LONDON — Artificial intelligence is at the forefront of the operations and distribution agendas in the hotel industry, but one question that keeps being raised is whether the sector will take any more advantage of it than it did internet-based distribution 10 to 15 years ago?
At a panel on the subject during the recent Hotel Industry Development Event, hoteliers suggested if urgency was not shown, there is the distinct possibility third-party entities will take control of AI just as they did with online travel agencies all those years ago.
That does not have to be the case, sources said, but there is the argument the industry has not taken the reins in both hands in regard to other IT-based initiatives.
A simple question was raised: Will AI help check-in staff remember a guest stayed in the hotel the month before?
It could be argued that currently many systems are not up to task.
Nikhil Gupta, CEO and co-founder of Brightstar Hospitality Management, which operates 22 hotels, said everyone and every division needs to be up to speed with AI.
“There are people who need pushing. I say, ‘Guys, if we do not do it, someone else will,'” he said. “Hoteliers have to take the initiative, or the OTAs will again steal the march."
Panelists said those inside the sector control the data and how it can be used. AI is an obvious help to the process.
The old adage of garbage in, garbage out is very prescient, said Aoife Roche, vice president of sales, Europe, Middle East and Africa, at STR, CoStar’s hotel-analytics division.
“Our data is not AI-driven. It is researched proprietary information," she said.
Philip von Ditfurth, founder of Apaleo GmbH, said the pain points operators have gone through with previous IT systems do not need to be relived.
“[AI] is a huge step. … You need an open platform,” he said.
IBM describes open platforms as “artificial intelligence systems that can be used, examined, altered and distributed for any purpose, without having to request permission.”
Navneet Bali, founder and CEO of LyvInn, is one hotelier ready to grab the initiative.
As one of the founders of German budget hotel chain Meininger, he said he looked back in anguish at the period when “the hotel industry did not do anything … when we said, we’ll just give it all to the OTAs.”
He said now is a totally different world, where technology allows hoteliers to capture more customer data than ever.
He added AI needs to be treated as though it is an invisible employee that continually answers the central question of how to send value to the bottom line.
“It is easier now for a company like mine that is not legacy. [AI] does things for you. … It organizes data, which is now very disparate,” he said.
Not always a bad thing
STR’s Roche said the industry often views AI in a very negative light, mostly around staffing, but instead it should be seen as an opportunity, especially in distribution.
She pointed to Accor’s launch in late January of its loyalty program, distribution and customer service within a ChatGPT format distinct from the firm’s mobile app.
Gupta said others who are already on board with AI tech will realize profound changes within five years.
Von Ditfurth said AI will facilitate jobs, not replace them, but concerns around the roles humans play, or do not play, are never far from the debate, especially in an industry that prides itself on the human touch.
He said AI distribution platforms are being created at incredible speed, so it is folly to think that change will not happen.
One audience member asked if revenue managers would not be “the lift operators of the 1940s?”
“Human jobs will morph into something different,” Gupta said.
Von Ditfurth said he believed the application piece is at more risk than the revenue management piece; Roche said AI will bridge the gap between data and management decisions; and Gupta added data will bridge all systems, including property management and customer relationship management ones, to the benefit of the P&L.
He said the trick now is to be ready.
“You need to be future-fit,” he said.
That does not mean everyone will be the same.
Bali said he is confident AI can help the industry avoid commoditization and promote personalization.
It might also, panelists said, make brand fees more transparent, with fees moving from percentage-based models to dynamic, performance-driven and value-added ones.
AI could make the overall picture opaquer, allowing hoteliers to truly see from where value derives.
Gupta said, unfortunately, he felt as though many in the industry “completely underestimate the disruption. None of us have our heads around it. We have [to make sense of] it right now.”