We live in the Age of Information; an era where many services are automated and streamlined to increasingly tight margins. The hotel industry is no different – the accessibility of online price- comparison services has put more power in the hands of consumers and forced hoteliers to implement sophisticated pricing strategies to maximise their profitability without losing out to the competition.
According to many, the world is on the verge of yet another cyber revolution – the dawn of AI, or artificial intelligence. Just as the Internet is now something we all carry around in our pocket, AI is set to transform as diverse a cross-section of our lives as smartphones have. From the way we do business to the way we pick a restaurant, numerous changes are afoot thanks to this technology’s arrival on the world stage.
Klaus Kohlmayr has done plenty of thinking about how AI might impact the hotel sector. As the chief evangelist for IDeaS Revenue Solutions, a supplier of automated AI-powered revenue management technology to hotels around the world, he’s convinced that such technology will only be a good thing, for guests and hoteliers alike.
“A typical hotel makes roughly five million pricing decisions every year. It’s not humanly possible for any revenue manager to get every decision right, every day,” Kohlmayr told Hotel Magazine. “A revenue management system powered by machine learning not only generates prices that adapt to market changes but actually anticipates these variations in advance.”
In a competitive hotel market, slight pricing changes can have an enormous impact on demand. “Any hotelier operating in the near future without systems that can analytically decipher the impacts of a specific price change on occupancy and the resulting revenue benefit will be operating at a disadvantage,” Kohlmayr said.
“That’s why it is critical to have an automated revenue management system in place which uses sophisticated revenue science to produce accurate pricing decisions.”
Of course, any transformative technology is not without its critics, and concerns have been raised about the impact of AI on white collar workers. Without the need for mid-level positions to be filled by human beings, accountants, revenue managers, and even lawyers may find their jobs under threat.
Kohlmayr expressed support for the notion that AI will not so much take jobs away from people as alleviate them of some of the more tedious aspects of their work such as data entry.
With hospitality the name of the game, he argued that it’s unlikely that hotel workers will face considerable competition in guest-facing roles; however streamlined the process may be, there is no replacing a friendly face at reception to assist with check-in, or the rapport which develops between, say, a waiter and a group of diners.
“Hoteliers considering implementing AI-based systems in their property should first audit current systems and operations looking for highly repetitive processes that have multiple but predictive decision paths,” Kohlmayr said. “This will help identify what could be improved and be made more efficient through the use of AI.
“Ultimately, AI should allow hotels to review their team roles and see how they can be adapted to carry out less mundane tasks, so staff can spend more quality time engaging with guests and delivering exceptional and defining experiences.”
Instead, AI will lead to a back-of-house revolution, allowing hoteliers to process the increasingly vast amount of data on offer to them in order to provide guests with a more personalised, relevant experience.
“From research we know the majority of consumers are willing to provide data if they get a more personalised experience in return,” Kohlmayr explained. “Automation and AI will help make a hotel more productive by helping front-line employees to do their job more efficiently. The result of AI enhancements – when properly implemented – is higher levels of engagement and guest satisfaction.”
Whatever the outcome, one thing’s for sure – behind the scenes, the hotel of 2050 will operate in a markedly more streamlined manner than today. But, just as today’s hotels remain as focused on hospitality and guest satisfaction as those of the 1950s, the focus of the industry will always be on providing quality service.