6 Applications of AI Technology in the Hospitality Industry

The AI Market for Travel & Hospitality (T&A) is set to jump over $1.2 billion by 2026, while the growth rate may be over 9.7% annually. Since AI is capturing customer experiences, operational efficiencies, and revenue potential, the hospitality vertical is up for a technological revolution in the area of hospitality digital solutions. Let's have a closer look at some of the key applications that rule the roost.

AI-powered robots are no longer novelties but change-makers, especially when it comes to hotel customer service. Take for instance Hilton's AI concierge, "Connie," powered by IBM's Watson to interact with guests on everything from local recommendations to hotel amenities. The likes of Connie are the future of guest service-enabling seamless, around-the-clock support for hotels without adding to the staff overhead.

The Japanese Henn-na Hotel has also broken some sort of record with front desk reception by robots, handling automated check-ins and check-outs, with customer inquiries included. 

These AI robots learn something new in every interaction, and thus turn out to be more efficient with time. With these developments, it could be projected that the adoption of AI in hospitality may rise as high as 30% in guest satisfaction by 2025. 

From this perspective, large potential may be envisioned for the concierge robots to really upgrade the experiences of guests.

Artificial Intelligence-driven automation makes hospitality operations seamless. Already, hotels embraced AI for optimizing housekeeping schedules, managing inventory, and monitoring energy consumption. For instance, self-service check-in kiosks accelerate the process of arrival while AI assists in smoothly monitoring the availability of rooms and guest preferences.

According to IATA, there will be 7.2 billion passengers in transit annually by 2035, hence straining operational efficiency in hospitality. By automating, hotels reduce waiting time and thus make more efficient use of their resources toward boosting guest satisfaction, which helps drive loyalty and revenues.

The travel and airline industry has already witnessed an increase in the adoption of AI-driven chatbots. The latest Air Transport IT Insights finds that the adoption of AI will continue to increase: airlines (76%) and airports (68%) are planning major programs, or R&D, for AI by 2025. 

As of 2024, 42% of airports have already done so. They range from answering simple FAQs to hotel reservations. They provide instant support, day in and day out, while freeing human agents for more complex requests.

AI-powered chatbots also learn and evolve from user interaction. For example, they may suggest to guests trips and room upgrades or even help them edit the booking according to the history of the guests. Since the bots are constantly learning, over time, they get better and their responses are more accurate and relevant for improving guest satisfaction.

This feedback is immense for the guests, but hard and complicated to handle on all these platforms. AI systems can sift through thousands of online reviews, social media posts, and direct feedback for actionable insights in customer sentiment. 

As a matter of fact, AI-powered sentiment analysis tools let hotels identify common pain points and go all the way in taking proactive measures in that direction.

For example, AI analyzes patterns in the reviews left by guests, such as persistent complaints about cleanliness in rooms or noise, to which management can take appropriate action. 

With 82% of consumers taking a hotel review into consideration while making a booking, the use of AI in improving services with the help of guest feedback is no longer optional but a must-have.

AI has transformed the whole trend of demanding price through analysis. Predictive analytics helps in running the regular rate adjustments corresponding to the seasonality, events, and local market trends. This makes it crucial for hotels in their revenue maximization plans, more so as fluctuating demand faced by the industry.

Due to dynamic pricing, hotels can increase revenues by as much as 20% with the help of AI-powered pricing tools.

This is because, in hotels, AI algorithms dynamically adjust the rates of the rooms in real time to maximize demand and profitability; hence, hotels can achieve optimal occupancy without having to sacrifice rates even during peak seasons.

It's not an investment in AI for the hospitality industry, but a prerequisite to operate. Be it robot concierges or predictive pricing, AI is that differentiator which shall grant personalized, efficient, and data-driven services. 

Industry Challenge: AI adoption is accelerating, and for the industry leaders, the question is no longer *if* they should adopt AI but rather *how fast* they can put AI into operation. 

So where does your organization fall in this landscape of AI? Let's dive deeper into the future of AI in hospitality and what comes next.