AI impacts on the hotel industry

From travel agencies to establishments, machine learning is driving a profound reorganization of the industry by introducing more complexity into the value chain between customer and hotel.

Artificial intelligence (AI) can play an important role in the hotel industry, not only in optimizing customer services, but also in developing technology for marketing, infrastructure and cost control.

AI and its applications in software, robotics, digitization and autonomous vehicles will enable the development of personalized digital management services for more meaningful customer experiences. At the same time, the current mobile context has changed the behavior of the public, particularly in terms of hotel discovery and booking.

Search for hotels

Google’s AI algorithms, for example, determine the best results based on the user, his location and his browsing history. The arrival of voice assistants such as Alexa, Echo or Google Home, favors for ergonomic reasons the creation of even more restrictive algorithms in order to offer the user a preselection limited to one or two answers to the question asked orally. The algorithms of these tools then play the role of prescribers rather than simple search engines.

Chatbot, natural language processing and reservation

Digitalization has allowed the emergence of new players in the sector. Nearly 98% of travelers have already booked on the Internet and sites such as Booking, Expedia or TripAdvisor have positioned themselves as leaders in the field. Other players are also present on the market. Last year, Avvio launched Allora, the first AI-powered booking platform for hotels and guests that optimizes the online experience. In this sense, instant messaging services are starting to take hold. Customers must be able to book and interact directly on their mobiles, in an adapted environment. They can communicate directly with the company, ask practical questions or make changes, which means more comfort and time for them, while freeing up time for hotel staff.

Chatbots based on artificial intelligence, natural language processing and machine translation are therefore an effective solution for both booking platforms and establishments. Booking has unveiled Booking Assistant while the booking site Kayak has launched a chatbot on several platforms and voice assistants including Alexa. According to the Mobile Travel Report, a study by Kayak on digital comparison published last year, the use of chatbots by the French is still in its infancy, but this lack of familiarity hides a definite interest in this tool whose immediate availability has many advantages.

Personalized marketing

Many companies are using personalized marketing to optimize interactions with their customers. With machine learning and Big Data, data collection and processing has evolved significantly and algorithms have particularly relevant applications in the hospitality industry. Personalization of content visible to the customer, communication and specific product recommendations are aimed at optimizing the conversion rate of establishments beyond advertising investments and traditional communication.

Optimize pricing through predictive analytics based on data such as demand, seasonality, competition, availability, potential macroeconomic effects, and customer preference.

Price optimization

Machine learning allows hotels to optimize their pricing through predictive analytics based on data such as demand, seasonality, competition, availability, potential macroeconomic effects, and customer preferences. Optimizing fares and creating ultra-personalized offers through AI requires strong databases but is the main opportunity for evolution in the transportation, logistics and travel sector. LodgIQ, Hotelsoft, BookingSuite, SnapShot or EPC-Expedia Partner Central, among others, now offer AI-based rate optimization tools and revenue management systems. These types of algorithms can also take into account the customer’s profile to propose a personalized pricing.

Facial recognition

Visual recognition technology automatically identifies guests and can be used to facilitate check-in and hotel security. It can also be combined with predictive analytics algorithms to measure guest satisfaction and reactions to specific elements of the hotel.

Royal Caribbean, for example, has decided to implement this facial recognition technology for check-in on its Symphony of the Seas cruise ship. This technology has the advantage of reducing the workload of the personnel who can then devote themselves to tasks with higher added value for the customer. It also reduces waiting time for passengers. Another advantage of this automated check-in technology is the ability for smaller establishments to offer 24-hour secure check-in.

Check-in, Check-out, E-Welcome

Digitalization allows a reorganization of many aspects of the hotel industry, the objective being to generate more profit by offering customers a better experience. The E-Welcome proposed by Qualitelis allows for example to anticipate the reception of the customer while proposing internal or external services and by creating a privileged relation, during and after his stay, thanks to a satisfaction questionnaire.

Moreover, tasks such as check-in and check-out can now be totally rethought as highlighted by two French start-ups: 1Check and RoomChecking. Artificial intelligence, fast check-in/fast check-out applications and facial recognition simplify hotel check-in. In addition, the use of smartphones as an electronic key or as an automatic payment method makes many aspects of the customer relationship more fluid. The payment interaction is transformed and allows the hotel to offer additional services and products, such as souvenirs, to strengthen the relationship and loyalty.

Robotization

With the rise of robots, a whole part of the customer experience has been turned upside down. For the time being, their presence in hotels remains the privilege of certain geographical regions that are particularly developed in terms of technology. In Japan, you can find the Aico Chihira robot and in Silicon Valley the A.L.O. robot-majordome. The creators of the Relay robots, which are being tested in several American hotels, indicate that more than 80% of the staff find that the robot helps them in their work and allows them to be more efficient. At the Hilton McLean, Virginia, guests can interact with Connie, the robot concierge, who can recommend places to visit, restaurants or help them find their way around the hotel.

Even if these remain original initiatives constituting more of an attraction and a marketing stunt than a real “cyber workforce”, the idea is well present and continues to develop. Created for the service and hotel industry in particular, they are used to perform the tasks of a receptionist, to carry suitcases, food, drinks or toiletries, to program an alarm clock and even to manage the thermostats of the rooms and of an establishment in general. However, we can doubt that reception robots will be installed in the long term once the fashion effect is over.

Room service, touch services and IoT

Ordering room service is getting easier with artificial intelligence and new technologies. Voice assistants like Alexa, Echo or Google Home can take your order directly and transmit it. Some hotels in the Marriott International and Best Western Hotels & Resorts chains, are testing personal assistants like Alexa and Echo by integrating them into rooms. As Travel Weekly reports, the customer feedback seems positive.

Via their smartphone, it is also possible to communicate in real time thanks to the establishment’s chatbot. Touch services allow to offer customers a wide range of services via an app and to offer them the possibility to book quickly. Guests seem to be developing more and more interest in technology tools that make it easy to control room brightness and temperature, via a resort-provided tablet (32%), smartphone (27%) or even voice activation (25%) according to the 2017 Oracle Hospitality/Phocuswright study.

Personalization and digital marketing can help optimize the conversion rate. For example, the start-up Victor&Charles analyzes the public information of future customers thanks to artificial intelligence in order to send hoteliers a list of recommendations to offer customers a personalized service and thus increase the conversion rate. In addition to room service, customers can also act on their environment thanks to connected objects, home automation and IoT platforms. This allows for a high degree of personalization throughout the guest’s stay, not only in their room but also in the common areas and around the hotel. Once again, this is a tool for customer loyalty and satisfaction.

Customization and recommendation of products

Artificial intelligence algorithms will be able to identify customer habits by gathering all the information about them, such as where they come from, the number of stays they have made, their gastronomic preferences, their habits, etc. The data is the basis of the artificial intelligence algorithms and allows the implementation of new loyalty strategies. These tools combined with predictive analysis and facial recognition offer the possibility to create a tailor-made welcome but also to sell additional products or services and thus improve the productivity of establishments. Personalization, which until now has been the preserve of palaces with a register of their customers’ preferences in order to be able to offer them a tailor-made service when they visit, is now becoming more widespread thanks to the computerization of customer preference collection.

It’s not just about sending coupons or offers, but about making tailored recommendations before and during the stay thanks to predictive algorithms. Hotels can therefore suggest to customers to add a bottle of champagne, book a spa or a table at the restaurant of the establishment. This type of personalization obviously increases the conversion rate and sells additional products. If the algorithms managing room service know the preferences of customers, based on their previous orders or public data available on their social networks, they will be better able to recommend certain products and encourage purchases.

Predictive maintenance

Cleaning staff management, supervision and auditing can be improved to ensure that guests have a room in optimal conditions. Predictive analytics will provide real-time information on the state of the infrastructure to maximize decision-making and minimize costs and errors. In this way, smart technologies will allow for better management of energy consumption in facilities. In addition, AI will be able to use each customer’s data to memorize his or her lighting and temperature preferences and prepare for future visits.

Hotel management can be greatly optimized thanks to intelligent algorithms. Management software is evolving and now proposes to use data and interconnection between PMS, Channel Manager but also communication-marketing and e-reputation management systems. Big Data tools are now integrated to be exploited through Customer Data Platforms.

KEY POINTS

• Prescriptions based on customers Internet searches
• Instant messaging services are starting to take hold
• Personalization of content visible to the customer
• Pricing predictive analytics based on data
• Visual recognition technology automatically identifies guests
• The use of smartphones as an electronic key or as an automatic payment method
• Robots are used to perform the tasks of a receptionist, to carry suitcases, food, drinks or toiletries
• Ordering room service is getting easier with artificial intelligence and new technologies
• Customers can act on their environment thanks to connected objects, not only in their room
• Identify customer habits, such as where customers come from, the number of stays they have made, their gastronomic preferences, etc
• Ensure that guests have a room in optimal condition.