Artificial intelligence has been actively used in hotels for a variety of purposes over the past few years, and it has gathered momentum to better hotel operations. The challenge is how to leverage the right technologies to deliver a seamless experience for guests while also generating bottom-line benefits.
While AI is relatively new for most people, the hospitality industry has always been late with everything related to technology, said Carolina Lacerda, EY practice leader. “This time, AI is moving fast and it's everywhere, and it’s likely the guest doesn’t even understand or see the changes as it’s become so ubiquitous. If used correctly, AI could primarily become a driver to help hotels become more efficient,” she said.
One significant area where AI benefits hotel operations is in personalized guest experiences. Through AI-powered chatbots or virtual assistants, guests can have their queries addressed promptly, whether they are about room service, local attractions or check-out procedures. These systems utilize natural language processing to understand and respond to guest inquiries, improving overall satisfaction and reducing the workload on hotel staff.
AI-driven analytics enable hotels to better understand guest preferences and behaviors. By analyzing data from past stays, social media interactions and surveys, hotels can tailor offers, services and room amenities to meet individual preferences, fostering guest loyalty and positive reviews.
In terms of operational efficiency, AI can play a critical role in properly optimizing resource allocation. Predictive analytics can forecast demand for rooms, dining services and other amenities, allowing hotels to adjust staffing levels and inventory accordingly, minimizing waste and maximizing profitability.
Software company Mews is looking at how to use AI to boost productivity in the hotel environment. “We and our partners are looking at AI through the prism that it is actually going to be good for your bottom line and you need to use AI [to] help you operate in a much more productive way,” Mews founder Richard Valtr said.
Moreover, AI-powered maintenance systems can monitor equipment health in real time, predicting potential failures before they occur. This proactive approach reduces downtime, ensures guest comfort and saves costs on emergency repairs.
Operational Benefits of AI
In the hotel industry, AI can significantly enhance operational efficiency and guest satisfaction through several innovative strategies, said Max Spangler, vice president of technology at Charlestowne Hotels. “AI can support sustainable practices by identifying inefficiencies in resource usage, helping hotels reduce their environmental footprint—although this may involve initial higher costs and internal resistance to operational changes,” he continued. “Each of these AI applications offers a way to improve various aspects of hotel management, balancing potential benefits against the considerations and trade-offs inherent in their implementation.”
Other examples of implementing AI in hotel operations include:
Revenue management: With AI, revenue management can help analyze market data and forecast trends faster. “AI can help increase precision around demand forecasting,” said Jason Bryant, vice president of Nor1, part of Oracle Hospitality. AI-driven pricing algorithms can dynamically adjust room rates based on booking trends and local events to maximize revenue per available room, though Spangler warns they require careful handling to avoid disenfranchising price-sensitive customers.
Guest services: Employees can learn from AI chatbots by observing how they handle common guest inquiries, freeing staff to focus on more complex and personalized guest interactions.
Reservations: Chatbots and virtual assistants have helped reduce employee count in call centers and filter questions that don’t need an actual human being to answer or resolve.
Smart devices: AI enablement of devices across the hotel property will help to optimize operations and enhance the customer experience. For operations, physical devices such as elevators, cameras and in-room devices would be equipped with AI-enabled sensors that track device health, predict failure, take proactive remediation measures and reduce likelihood of operations and/or guest-impacting events. For customer service, in-room devices, for example, would be AI-enabled to detect guest identity and adjust devices (e.g., lighting, room temperature) based on guest preference and historical stay patterns.
Guest profiles: AI can analyze guest data to predict preferences and behaviors, helping staff anticipate and meet guest needs more effectively, thus enhancing the guest experience.
Efficient staff planning: AI-enabled staff planning can assess a broad range of staff impacting variables, including occupancy projections, booked guest profiles and external influences (e.g., extreme weather) to predict occupancy levels and corresponding housekeeping needs, said Anthony Karakkal, chief business officer, travel, transport, hospitality markets, logistics and real estate markets at LTIMindtree. “Optimal staffing levels are projected, which unlocks superior customer service while controlling labor costs,” he said.
Inventory management: Other instances of operational efficiency increases include AI-driven tools for inventory management as well as forecasting and managing stock levels for items like linens and toiletries. AI can also be used for managing housekeeping schedules and workflow. By analyzing guest check-in and check-out data, AI algorithms can optimize housekeeping routes and schedules, ensuring rooms are cleaned and prepared with maximum efficiency. “There are opportunities to create real-time demand forecasting help the hotelier staff better prepare for who and what they should they have on to run their operations the most efficient way possible,” Bryant said.
Smart energy management: AI can optimize energy consumption in hotel operations and staff can learn to use these systems to maintain comfort while reducing costs and environmental impact.
Food and beverage innovation: AI will revolutionize menu planning and inventory management by providing food selection recommendations and required volumes based on guest food preferences and historical consumption patterns, Karakkal said.
Waste management: There is now a camera technology that can track the food waste at restaurants to help better manage inventory and reduce food waste.
Workforce Innovation: An AI-enabled operations staff will be realized by infusing AI-rendered expert knowledge at each customer touchpoint, Karakkal said. From the contact center to hotel service personnel (front desk, concierge, housekeeping, maintenance, etc.), all hospitality roles would have ready access to context-aware expert knowledge for their work tasks, with guidance tailored within the context of their work function. Included will be guest-specific engagement prompts, enabling hotel workers to service the guest in a satisfying and ultra-personalized manner.
Marketing: AI's capability to generate high-quality images and videos can revolutionize marketing, creating engaging content quickly and at a lower cost. However, this technology currently struggles with creating completely accurate and context-aware visuals, which could potentially misrepresent offerings if not closely monitored, Spangler warns. “Training programs enhanced by AI-driven simulations can provide immersive learning experiences, but the effectiveness of such training depends on the sophistication of the AI, which may not fully capture the nuances of human interaction and decision-making.”
Back-end Operations
At management company Charlestowne Hotels, the company is leveraging AI to transform its back-end operations and drive a new level of efficiency in its corporate and sales functions. “Through a custom-developed API using Google Cloud Functions, we have integrated leading AI models such as OpenAI's ChatGPT and Anthropic's Claude into our daily workflows,” said Spangler. “This integration enables our teams to automate routine data analysis tasks, significantly reducing manual effort and allowing our staff to focus on more strategic activities. This technology is layered into our Google Workspace environment, where any corporate team member can bring an AI assistant into a chat, group chat or have it reference and review internal data. This all happens within the boundaries of our data loss prevention tools, meaning sensitive information, like PII data, cannot be shared with the model.
“AI assists in identifying patterns and insights from complex datasets, helping us make informed decisions rapidly and enhancing our ability to adapt to market changes, among many other use cases.”
While hotels have been using AI in different ways, employees also need to learn how to interact with it, Lacerda said. According to her, examples include making sure the service has actually been completed, and not just checked as completed; making sure guests don’t feel like hotels are invading their data privacy; and making sure the hotels are actually using information gathered on guests.
“As AI technology evolves, the limitations we face today, such as data dependency and integration costs, may shift, offering new opportunities and challenges in improving hotel operations and guest experiences,” Spangler concluded.
This article was originally published in the June edition of Hotel Management magazine. Subscribe here.