First, let’s define AI (artificial intelligence). The term AI is everywhere right now, and it can be very difficult to see the forest through the trees. What is "true" AI and why is it important for hotels?
You often see that systems offering some kind of automation claim it's AI, but automation alone is good, buts its not AI. Automation can however be part of an AI process.
Here’s my definition of AI
AI is a process that can automate some processes and improve with time through self-learning (machine learning) and/or human training. The goal is to automate mundane tasks, create new opportunities or gain actionable insights. (And sometimes take advantage of these opportunities without human intervention). AI should be able to learn from data input and give improved data output next time.
That’s a broad definition, but it can be boiled down to a simple sentence.
AI is an automatic process that can learn by itself and improve based on user input and other connected databases of historic and future data.
For a more in-depth definition of AI, check out Wikipedia: https://en.m.wikipedia.org/wiki/Artificial_intelligence
Why is AI such a big deal right now? Simply because it's much more accessible thanks to faster computers, deep learning API's & big data (a lot of data available).
Hmm... So, what can your hotel do about it?
1. Messaging interface & chatbots
First some compelling statistics.
1 in 5 of your visitors have special or complicated requests they need answers to.
88% of the millennial generation prefer messaging to other forms of communication. Text still dominates, even in the age of live video streams.
The average hotel website has around a 2% conversation rate. 2 percent! Imagine 100 people walking into an unstaffed hotel lobby and only 2 staying. This is your website without messaging.
By adding messaging, you’re upping your level of customer service. Watch conversions grow when customers can interact with you easily.
When planning and booking a trip, 94% of tourists switch between devices.
Outsmart your competitors and offer a seamless way for customers to contact you when they need to. It’s likely that their ﬁrst visit to your website will be on a smartphone.
At Instaroom, we know from own experience that around 40-50% of all conversations are related to new reservations (complicated bookings). The other 50% are related to FAQ's.
How is this related to AI?
Once you have embraced messaging and understand that it's here to stay, the next step is to get some help from the world of AI.
Chatbots can be of great assistance. The first thing is to make sure those 50% of FAQ's are handheld automatically. Not just for the sake of automation but for the sake of improving customer satisfaction and finding new revenue opportunities.
Personalization at scale is suddenly at your fingertip. Imagine a smart agent tapping into the hotel PMS / CRS & and other external databases to pull out information to provide the customer with relevant information in real time. I can imagine this chatbot being mentioned in a Tripadvisor review hehe.
From there the opportunities are endless and can be customized to fit any unique brand, customer journey, or hotel group.
Chatbots will improve with time and thanks to NLU technology (Natural language understanding) the learning curve is steeper than ever.
If you want to talk AI and chatbots we will be at ITB next week. We still have some available slots (ps. we are giving away some free concierge bots)
2. Smart Revenue Management systems
If you still haven’t invested in a smart RM system, it's time to do so. But not necessarily for the reasons you would expect. I love this topic and will probably dedicate a whole chapter to it in my next book.
I will not go into details about what a smart RM system can do for you, but the principles are the same as previously mentioned. A smart RM system can learn by itself and improve based on user input and connected databases of historic and future data. In other words, the output will improve with time. Hence, ever better pricing recommendations.
Now there are a bunch of pricing / yield & rate intelligence systems using AI. You should check these out as well. Just let me know if you need some direction.
So, what is the unexpected reasons to invest in a smart RM system?
Obviously, the smart RM system will help you increase revenues by optimizing pricing and recommendations. I do however think it opens an even greater opportunity and that is for the Revenue Manager to be able to focus on the big revenue related tasks like action-based forecasting, deep analysis, online content improvement & customer journey analysis (this is not yet as easily replaced by AI, but that day will come too).