AI and IoT could change the face of the hospitality industry
by AMY BELL
A loyalty program member named Megan books a reservation for a hotel in Atlanta. Two weeks before her stay, Megan begins to receive messages from her “hotel personal assistant” about her upcoming trip. This knowledgeable assistant sends Megan information about what to pack based on the local weather, gives her advice about the best restaurants and entertainment in the area based on her preferences, and notifies her of any nearby road construction or traffic concerns.
When Megan arrives in Atlanta and checks into her hotel room, her favorite music is playing, the thermostat is set to her ideal temperature, and she is greeted by her digital personal assistant. “Welcome to your room, Megan!” the voice rings out from a chatbot speaker. “I hope you enjoy your stay. If you need anything at all, just ask.”
This may sound like a scene directly out of a futuristic sci-fi movie, but this level of hotel service is not too far off, according to Bret Greenstein, global vice president, Watson Internet of Things Offerings with IBM. Greenstein says as hotels embrace artificial intelligence (AI) technology, they will have the power to create a first-class, personalized guest experience.
“What’s exciting is how both the data from the Internet of Things, as well as the ability to build intelligence into service, is going to make all of our stays at hotels a lot more pleasant,” emphasizes Greenstein. “So many of us want to be understood and remembered, and it takes these technologies to do that. Just knowing each guest and being proactive to help them on their journey will make a hotel experience a little more magical.”
As hoteliers target the next generation of guests, these high-tech hospitality solutions are no longer a luxury, but a necessity. “With the advent of technology over the years, consumers, especially millennials, are the ones holding the reigns,” points out Mitul Makadia, founder and director of Maruti Techlabs, an IT company that provides automation and digital solutions to businesses. “They now carry out extensive research prior to making travel-related decisions, and it is high time that hotels incorporate a digital experience to meet the needs of the new age consumer.”
In fact, some hotel chains are already tapping into innovative new technologies to streamline business and improve customer service. For instance, Makadia says an increasing number of hotels are already moving their property management systems to the cloud, enabling them to scale up, work remotely and receive real time insights on their operations. “Technology allows us to personalize at scale,” Makadia adds. “Not just hoteliers, but any company can expect better conversion rates, increased brand value and ultimately a boost in revenue by 10 to 15 percent by tailoring their offerings for their audience minutely. The future of hospitality is all about using technology to strengthen guest relationships and improving customer experience.”
Personalizing the Guest Experience
The story about Megan at the beginning of this article is fictional – but it could become reality in the not too distant future.
“We will see automation of majority of internal processes pertaining to the concierge/front desk and room service, but more importantly, hoteliers will be able to highly personalize a customer’s experience by leveraging available data,” Makadia explains.
According to Greenstein, some hotels are already tapping into AI to personalize experiences for each guest. In fact, IBM announced its Watson Assistant this March, which will combine AI with the cloud and Internet of Things. IBM’s groundbreaking assistant solution automatically updates each guest’s room with music, temperature, and lighting preferences – and even syncs their smartphone, calendar and email through in-room technology.
“We built Watson Assistant because we learned so much from the hotel industry, as well as numerous other industries, about what they wanted,” Greenstein says. “They wanted to see integrations with companies that can help guests find restaurants, as well as integrations into the building management system and the hotel service systems to offer guests a truly personalized experience.”
IBM is currently in discussions with many U.S. hotels about Watson Assistant, and these capabilities are already running at Motel One in Munich, Germany. “We’re even in an airport in Munich,” Greenstein adds. “It is still in the early days, but it’s a really great time to be working in IoT and AI, especially in the hospitality industry.”
Makadia predicts that conversational AI could revolutionize marketing efforts and customer service for hotels across the globe. “Conversational AI in hospitality has the potential to assist hoteliers with their push marketing through bots and streamline a lot of day-to-day tasks like taking room service orders, offering suggestions, scheduling room cleaning service and helping travelers plan trips, to name a few,” he says.
Traditionally, hotel concierges recommend the same spa treatments, dinner reservations and other amenities to every single guest. However, Makadia says a hotel’s custom chatbot (similar to Alexa or Siri) will have the ability to suggest relevant offers based on each guest’s unique profile and personality. This will be facilitated through AI and Machine Learning. “Through virtual interactions, chatbots can bypass hotel staff and be a service representative – just like a human at the other end,” Makadia explains. “Given the industry’s skyrocketing operational costs, that same potential will push hotels to adopt bots aggressively sooner than later.”
He says AI will not just be limited to concierge or in-hotel amenities. Hotels will be able to take personalization a step further. “Say when a guest programs his room to ‘wake him up,’ AI could trigger automated features such as the drapes opening and turning on the guest’s preferred news,” he explains.
With the mix of IoT and AI, Makadia says hotels could also offer the following benefits:
• The hotel’s Wi-Fi network will instantly recognize an arriving guest’s smartphone.
• The IoT system will alert the management staff for quick, frictionless check-in for the guest.
• The AI-enabled system can allow auto-unlocking of the door as guests stand outside their room.
• The light intensity and temperature of the room will adjust to match the guest’s predetermined preferences.
“This can further be integrated with the hotel’s property management system, wherein, data about a guest’s preferences can be leveraged to design an experience tailored specifically to them,” Makadia adds. For instance, if the hotel learns a guest enjoys a particular amenity or activity, the chatbot can automatically send them a special offer for that selection.
“That being said,” Makadia continues, “you cannot personalize someone’s experience unless you know them. Hotels need to analyze both online and offline data to get an all-inclusive, in-depth picture of their guests’ preferences. When it comes to opting for travel experiences, hotels can leverage AI, Machine Learning and Predictive Analytics to assess the multiple channels in a customer’s path to ensure a personalized experience by delivering relevant products and services upon the guest’s arrival.”
IoT and AI technologies could offer another valuable benefit in the future. These solutions will enable hotels to streamline and automate business operations, slashing their operational costs.
“One of the things that strikes me, something I often hear from our clients in hospitality, is how difficult it is to provide consistent, high levels of service,” explains Greenstein. “It’s highly variable based on who’s staffing a desk at what time. But if you could use AI or other assisted technology, with all employees having the same training and knowledge, you wouldn’t have to worry about the skill level of every person representing your hospitality company. So, in a lot of ways, AI will bring the ability to elevate the skill level of every employee with the best, most current knowledge that will be useful for serving customers.”
Makadia reflects this sentiment. “We have already seen the impact of IoT in retail,” he says. “Similarly, we will see hotels leveraging the same [technology]to further increase the efficiency of their operations – especially when it comes to inventory management and resource management.”
Fixed labor costs are the single largest expense for U.S. hoteliers, accounting for more than 40 percent of their working capital, Makadia points out.
“Identifying gaps in operational efficiencies is the best place to start with when it comes to automation,” he continues. “Room service and concierge/front desk are the busiest and the most expensive to manage. They also happen to be the best candidates for automating and self-service.”
Makadia estimates that automation could reduce room service staff attendant costs by 30 percent for hotels. “Since automation relieves staff from repeat chores, it is likely that these hotels can benefit significantly when it comes to optimizing their working capital, along with operational costs in general, with an uptick in potential revenue growth,” he says. “Also, this leads to hotel staff focusing on improving service quality and the range of hotel facilities for guests.”
In the near future, hotel cameras could be used in conjunction with AI to improve customer service and guest security.
“Today, cameras just record activity,” Greenstein says. “But with AI and machine learning capabilities, those cameras could know what they see.”
For instance, a parking garage camera could alert hotel security if it “sees” someone breaking into a car in the parking garage. On the other hand, another hotel camera could notify maintenance if it records a cracked window, broken door or a bag of trash left in the hallway.
“An AI system could watch the hotel 24/7 for you and let you know not just that something happened, but what happened – and then tell you exactly what to do about it or even have someone do it for you,” Greenstein says. “This scenario represents the sort of facility that can take care of itself and can watch out for the things that matter to your business – customers, guests, or staff. To me, that’s the future I want to live in.”
Protecting Guest Privacy
Of course, advances in AI and IoT come with the threat of security breaches and invasion of privacy. Greenstein stresses that hotels need to make guest security and privacy a priority as they incorporate these new technologies.
“What hotel chains often ask me about is how to deliver this kind of cool value and still protect the privacy and security of their customers,” he remarks. “We live in a world where social platforms are basically destroying trust and privacy and where security breaches are a common concern.”
Greenstein says hotels can start by ensuring they own the data – not the technology service providers. “In our case, the hotel chain owns their data; IBM doesn’t. We have no access to it,” he explains. “We work with a lot of hotel chains in Europe, and in some countries where privacy is even more extreme, like in Germany, where we do a lot of work with hotels. We have built our DNA around data privacy and data ownership. I think the hotel industry, as a whole, needs to think about data privacy and put a high value on it.”
Embrace the Future
Although the details are still a little fuzzy, one thing is certain: AI and IoT will become an integral part of the hospitality industry in the not-too-distant future.
“As a hotelier, if you want to maintain constant growth and revenue streams, it is imperative that you embrace contemporary digital technologies to ensure satisfaction for both leisure and business travelers,” says Makadia. “We have gone from walking into a bank to withdraw cash to using ATMs and online payment gateways. Hotels need to define a similar experience on their part for the customers, too. This is where hoteliers need to evolve and redefine their processes by understanding modern day customer behaviors and expectations with the advent of AI.”
While some owners have been resistant to new technologies in the past, Greenstein believes modern hoteliers are under so much pressure to elevate the customer experience, they are willing to take the leap. However, he says it’s important for hotels to incorporate these solutions into their brands in a smart, thoughtful way.
“If you’re going to bring a new device into a hotel, it has to meet your hotel specs, it has to work with your security and your IT team, and you have to be able to manage your device so it works with a different user every day without compromising data,” he explains. “It’s harder than I think most people realize. It has to fit the hotel, not just be an add-on. We want to come in with a solution rather than just another device.”
Although incorporating AI and IoT may not be a walk in the park for some hotels, Makadia believes it will be well worth the effort. “When it comes right down to it, disruption today is being driven primarily by AI,” he says. “There are very few industries that are as customer-centric as hospitality. The future success of hospitality, when it comes to attracting customers and maintaining their loyalty, lies in leveraging Artificial Intelligence and Machine Learning.” ■
Amy Bell is a professional journalist, copywriter and ghostwriter based in Bradenton, Florida. With a Journalism degree from the University of Georgia and more than 15 years of experience, she writes for an array of publications and companies across the globe. To learn more, visit www.writepunch.com.
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