LONG BEACH, CALIF.-A good way to tackle a subject that makes some people uncomfortable is to use humor to get your message across. Alex Coury, CEO of Coury Consulting, did just that at the start of the AI/technology conversation at the California Lodging Investment Conference last week at the Westin Long Beach, weighing in on artificial intelligence’s growing influence on hotel operations, upgrading, and changing consumer needs. Before getting down to business, and at random points during the panel, he channeled past and present U.S. presidents in a way that would do celebrity voice impressionists/comedians Darrell Hammond or Jamie Foxx proud.
Or, like Jackie Collins, senior director/vice president of Arthur J. Gallagher & Co. Risk Management Services, one can get right to the point without sugar-coating. When moderator Glenn Haussman likened the arrival of AI to that of other technical breakthroughs in past decades from fax machines to block chains in terms of some hesitance and resistance. Collins matter-of-factly told him and the audience, “After initial resistance, everybody now has an iPhone or smart phone. AI is going to go the same way, and you’re going to have to accept it and start using it. It is going to make many changes on the industry side and start out slow, but every single segment of the industry will be affected by AI in the long run. We now need to consider how we're going to apply the resources we have out there for maximum impact and success.”
For his part, Cesar Wurm, vice president of commercial for premium brands of IHG Hotels & Resorts, appreciates how embracing AI can help hotel businesses run more efficiently, as AI is increasingly implemented into revenue management systems and forecasting models.
“We are using an AI tool for our restaurants called BORNE. Here, you drop in an address and it gives you a 25-page sales and marketing output with (restaurant industry) intel, recommendations for cuisines that are more likely to be successful with a customer base, how many competing restaurants are in the area, and so on,” he said. “This intel allows us to (run our restaurants) more efficiently, make better decisions, and drive higher profits.”
Even with all of that potential for growth opportunities, there remained a shared concern about AI overtaking the human elements of hotel operations. Haussman citied such downsides as resulting in lapses such as guest service bottlenecks, slow response times, housekeeping delays, billing, reservation errors, and staffing shortages or overages. However, Coury remained firm in his assessment that AI is not just another trend, but also a key player in biggest transformation coming to hospitality.
“Hotels that integrate AI today will gain a competitive edge,” he said. “Another important thing to think about when we talk about cost and challenges is approaching it from a perspective of incremental implementation. There is no cost barrier to use AI. As hotels can slowly and affordably adopt it into their organization. From a consulting perspective, I'm really excited to leverage it on, you know, across the board of all things that I just mentioned, but it's, it's here. It's not just passing trend. It's here to stay, and it's important that we get ahead of it.”
Haussmann then cited a recent American Hotel and Lodging Association report concluding that 85 percent of hotels out there were facing labor shortages and question how new technologies would help managements rethink and reimagine operating hotels in order to be able to offset labor shortages if people aren’t there to do some of those necessary jobs. Wurm confidently replied that at IHG, AI was being leveraged for operations in ways that could create new efficiencies without negatively impacting guest services or experience.
“It could be in the form of sensors that you put in machinery in the back of the house, which will tell us ahead of time when some (machinery or parts) are about the break so the whole system won’t shut down,” he said. “It may tell us when we may need some engineers in the house. Same thing with inventory management, where AI will tell us when it is time to reorder X, Y and Z based on consumer or operations patterns. We're always looking at ways, what we can move to help facilitate our efficiency levels without any impact on the guest experience.”
Speaking from a real estate and finance perspective, Tim Edgar, founder of hotel investment platform Hotel Investor, noted there are things that hotel owners and management can do with AI to aggregate common questions when they are looking at the financial records or answering questions about subscription documents or operating agreements.
He argued one can use AI to handle frequent questions so that that frees up staff bandwith to deal with more complex or day-to-day concerns. Collins, meanwhile, looked at applications of AI technology from a customer perspective, in terms of how AI could take into account personal preferences and travel habits to ensure everything the guest wants from a hotel stay will be waiting for her at check in.
“I think we need to be a little bit concerned about getting overly reliant on that, as it could make us lazy or sloppy,” Haussman assessed, remaining on the “devil’s advocate” track in terms of losing the definition of hospitality while making it run more efficiently. He put forward a hypothetical of AI replacing the human touch that personalizes a hotel stay. For example, if one clicks a button that relays a message that tells Jerry, ‘Congrats on your new job,’ customer Jerry may figure out AI is doing the work rather than a human putting in the effort. “If you start to utilize (AI) too much, you're not going to be able to make the personalized impact that you need on people because you're relying on that easy technology.”
Collins addressed concerns AI brings up in human resources situations and how different kinds of insurance policies are required to offset various problems and lawsuits brought about by prospective or current employees who suffered professionally as a result of incorrect information. Edgar, meanwhile, discussed how AI could help cut costs while improving customer service, especially in areas like housekeeping.
“AI predicts key demands and dynamically adjusts cleaning schedules,” he explained, noting how AI-driven housekeeping management could help management save money through preventative maintenance or identifying equipment issues before machines fail, reducing the downtime. “Predictive analytics, meanwhile, ensures the right number of staff are on duty, avoiding under- or over-staffing. This has really been helpful to us since we're already using a lot of AI’s in our hotels. An example of that specifically is MGM Resorts, which reduced their payroll costs by 15 percent using AI scheduling.”
After a few more barbs to cut the tension, Coury wrapped things up in a balanced way by noting that by taking a thoughtful approach to implementing AI, the human side of hospitality could be maintained or even improved. “The personalized experience is important, but AI can support, make our (management’s) lives easier, and make the guest experience more enjoyable. When we talk about the guest experience, AI has the potential of revolutionizing the guest journey from pre-booking to post-stay interactions, from booking history and what behaviors can help customize their experience.”