AI in Hospitality: Understanding How to Leverage AI for Hotels

December 19, 2023

Artificial Intelligence (AI) is revolutionizing the hospitality industry, and the world, as we know it. In the United States alone, AI is expected to contribute to a 21% increase in GDP by 2030, highlighting the economic impacts of this new technology. 

The hotel industry, with its constant quest for innovation and personalized guest experiences, is no exception. Already, large hotel chains like Hilton and Hyatt are using AI to provide more elevated, personalized services from check in to check out. 

Whether it’s room service, housekeeping, replying to reviews or increasing direct bookings, AI is poised and ready to work magic within the hotel industry.

Today we’ll dive into the many exciting ways AI is reshaping the hospitality landscape, including:

  • Impacts of AI on the hotel industry 
  • How AI is revolutionizing hospitality
  • Innovative AI tools to elevate your hotel operations

What is Artificial Intelligence (AI)? 

Artificial Intelligence, or AI for short, refers to machines that can process data with a human-like intelligence. These smart machines can tackle problems, learn from experience, grasp human language, and adjust to new situations – just like we do. 

In the world of hospitality, AI helps us create clever tools that think and act more like us, making our work more efficient and our guest experiences even better. 

Understanding the Different Forms of AI

To understand the benefits of AI in the hospitality industry, it helps to know the difference between different forms of AI technology: AI, Machine Learning (ML), and Natural Language Processing (NLP).

  • Artificial Intelligence (AI): AI encompasses the broader concept of creating machines that can perform tasks that would typically require human intelligence. These tasks may involve reasoning, problem-solving, planning, perception, language understanding, and learning.
  • Machine Learning (ML): Machine Learning is a subset of AI that focuses on creating AI algorithms to help us make better decisions, which it does by analyzing large amounts of data. It involves the use of statistical techniques to improve their performance on a specific task over time.
  • Natural Language Processing (NLP): NLP is a branch of AI that deals with the interaction between computers and human language. It allows computers to understand, interpret, and generate human language in a valuable way. NLP is a critical component when it comes to AI-powered applications in the hotel industry, such as chatbots and automated responses to guest reviews.

The Current Use of AI for Hotels

So, what are the practical applications of AI in the hotel industry? 

In order to stay ahead of the curve, it’s necessary to understand how AI can fit into every aspect of hotel – from day-to-day hotel operations to executive-level decisions:

  • Automation: AI helps us automate repetitive tasks, liberating valuable time for hotel staff to focus on providing exceptional guest service. In fact, automation can directly support customer satisfaction, such as by using AI chatbots to address guest inquiries immediately.
  • Predictive Analytics: AI tools designed to sift through vast amounts of data analytics help us predict customer behavior and market trends. Predictive analytics allow for room rates and staffing levels to be adjusted based on forecasted demand, something Hyatt hotels recently introduced.
  • Personalization: We know that 78% of travelers are more likely to book with hotels that offer individualized service. With AI, we can better analyze customer data, allowing for improved personalization and guest experiences.
  • Communication: AI-powered chatbots and virtual assistants are redefining guest interactions. Hilton recently introduced Connie the Concierge, an AI concierge designed to assist hotel guests with their stay.
  • Operations: AI has a substantial impact on the back-end of hotel operations. It can monitor and predict maintenance needs in hotel rooms, optimize room turnover, and ensure all issues are addressed before they inconvenience guests.
  • Revenue Management & Sales: AI also optimizes pricing and inventory decisions, forecasting demand and adjusting room availability accordingly, maximizing revenue. 

AI’s benefits extend far beyond convenience and efficiency; they empower us to provide exceptional service, make informed decisions, and create memorable, personalized experiences for our guests while optimizing our operational efficiency.

The Best AI Tools for Hoteliers in 2023

AI for Hotel Marketing 

Site Minder Demand Plus: By utilizing AI technology, hotels can manage their listings on metasearch sites like TripAdvisor and Google Hotel Ads. Given that 75% of travelers use metasearch engines to find hotels, Site Minder helps hotels lead these travelers directly to their websites.

MARA: An AI review reply generator enables hotels to respond to guest reviews within seconds, reacting three times faster. This enables hoteliers to better manage the online reputation of their hotel – a strategy that is shown to impact direct bookings. According to TripAdvisor, 77% of travelers are more inclined to make reservations when hoteliers respond to reviews.

AI for Hotel Operations 

EasyWay Guest Messaging: This AI-driven platform analyzes words, phrases, and emojis used within guest messages throughout their journey. EasyWay provides hoteliers with a better understanding of their guests preferences, allowing for proactive responses and problem-solving.

ALICE by Actabl: ALICE automates and optimizes your hotel operations – housekeeping, room service, guest communications and more. ALICE is designed to seamlessly connect housekeeping, room service and front desk teams in order to improve service, minimize mistakes and increase guest satisfaction.

AI for Hotel Revenue Management Allora is the world’s first booking engine platform powered by AI. Developed by Avvio, a hotel technology provider, it uses learning models to analyze hotel booking data and optimize booking engines to cater to guest needs, ensuring a seamless booking experience and increased direct bookings.

GameChanger by Duetto: Duetto’s pricing algorithms leverage AI to help hotels determine the right price for their rooms, maximizing total revenue per available room. This ensures competitive pricing and increased profits.

Ideas Revenue Solutions: IDeaS leverages AI to assist hotels in forecasting accurately, pricing confidently, and achieving greater profitability by dynamically adjusting room rates based on demand and other factors.

AI is the Future, Are You Ready?

The hotel industry has always been about providing top-notch experiences to guests, and AI is proving to be a powerful tool to achieve just that. From enhanced direct bookings to personalized guest interactions and more efficient operations, AI is making a significant impact. 

In the age of AI, staying ahead means embracing these technologies. Whether you’re a hotelier or a traveler, understanding and leveraging AI’s capabilities in the hospitality sector is the key to unlocking a brighter and more satisfying future for all involved. As the data shows, AI is revolutionizing the industry, and it’s time to adapt and thrive in this AI-driven era. With AI, the possibilities are endless, and the hotel industry is poised for a future where guest experiences are truly exceptional.