal here is to do more with fewer employees by using technology and reduce the property staffing needs over the next few years by at least half compared to 2019 levels.

Here are the five AI applications that are must-have today:

  • Chatbots: An AI-powered chatbot on the hotel website like Asksuite or allows the property to cut significantly call volume and engage users in the Planning Phase of their Digital Customer Journey, answer all of their questions and steer them toward making a direct booking. Chatbots provide users with information through text, images, video, audio, etc. and serve as your property’s 24/7 virtual customer service department. Edward, the chatbot of Edwardian hotels in London responds in real-time and round-the-clock to inform on hotel services and amenities, make recommendations, handle customer complaints, etc., thus relieving the work load of the front desk.

  • Guest Communications and Issue Resolution Technology: Guests want to communicate with hotel staff on devices and platforms of their choice. Adopting guest messaging and issue resolution applications like Runtriz, Zingle, Guestware, Beekeeper, etc. via guests’ own smartphones or voice assistants in the room like Volara and Intelity not only improve customer satisfaction and staff efficiency, but reduce the need for human customer service.

  • RMS Technology: An AI-powered Revenue Management System (RMS) with real-time market, travel demand and comp set analytics, website and digital marketing analytics, and online reputation/consumer sentiment data feeds to optimize performance can achieve a near-perfect real-time pricing in response to market dynamics, and significantly enhance GOPAR (Gross Profit per available room). Now is the time to convince management and ownership that only a cloud AI-powered revenue management system (RMS) can help the property maximize revenues and successfully compete in the super complex post-crisis marketplace.

  • CRM Technology: A Customer Relationship Management (CRM) is now needed more than ever to engage, acquire and retain guests and build customer loyalty and boost repeat business, which is 10-15 times cheaper than acquiring new guests or acquiring OTA customers. Using CRM technology like Cendyn CRM Suite, SHR Maverick or Revinate you can boost your property’s repeat business and maintain an “automated conversation” with your guests throughout their customer journey: from useful information like weather during the stay, events and happenings at the property and in the destination, customized upsells and upgrades based on the RFM Value or membership status of the guest, etc. The AI-powered CRM technology automates the pre-, during and post-stay conversations with the guest, provides personalized information, offers, upgrades and upsells and answers to important questions guests might have and relieves staff from having to answer phone calls and emails.

  • Attribute Based Shopping (ABS): Having an AI-powered ABS application/ personalization engine like PROS can enable your website, CRM and Guest Communications applications to automatically personalize pricing and product offering to the individual customer level and take into consideration dynamic factors such as customer's preferences, user browsing behavior, influencer status, “intent to purchase” intensity, and of course the more mundane factors like RFM value, loyalty member status, past booking history, feeder market origin and demographics. I believe One-to-One Pricing, powered by AI will be the absolute winner for both travel consumers and hoteliers. Airlines like Lufthansa are already experimenting with personalization engine that delivers highly personalized airfares, add-ones and upsells. ABS is already a departure from the current revenue management “one-to-many” pricing approach, but “one-to-one” pricing will take property pricing to an entirely different level.

Food for thought:

Here are two more AI applications in hospitality that are already being tested and deployed in hospitality and will become commonplace in the near to mid-term future:

  • Customer Data Platform (CDP):

The recent privacy moves implemented with Apple’s iOS 15 update plus the upcoming elimination of the 3rd-party cookies by Google underscores the importance of first-party data, hence the urgent need for any hotel company to utilize an AI-powered Customer Data Platform (CDP). First-party data is the customer data (past customers & guests, website users, opt-in email subscribers, lists of corporate travel managers, meeting planners, wedding and event planners, SMERF group leaders the property has been doing business with or at least in communications with, etc.) that comes from the PMS, CRS, WBE, CRM program, from the property's website, opt-in email sign-ups, even customer lists sitting on laptops of sales and marketing personnel.

The CDP provides “a single source of truth” for your guest data and not only creates 360-degree guest profiles but, more importantly, dynamically augments guest profiles with preferences, social media ambassadorship data, customer engagement data, etc., which allows for highly personalized customer service delivery and guest communications pre-, during and post-stay, and highly effective one-to-one marketing and guest retention strategies. A CDP can significantly increase customer engagements and boost revenues via look-alike audiences/cohorts marketing while sharply reducing marketing spend, agency fees and payroll.

  • Smart Hotel Rooms:

The future definitely belongs to the fully-automated AI-powered “Smart Room”, similar to the ones being developed by Marriott (IoT Guestroom Lab), Hilton (The Connected Room) and other major brands: a hotel room that knows your preferences and automatically adapts to your likes via AI, IoT, mobility and automation from lighting to room temperature, syncing the smart TV with your Netflix, Prime or Hulu streaming accounts, automatically ordering from housekeeping extra pillows or blankets or your brand of single malt whisky from room service, if this is what you like. Hilton CEO Christopher Nassetta describes the “Connected Room” concept: “Imagine a world where the room knows you, and you know your room.”

Article by Max Starkov

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