NASHVILLE, Tennessee — As artificial intelligence continues to rise in popularity across industries, it becomes increasingly important to understand how the technology works, so hoteliers can make it work for them and their business.
At the Hotel Data Conference's "Plug Into AI" panel, Lisa Targonski, director of commercial services of Elder Research, along with her fellow panelists agreed that the technology is already affecting the global hospitality industry — despite both consumers and industry professionals still widely unfamiliar with how the technology works.
"Ready or not, it's here. People on your staff are using it, even if you think they aren't," Targonski said. "I think the gaps are really about making sure we're asking the right questions, making sure that the data we're using to inform some of these decisions is solid, trusted data, and making sure that that data is interpreted in the right way."
"Really understanding what is behind what AI is spitting out for you can help you decide if you're getting the right information," she added.
The biggest challenge to AI is people — change management and adoption, she said, and Mercedes Blanco, vice president of enterprise growth at Lighthouse, explained that demystifying AI will take both time and effort.
"Where we are today (with AI is) where we were at Google 20 years ago. Now it's very obvious how Google works, but it is not very obvious how AI works," Blanco said. "What we should be doing is to work and prepare our content to be AI-ready, because we need to win this game before somebody else (does)."
Search engine optimization, or SEO, is not the same as AI's generative engine optimization, or GEO. There's a different strategy for each.
John Jimenez, vice president of ecommerce and revenue at Noble Investment Group, doubled down on the Google comparison, but added that Google provides its results fundamentally differently from AI's large language models — and that's still not a completely understood process for users.
"The unknown does create a lot of apprehension, and also bad experiences create apprehension," he said.
Results come down to how the question is asked, and individuals are going to get different, customized responses based on the prompt the LLM received and, in some cases, what it knows about the user. And that user, when it comes time for them to visit a hotel's website to book their stay, is a different user than someone who is visiting from a Google search, he said.
"The SEO customer that comes to your website is exploratory in nature. They want to learn about your hotel, learn about your amenities," Jimenez said. "The GEO customer, the generative optimization customer — they've already done the research in that LLM, (so) they're further along in that decision-making process. And treating them differently has to be something that we have to think about, because they're going to be a growing segment."
Google is still the dominant player, Jimenez said, and, as widespread as AI adoption is, there are still generational components to who is using it, which factors into knowing who's using AI to book their travel with you.
When it comes to pulling back the curtain on the black box that is AI, it's all about data input. Targonski said that one of the biggest mistakes companies integrating AI can make is having "multiple sources of truth." Or, in other words, not having a reliable data infrastructure in place.
"It just gets really expensive if you don't have your ducks in a row before you start doing AI — not that you have to have everything perfect to start that journey," she said. "You don't need to invest tons of money on software and data governance teams and coalitions of people to make decisions, but having an understanding of what you want to do with it."
Not a lot of companies in the travel industry have money to throw around to experiment, she said, so companies need to be strategic.
"What we know about AI today is going to look very different in two weeks and two years," she continued. "So without that strong foundation, you're just always going to be playing catch up instead of really driving your business and putting the focus there."
Even if a company has a solid data infrastructure internally, Charles Oswald, CEO of Aperture Hotels, said there's room for improvement on using AI for forecasting. An LLM could be able to pull in data on a major demand event, recognize a rise in office vacancies, weather disruption and travel reports from airlines.
"I think a key part of what we're missing — in our workflow — is for it to tap into real data in our organization and what we know, ... and tie that into what you see in the marketplace, and then help us produce proper local projections," Oswald said.
Jimenez said an LLM can do exactly this — but in less of a mathematical way than traditional revenue management systems and in more of a relational way.
"Where AI comes in is that it introduces a neural network, which is a different approach and can identify patterns. AI is very good at pattern recognition and specifically non-numerical dimensions, and understanding the relationship between that," he said.
Other opportunities in AI
From AI travel planning to business forecasting, AI has potential to disrupt the greater hospitality industry in numerous ways — including the actual hospitality of it all. On the day of the panel, Jimenez said he was wearing AI-powered glasses that projected a screen with information in front of him. The tool also can live translate other languages, and Blanco said that's another area where AI can help improve. She gave the examples of call centers for bookings or even front desks at hotels as being places prime for AI-powered translation.
"Let's face it, we are never going to remove the human component, but we can absolutely enhance it with AI, and not necessarily at expanding tons of dollars, so I think that is gonna change totally how we are providing service and hospitality," Blanco said.
Another business opportunity is to use AI — and its expertise in personalization — for pricing models.
"We tend to focus too much on selling beds or selling rooms, and we haven't focused enough of who are we selling to," she said, adding that AI can help identify guests who might be likely to upgrade their stays based on some key characteristics.
Also, with the amount of information hotels have on their loyalty members, they can even use AI to help target marketing to them with offers to extend their upcoming stay to get them into their next loyalty status stage.
Internally, Oswald said that there are "a lot of great, practical uses that you can use, that you can implement today that really aren't big, costly changes in the way that we do business." He gave the examples of trend tracking and social media strategy and content planning.