Bernadette Versfeld | Partner | Webber Wentzel | mail me |
Global tourism has begun surpassing its pre-COVID-19 peak. South Africa remains a popular tourist destination with the hospitality sector contributing significantly to its gross domestic product (GDP).
Competition in the hospitality industry is intensifying, making the marginal and not-so-marginal gains offered by Artificial Intelligence (AI) a vital consideration for any hospitality operator.
The sector is in a prime position to capitalise because it sits on one of AI’s most important resources: data. Hotels can gather large amounts of data because their guests are always generating information: when they typically order room service, how often they leave their room, favoured departure times, their spending profile, how clean their rooms are, and so on. AI is opening new worlds of efficiency for hospitality providers enriched by the pictures their guests paint through their day-to-day habits.
Opportunities for hospitality operators in the age of AI
There are numerous ways AI can support hospitality operators in improving the quality of their service. Given AI’s wide breadth of influence, it is useful to consider its potential in the hospitality industry in two broad categories: customer experience and automation as well as environmental, social and governance (ESG).
Customer experience and automation
Customer experience entails the full guest experience, such as safety and security, communications, service quality, cleanliness, reservations, dining, and amenities.
AI can offer operators and guests increased security by using technologies such as facial recognition, biometric locks, and airport transfers driven by real-time flight times versus airline schedules. The check-in process can also be improved through adaptive, proactive systems that recognise repeat guests with a long track record of facility use.
Reservation systems supported by AI can offer guests dynamic pricing based on demand. Chatbots can service customer queries any time of the day or week, logging critical information for use the next time a guest checks in. The increased use of robots and automated tools can lead to fewer staff being needed to clean a floor or room, thus improving security and reducing overheads. Favoured meals will always be in stock through smart food storage and procurement.
Environmental, Social and Governance considerations
Hospitality providers can consume a significant amount of power. They often operate 24 hours a day, and guests are less careful regarding energy consumption than at home. They tend to leave the water running for longer and the air conditioning and lights on. Energy is wasted with negative consequences for the environment, driving operating costs up.
AI is already playing a major role in reducing energy wastage. When a guest leaves a room, smart energy management systems that leverage guest and hotel data can automatically switch off lights and systems, such as air conditioning.
Challenges of using AI in the hospitality sector
AI poses serious challenges and risks that need to be carefully considered and managed for hospitality operators to benefit from the opportunities and gains.
Data privacy
The greatest challenge any organisation grapples with when using AI is data privacy. In South Africa, the Protection of Personal Information (POPI) Act plays a central role in regulating how private data is interacted with by private and public actors.
If hospitality providers intend to use private data for commercial purposes, it is imperative that the agreements and waivers signed by guests giving providers permission to do so are legally sound and all-encompassing.
Furthermore, each legal jurisdiction applies different regulations to how private and public entities can treat and interact with private data. A hospitality operator may be compliant in one jurisdiction but non-compliant in another.
Liability
Where AI is concerned, South African law currently has no provisions within its legal framework that specifically address AI or contexts where AI is used.
In a practical sense, for example, that lack of a safety net means that when new employees are onboarded into the organisation, significant thought and care must be given to how employment contracts address the subject of AI and the use of AI tools.
For example, suppose an employee uses an AI tool to manage a hotel’s kitchen inventory. Where does liability lie if an allergen sneaks in and a guest consumes it? Is the employee, hotel, or AI program supplier responsible?
Intellectual property
For hospitality operators, intellectual property (IP) may not be among their chief concerns when using AI tools, but it is critical to keep abreast of IP implications.
For example, if an employee uses an AI tool to craft a marketing campaign, immediate questions can be raised about the original source of the idea, the framework used to execute it, and whether in fact a third party owns it and its use results in an IP infringement and damages. Updating IP policies to deal with the adoption of AI is imperative.
AI has opened new ways to do business in the hospitality sector. Customer experiences can be enhanced, operating costs lowered, and carbon emissions significantly reduced. The opportunities presented by AI are self-evident, but care is advised when leveraging its talents.
Related FAQs: Artificial Intelligence and the Hospitality Industry
Q: What is the role of Artificial Intelligence in the hospitality industry?
A: Artificial Intelligence is used in the hospitality industry to enhance guest experiences, optimise revenue management, streamline hotel operations and improve overall customer service.
Q: How can AI benefit hotels and resorts?
A: AI technologies can help hotels leverage guest data to personalise experiences, optimise inventory management and predict market trends to enhance guest satisfaction and increase revenue.
Q: What are some AI tools commonly used in the hospitality business?
A: AI tools such as AI chatbots, revenue management systems powered by AI and generative AI solutions are commonly used in the hospitality industry to enhance operations and guest experiences.
Q: How does AI revolutionise hotel management?
A: AI enables hotels to automate repetitive tasks, improve decision-making processes, and enhance the efficiency of hotel staff, ultimately leading to better service and guest experiences.
Q: What is the future of AI in the hospitality industry?
A: The future of AI in the hospitality industry lies in its ability to further enhance hotel operations, provide personalised guest services and offer advanced AI solutions to optimise various aspects of the business.
Q: How can AI be used to enhance the guest experience in hotels?
A: AI can be used to analyse guest preferences, offer personalised recommendations, and improve the overall quality of services provided, thereby enhancing the guest experience in hotels.
Q: What are the challenges faced when implementing AI in the hospitality sector?
A: Challenges in implementing AI in the hospitality sector include data security concerns, staff training requirements, integration complexities with existing systems and ensuring a balance between automation and human touch in guest interactions.
