Artificial intelligence—AI for short—is one of technology’s current darlings. What many are wondering, however, is whether this term is all buzz and no bite.
Participants in "The Profitable Stay: Leveraging Hotel Technology" panel generally believe AI holds great promise for the hospitality industry, though its full potential may yet to be unlocked. The panel was held Oct. 30 during The Hospitality Show, which took place at the Henry B. Gonzalez Convention Center in San Antonio.
“There's definitely a promise there,” said panelist Greg Land, global industry leader in the travel and hospitality industry vertical for AWS. “I think we'll get there as soon as the data does.”
Land is particularly bullish on generative AI, which can create customized experiences by analyzing a customer’s past interactions, preferences and behaviors with a brand. Think Amazon and its hyper-personalized approach to recommending what each consumer should consider browsing—and buying—next.
Land noted one of his hotel group clients utilized this “Amazon approach,” leveraging its customer data platform to create hyper-personalized marketing. In the first six months, the company saw a $40 million uplift in cross-sell and upsell.
“This is one of the earliest ROIs we have for something AI based like this with a hotel company,” Land continued. “That's where you're going to get the revenue-generated side [of the equation]—when you start applying AI toward hyper personalization.”
Moderator Alex Alt, executive vice president of Oracle Hospitality and Oracle Retail, added that one of the biggest benefits he has witnessed from AI was the ability for hotel companies to significantly reduce its number of hospitality vendors. Alt referenced a previous discussion between himself and a Wyndham Hotels & Resorts executive in which the exec noted AI products were able to help the chain reduce its vendors from 400 to 220.
“That's sort of a wild discussion,” added panelist Scott Wilson, president of Sabre Hospitality. “That’s a 50 percent reduction. In another five years, I bet it’s another 50 percent reduction.”
Panelist Brian Kirkland, CIO of Choice Hotels, noted that one of the biggest values of AI would be simplifying the “spiderweb” that is a hotel’s ecosystem, which includes these hundreds of vendors.
“I depend on making sure that everybody out there is looking at that spiderweb we live in, and how do we transform it?” he said. “It's really about driving modernization for us. Make sure we move fast, move efficiently.” The fast-moving nature of technology can turn off some decision-makers, especially when the trial-and-error process is taken into account. Regardless, the breakneck pace of today’s tech is likely here to stay, Land noted.
“The greatest point of disruption expected in 2024 and 2025 for travel hospitality is the drastic pace of technology change,” he said. “Last year, it was cyber security. The year before, it was the technology and system value. That's how far we've come. Now our head is spinning because the change happens so fast.”
Land believes embracing that change is the way forward. That often involves giving employees permission to be creative. And to fail. AWS’s employees currently have the green light to experiment with Imaginator, an AI tool that can create images from text input, and Matome, which can customize content in niche digital spaces.
“We’ve blessed these programs for our employees [and they use them] broadly in their day-to-day lives,” Land said. “I get the feeling that they're learning and gaining efficiencies at the same time [from these programs].”
Though change is constantly upon the tech sector, panelist Jennifer Barnwell, president of Curator Hotel & Resort Collection, reminded the audience that AI is pervasive in our lives today – whether we stop to appreciate that or not.
“We use chatbots, we all use Microsoft products, Facebook,” she said. “There’s AI sprinkled in there.” Barnwell sees great potential and current uses for AI in terms of cost efficiency, overall efficiency and revenue generation for hotels. This starts with utilizing the technology for automating administrative processes or redundant processes, which frees up employees to focus on customer engagement. She adds that AI can also be used for accounting functions, day-to-day checklists and virtual marketing functions. “How can guests find you through your capable use of AI?” Barnwell asks. “How can AI help you or your sales team dig through sales needs and then, ultimately, how can AI be applied through the guest journey?”
Wilson added that, despite a hotelier’s opinion of AI, it’s here. And here to stay. The best course of action, then, is to embrace the new technology in ways that make sense for your business and purposes.
“If you think about any tech, there's always this burst of enthusiasm that this thing will solve everything,” he said. “Then there's a trough of disillusionment, and then you have this very steady state of real implementation. As long as you stay focused with very specific applications – identify a problem, focus on operational revenue, go in small and grow from there – it will be good. We all know that we just have to give it time.”