Would you allow a humanoid robot to greet a paying guest at your hotel? Would the hotel guest prefer the ease and convenience of service robots or the warmth and service of a fellow human being? There is no doubt that AI will create both challenges and opportunities for the industry. This article reviews the trajectory and impact of AI in the hospitality industry.
Humans and robots working together
The question might sound futuristic, yet the use of Artificial Intelligence (AI) is rapidly revolutionizing the business-as-usual model of the hospitality industry. It has the potential to disrupt the customer experience as we know it, and could provide powerful tools to help humans in their decision-making processes, which will impact the industry’s entire workforce.
The challenge is to ensure that companies integrate AI and frontline service robots in a fair and equitable way. For that, we need to consider several dimensions such as:
- The ethical considerations linked to the use of robots in a service delivery context (replacement, responsibility, trust/safety, privacy/data protection, autonomy, and human cues).
- The customer experience (customer-robot interaction).
- The optimization of robots’ usage by employees (employee-robot interaction/co-creation with a robot).
How AI can improve customer experience
By allowing robots to perform repetitive human tasks, AI is redesigning the customer experience. But to what extent? The question remains an open one. However, robots can now provide support to employees or even replace them in some cases. Robots are increasingly being created with specific features that allow them to perform some of the essential tasks of the industry. For example, service robots can perform some of the functions of a waiter, a barista, or the housekeeping team.
One notable example is The Henn na Hotel Tokyo Ginza - which took the risky bet to automate as many of its activities and services as possible with the use of now-obsolete robots. The goal was clear: the robots could add to the customer experience, improve margins by reducing costs, and eliminate headcount and workloads. But not everything went according to plan, and the reviews were mixed at best.
“Apparently, a large percentage of the robots were more adept at creating work for their human counterparts than they were at reducing it,” Esther Hertzfeld wrote in an article for Hotel Management. The experiment failed, and the hotel ended up sacking more than half of its 243 strong robot workforce after complaints from both staff and customers.
How the Hospitality sector can take advantage of futuristic opportunities
Robots have come a long way since then, and the robotization of the industry is accelerating rapidly as technology and connectivity improves. The use of AI in the field of robotics has also opened up enormous opportunities for the hospitality sector, with a growing range of uses that can improve customer experience, brand awareness and customer loyalty.
More recently, COVID-19 has played an essential role in developing this trend. Robots now allow certain skills, actions and services to be executed more safely than human beings. There is simply no risk of catching the virus with robots because robots simply do not… breathe.
This non-negligible fact is beneficial for ensuring a safe customer experience and protecting the employees during a pandemic. Robots can be easily sanitized between each guest and, therefore, ensure safe in-room delivery, for instance. They can perform UV disinfection that humans cannot, and non-contact services such as digital concierge offerings, chatbots, or voice-activated and enabled rooms are already fixtures in the hotel rooms of tomorrow. Besides service robots, digital interfaces driven by AI are likely to become omnipresent across the industry.
How AI will impact society and workforce: Is a collaboration possible?
At this particular time, the usage of robots makes perfect health sense, but the rapid deployment of robots is not without its controversy, especially in countries where the unemployment rate is high. Seasonal, casual and some operational staff in the hospitality industry could be most impacted over time by the rise of artificial intelligence.
Research by McKinsey shows that AI is already having a major impact on the workforce, but it’s not the only technological mega-trend shaping the future of work. “Trends like remote work, e-commerce, and continuing automation could mean more than 100 million workers might need to find a different occupation by 2030 - that’s roughly the same as the populations of Canada and Italy combined,” the consultancy said in an August 2021 report.
Getting service robots and customers to co-exist
In addition, a key question still needs to be addressed: How will customers adapt to this trend? Do they expect or want their service to be provided by robots? Or, do they still want to be welcomed by smiling humans? The question doesn’t seem to be settled yet.
For some guests to accept the implementation of AI enabled service robots more easily, the robots must be able to show empathy and be able to interact, which remains a major technological challenge. At the same time, a whole new generation of travelers is growing increasingly accustomed to a humanless service experience. The future might bring a combination of both.
It would not be surprising if, in the future, if service robots were to become a new selection criterion for potential guests when they choose where to stay. Indeed, some hotels or hotel chains could choose robots to differentiate themselves and attract specific guest segments.
There is little doubt that upscale hotels will keep prioritizing human interactions, in order to maintain a competitive and premium offering. However, in other types of hotels where human interactions play a less important role, robots could definitely do the job.
Overall business performance: How AI can become a friendly tool
AI is a game-changer for the hospitality industry’s workforce as it will enhance hotels’ ability to offer even more personalized and tailored-made experiences.
As a business tool, AI also allows owners and managers to review an enormous quantity of the information and data they produce every day across their organization. Therefore, hoteliers should be receptive to capitalizing on AI and implementing AI-based strategies in order to improve revenue, and remain cost and product competitive in the future.
Other opportunities for AI use might include:
- Reputation Management: AI can analyze guest reviews and social media posts about the hotel and provide automated responses or support employees in their communication by flagging negative feedback.
- Personalization: AI can provide guests with timely recommendations by analyzing their preferences, interests, and behaviors and provide them with specific tailor-made offers.
- Revenue management, pricing, and predictive analytics: AI can provide real-time market intelligence indicators and help hoteliers adapt prices. It can also support inventory management and sell upgrades to guests based on previous behaviors.
-
Sales & Marketing: AI, by tracking and analyzing booking patterns, seasonal demands, as well as other guest behaviors, hotels can design a personalized marketing campaign to attract the target segments.
The role of emotional intelligence
Following this review of the use of AI in the hospitality industry, it is clear now that it will become part of every daily business activity in the not too distant future. As professionals, questions remain about how to adapt the workforce to those new practices. Emotional intelligence (EQ), which groups a core of competencies (e.g., managing one’s own emotions and the ones of others), was seen as the most essential skill-set for hospitality workers. With all the new technologies, is emotional intelligence still required today?
The answer is yes!
Customers, especially the youngest generations, will expect high-end service levels with integrated technological solutions. So far, AI can only be programmed to respond to specific inputs. Through their soft skills, employees can adapt to a variety of situations without having to be trained and they can display better empathy, kindness, or integrity than any machine built thus far. However, those same employees who were asked to possess high EQ will be required to be tech-savvy to monitor all the AI tools currently implemented in the industry.
This implies that hospitality schools will need to teach the necessary hard and soft skills so employees will be efficient at using, monitoring, and evaluating technology applications in the industry. This is certainly a shift for the workforce, and it will also require managers to train their current staff well.
How to apply AI in the future
The era of AI in the hospitality industry is just beginning. The advent of the AI era is disrupting the way customers will experience “hospitality” in the near future, as well as the activities of the workforce in both front and back of house.
One clear example is the development of the Metaverse, a virtual world focusing on social connections, which has the potential to become a new booking channel that will offer immersive experiences to customers and allow them to visit rooms and properties even before arriving at their destination. This is a whole new dimension of the application of AI that the industry should explore quickly.
Finally, the industry needs to keep in mind that new types of AI are on the way, which go beyond our current limits of technological understanding. These new technologies have the potential to disrupt the industry even further, and all industry stakeholders will need to embrace the use of AI to remain competitive.
Research Assistant & Visiting Lecturer at EHL Hospitality Business School
Associate Professor - Associate Dean for Research, Innovation & Faculty Affairs
