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Embracing the AI Revolution: How Hotels Can Elevate the Guest Experience

By harnessing AI efficiently, hotel marketers can improve and personalize the entire guest experience while enhancing the staff experience, reducing costs and boosting profit margins.
12/11/2023
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The hospitality industry is evolving at a rapid pace, and as we approach this year end, artificial intelligence (AI) has played a significant role in driving this evolution. AI has become the prominent topic of discussion, fueling conversations about the potential impact that it can have on the travel industry as a whole. In 2022, the global AI market value was estimated at $136.55 billion, and it is projected to grow at a rate of 37% per year until 2030. While this exponential growth is certainly exciting, many in the hospitality industry are understandably nervous about whether AI will enhance or depersonalize the guest experience, as well as the potential impact on jobs. The answer, quite simply, depends entirely on how AI is used.

In reality, many hotel marketers have unknowingly ridden the AI wave for years. For instance, numerous revenue management and marketing platforms are underpinned by AI. These tools analyze and learn from large datasets to predict what guests want, their willingness to pay and the probability that they’ll book, giving marketers powerful insights into traveler behavior so they can tailor offers accordingly. Now, generative AI has thrust AI back into the spotlight, and hotels simply can’t afford to miss the next wave. The potential benefits are huge. For example, we’ve seen brands experience a 600% increase in guest engagement, a 35% increase in Net Promoter Score and a 56% savings on brand quality audits using AI-powered messaging. By harnessing AI efficiently, hotel marketers can improve and personalize the entire guest experience while enhancing the staff experience, reducing costs and boosting profit margins. Here’s how guests and staff can benefit from AI. 

Upsell and Cross-Sell Opportunities to Maximize Revenue Per Guest

With AI tools, hotels can automate, upsell and cross-sell opportunities. By using past guest behavior to predict future actions, AI can identify activities or amenities that will appeal to the guest and send a compelling offer. For example, if a guest has used the spa in the past, AI can generate a unique wellness package offer at the time of booking. Similarly, if guests have historically requested an early check-in or late checkout, shown interest in local attractions, or dined in an on-site restaurant during their past visits, AI tools can present these services as up-sell offers during their stay. By delivering offers via email or text message, guests can easily purchase packages or additional services without human intervention, while improving overall margins for the hotel and guest satisfaction. 

Solve Staffing Challenges, Save Time, and Enhance Customer Experience 

When hotel staff are overwhelmed with requests, the ability to provide a special customer experience diminishes. As hotel staffing woes continue, AI may prove to be the unlikely hero that alleviates employment shortages. In spite of fears that AI and automation tools could displace up to 800 million jobs by 2030, AI will also likely create new job opportunities, redefine roles and bridge the massive disconnect that the industry faces. As an understaffed industry, many hotels simply don’t have enough staff on hand to deliver the experience travelers want, even though they can capture high average daily rates.

By employing AI to handle mundane tasks such as requesting additional towels or shampoo, staff members gain the freedom to focus on what truly matters in hospitality: delivering personalized, memorable experiences that set hotels apart from the competition. This automation not only enhances the guest experience but also addresses staffing challenges by freeing up hospitality workers to concentrate on meeting guest expectations.

The role of the AI-powered virtual concierge is pivotal in supporting this. Guests can send messages and receive an immediate response 24-hours a day, seven days a week. Often, we see that AI chatbots can automate up to 80% of guest questions and requests, thanks to thousands of pre-filled responses, curated content and integration into third party tools, decreasing front desk calls by 65%. The virtual concierge doesn’t stop at guest interactions; it assists with direct bookings, food and beverage orders and planning nearby activities. Beyond operational efficiency, AI tools play a crucial role in collecting real-time data providing personalized review responses, micro-segmented marketing, up sells and guest feedback, helping hotels refine their current guest experience while shaping future improvements. 

Laying the Groundwork for AI Success

It’s clear that hotels should ride the AI wave or risk missing out, but the question is: how? AI may seem daunting, but hotel marketers can begin by taking a few initial steps - getting their critical data in order and creating an “open-to-AI” environment by testing AI-powered tools. 

First, establish a robust data collection strategy. AI is only as good as the data it ingests, so marketers should ensure they have good quality data–and a lot of it–to effectively train AI models. This can also be addressed by partnering with trusted digital marketing experts who provide high-quality data. By creating comprehensive guest profiles and consolidating data from disparate sources, including PMS, with other ancillary revenue sources, hotel marketers can work to paint a complete view of guests. This, in turn, will improve the accuracy of AI models.

Second, understand where AI is being used today and share that information. For example, best-in-class advertising platforms have been using AI to optimize hotel ad spend already. Also, testing AI tools such as AI-powered guest messaging, will allow hotels to see immediate impact on both revenue generation and operational savings. This will help build internal confidence in leveraging AI and create an open environment to further experiment with AI-powered solutions.

By using AI as a tool to enhance, rather than replace, human capabilities, hotels can strike a harmonious balance. This approach not only boosts efficiency and profit margins but also elevates the guest experience.

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