Use of AI in the Hospitality Industry: 12 Practical Examples

Bryan Michalis
Bryan Michalis
June 14, 2024
March 6, 2024
Use of AI in the Hospitality Industry: 12 Practical Examples

You’ve probably noticed it too: the topic of artificial intelligence (AI) is hard to escape. Every industry publication, blog and news outlet seems to be discussing it.

And that’s no surprise. AI technology has been developing by leaps and bounds over the past few years.

Its many new and improved capabilities create opportunities to develop innovative applications or improve existing software solutions to help streamline hotel operations and drive revenue.

This raises questions such as what the use of AI in the hospitality industry looks like. And which real-life benefits does that bring for your hotel?

Let’s find out!

12 Examples of the Use of AI in the Hospitality Industry

AI has massive potential to benefit your hotel and can bring advantages for both your staff and your guests. Below, you’ll find four areas where you can immediately start leveraging AI to delight travelers, unburden your team and boost profitability.

Streamlining Operations

Infographic: AI Streamlines Hotel Operations

1. Quick Responses to Guest Reviews

Guest reviews are critical to building a strong reputation and convincing new guests to book with you. But it’s not only important to generate new comments. You need to respond quickly as well.

AI can help you write thoughtful replies without spending hours on it. This shows guests you value their input because you’re taking the time to get back to them. Harvard Business Review even found that hotels that begin responding to online feedback receive 12% more reviews, and their overall scores increase.

2. Automating Data Collection and Collation

Gathering data and making it usable is a tedious manual task in many departments. But collecting data is important if you want to identify areas for improvement and make data-driven decisions.

Take room service as an example. An AI-powered tool could analyze order flow to identify high-demand periods as well as the most popular dish by guest segment. This knowledge can help you optimize your menu, improve inventory management and reduce food waste.

Revenue management also stands to benefit. Once your business intelligence solution gathers internal, market and competitor data, an AI-driven tool can take over data collation and suggest strategic rate updates. That leaves you with more time to analyze your performance and form the appropriate pricing strategies.

3. Optimized Staff Schedules

Especially if you’re already short-staffed, it’s critical to schedule the team members you have wisely. Avoid overworking them or overscheduling them on slow days to help retain staff.

AI-powered tools can use occupancy forecasts and productivity data from operation departments to help you schedule your team more efficiently. That reduces your staffing costs and keeps operations running smoothly.

Enhancing Customer Service

Infographic: AI Enhances Guest Service

4. Multi-Language Support

Not all guests will speak your local language and multilingual staff can be hard to come by. So why not make it easy for travelers to get help in their mother tongue?

AI-powered hospitality chatbots and virtual assistants like Canary AI can instantly translate and communicate in over 100 languages. This ensures guests always have immediate access to information in a language they understand.

5. Online Front Desk Service Options

Offering online check-in, contactless check-out and digital payments is another way to give guests more flexibility and lighten your team’s load.

AI-powered systems can handle all these admin tasks securely and quickly. They can also tie them into the rest of the digital guest journey to create a smoother experience for travelers. For example, if the system collects information about the guest upon arrival, it can leverage that data to personalize service offers later.

6. Immediate Replies and Recommendations

Guests expect answers to their questions quickly, both during and after the booking process. Fast answers during the planning stage can make the difference between winning the reservation or losing it to a competitor. Once guests are in-house, a swift turnaround can make the difference between a four- and five-star review.

However, your team can’t answer every question immediately. Again, AI comes to the rescue. AI-powered website chatbots and virtual assistants can instantly respond to FAQs and even guide people through the booking process. AI-based messaging systems can do the same for your in-house guests.

Thanks to natural language processing, these tools create a human-like interaction. Users automatically get all their questions answered without feeling like they’re talking to a computer.

Discover how Wyndham Hotels & Resorts implemented Canary AI at over 6,000 hotels across the U.S. and Canada, so they could offer guests faster, more personalized service.

Personalizing the Guest Experience

Infographic: Personalize the Guest Experience with AI

7. Personalized Upselling and Cross-Selling

AI communication tools can support your upselling and cross-selling efforts. They leverage guest data to share personalized recommendations, so guests only get relevant offers that suit their profile.

This leads to higher conversion rates and boosts your hotel’s incremental revenue. On top of that, intentional upselling enhances the guest experience because travelers discover add-ons they enjoy and may not have heard about otherwise.

8. Tailored Activity Recommendations

Use your AI guest communication tool like a digital concierge. It can suggest day trips and activities based on a guest’s profile and past recorded preferences. This is similar to upselling and cross-selling, but is not directly linked to driving revenue. Instead, this type of service ensures travelers get the most out of their stay and will leave raving reviews — happy customers and a solid online reputation will lead to increased revenue over time.

9. Customized Room Settings

If you have smart in-room technology, you have another chance to enhance the customer experience with AI. Set your system up to save guest preferences like temperature, lighting and entertainment settings to their profile. Apply them throughout their current and future stays, so they feel at home the moment they walk in the door. This works especially well for repeat bookers and long-stay guests.

Smart Marketing and Revenue Management

Infographic: AI for Hotel Marketing

10. Predictive Demand Analysis and Forecasting

Use an AI-powered revenue management system (RMS) to analyze historical data as well as forward-looking demand and market data. This can provide accurate forecasts for your property and other deep insights regarding source market behavior and emerging booking trends.

Armed with these insights, you can adjust your pricing and distribution strategy to make the most of both high- and low-demand periods.

11. Optimized Pricing

A smart RMS can even make real-time rate updates quick and simple. The system can either give recommendations based on demand shifts and other live data or directly change rates for you. This ensures your prices remain in line with the latest market trends. As a result, you’ll always maximize revenue and avoid leaving money on the table because of an unexpected market adjustment.

It may feel strange to leave pricing up to your RMS at first. But don’t worry, you can always override its decisions if you don’t agree with them. As the system keeps setting rates and analyzing results, its machine learning capabilities will steadily improve its recommendations.

12. Targeted Promotions

Use the same pricing insights to inform your promotional strategies. See how demand is evolving well before you see it on the books, for example. Then, target your offers to the most promising source markets. Or, create promotions for slower periods to boost demand and drive revenue during the off season. You can get even more granular by creating deals for specific guest segments to increase their relevance and conversion rates.

AI Use Cases in Hospitality Set to Keep Expanding

AI is only in its early stages now and it’s hard to know what may come next. As the technology develops, countless new examples of AI in hospitality will emerge that we haven’t even considered.

The overall trend for AI use cases in hospitality is clear though. We’ll continue to see a strong focus on personalizing and enhancing the customer experience at all stages of the guest journey. The time-saving aspect of AI and digitizing repetitive tasks will remain important as staffing issues persist.

Finally, we can expect more back-of-house departments to begin leveraging AI tools — whether it’s engineering teams using it for predictive maintenance or housekeeping taking advantage of smart scheduling and inventory planning. And of course hotel commercial teams will keep finding new ways to let AI support the strategic work that drives business and profitability.

In short, AI can become the secret ingredient to your hotel’s ongoing success - even in trying times.

Download the Ultimate Guide to AI in Hospitality now and discover how AI will help you move the needle on your key KPIs.

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