AI in Hospitality: Insights from HSMAI Europe’s Think Tank

From new business models and user interfaces to the impact of AI on talent and culture strategy and search engines, hospitality leaders from the association’s membership identify challenges and opportunities in the today’s fast-changing AI era

The HSMAI Europe ‘AI in Hospitality’ Think Tank, moderated by Josje van Dongen, Head of Innovation & Programme Specialisations at Hotel Management School Maastricht and HSMAI Europe Board of Directors member, brought together hospitality leaders from the association’s membership to discuss the threats, challenges, risks, and opportunities presented by AI. The discussion, which followed a presentation by AI expert Terrell (Terry Jones), was inspired and guided by some of key points he made.

Leaders were split into Think Tank focus groups and covered AI-driven topics such as new business models designed to disrupt and innovate; how to evolve the user interface; the impact on talent, including recruitment, retention, training, leadership and company culture; security, responsibility and ethics; and how will changes in search engines apply, with emphasis on competition from OTAs, which are already adopting AI models.

Here are the comprehensive insights and common themes from the discussions:

OPPORTUNITIES AND BENEFITS

1. Personalisation and enhanced guest experience

• • Website personalisation: AI can significantly improve website personalisation. leading to higher guest satisfaction. Personalising content, imagery, and recommendations based on previous behaviour, preferences and importantly, consumer intent, can enhance the user experience and drive direct bookings. Without personalisation, hotels risk losing business to OTAs.

• • Dynamic imagery and interactive content: Ensuring that website imagery is dynamic, interactive, and relevant can capture guests’ attention and provide a more engaging experience. AI can track visitor behaviour to continuously update and refine content. This includes making sure images and recommendations evolve with user interactions – and again, their intentions to travel/stay.

• • Language translation and concierge services: By using AI-driven language translation tools, hotels can more effectively cater to a global audience, breaking language barriers and offering personalised itinerary suggestions, thus improving the overall guest experience. Concierge services can be more personal and tailored to individual guest needs when AI is integrated.

2. Marketing and advertising

• • Targeted marketing campaigns: AI has the power to create self-optimising campaigns that adjust based on performance data. This can lead to more effective advertising and higher conversion rates. Campaign speed-to-market can be greatly increased, allowing for rapid response to market conditions.

• • Content distribution: Using AI to distribute personalised content across various channels was highlighted as a key benefit, ensuring that the right message reaches the right audience at the right time. It can also help overcome language barriers, making marketing more effective globally.

• • Experiential imagery: AI can help shift from static hotel imagery to more experiential and people-inclusive content, making marketing more engaging and effective.

3. Data utilisation and insights

• • Combining data sources: By integrating public, industry, and corporate data, AI can provide powerful insights that drive better decision-making. This can help hoteliers understand market trends, guest preferences, and operational efficiencies. AI can turn vast data into actionable knowledge, making it a valuable asset.

• • Enhanced decision making: AI can process vast amounts of data to provide actionable insights, helping hoteliers make informed decisions about pricing, inventory management, and guest services. This can involve understanding complex patterns in guest behaviour and preferences.

4. Operational efficiency

• • Automation of manual tasks: Empowering talent, AI can automate routine tasks such as payment reconciliation, guest inquiries, and booking management, freeing up staff to focus on more strategic activities. This can significantly improve efficiency and productivity; it just needs to be explained – and taught – to team members at corporate and hotel level.

• • Cost and resource control: By leveraging AI to optimise resource allocation, costs are reduced and operational efficiencies increased. One group gave the example of AI being used to analyse food waste patterns to optimise menu planning and reduce excess. It can also aid in managing energy usage, contributing to sustainability efforts and aligning with ESG policies.

 

CHALLENGES AND RISKS

1. Security and ethics

• • Data privacy and security: Concerns about data privacy and security are paramount. Hoteliers must ensure that AI systems comply with regulations and protect guest information from breaches. The ethical use of AI, including avoiding biases and ensuring transparency, is critical to maintaining trust with guests and employees.

• • Ethical considerations: AI systems must be designed to avoid biases and ensure fair treatment of all users. Transparent AI processes can help build and maintain trust.

2. Integration and investment

• • Technology integration: Integrating AI with existing systems can be challenging, especially when dealing with multiple property management systems (PMS) and customer relationship management (CRM) systems. Ensuring seamless integration is key to leveraging AI’s full potential. Overcoming silos in data across multiple technologies and systems is crucial for effective AI implementation.

• • Investment limitations: Smaller hotel chains and independent properties may struggle with the investment required to implement advanced AI solutions. Collaborative efforts and partnerships with tech providers can help mitigate this challenge. Hotels may need to influence suppliers to ensure the technology meets their needs and can be integrated effectively.

3. Training and competence

• • Upskilling staff: As AI becomes more prevalent, it is essential to train talent on new technologies and processes. Upskilling employees can help them adapt to changing roles and responsibilities, ensuring they can effectively utilise AI tools. Training should also focus on the benefits of AI in terms of efficiency and productivity improvements, empowering them to focus on “what they love about their job”, which is more often than not, the people or guest element.

• • Leadership and culture: Building a culture that embraces innovation and continuous learning will be crucial for successful AI adoption. Leaders must champion AI initiatives and foster an environment of experimentation and growth. Overcoming fears and misconceptions about AI through education and clear communication of its benefits is essential.

4. Recruitment and retention

• • AI in recruitment: AI has a role to play in streamlining recruitment processes by analysing personality profiles and skill sets to match candidates with the right roles. This can help hotels find and retain talent more effectively. AI can also assist in creating structured interview processes and identifying candidate strengths and weaknesses.

• • Training and development: With training and development key to tackling talent retention issues, AI can step in. It can be used for gamified training and simulations to enhance team skills and performance; and add an element of fun to these tasks. Understanding team strengths and weaknesses through AI-driven data can help in targeted upskilling and career development.

 

FUTURE DIRECTIONS AND STRATEGIES

1. New business models and innovation

• • Disruptive business models: AI presents opportunities to develop new business models that disrupt traditional practices. The hotel industry should start exploring innovative ways to leverage AI for competitive advantage, such as personalised guest experiences and dynamic pricing strategies.

• • AI-driven customer service: Implementing AI in customer service, such as chatbots and virtual concierges, can enhance guest interactions and provide timely assistance, improving overall satisfaction.

2. Addressing fears and misconceptions

• • Education and communication: To overcome fears about AI, it is essential to educate staff and stakeholders about its benefits and potential. Clear communication about how AI can improve efficiency and productivity can help alleviate concerns.

• • Demonstrating value: Highlighting successful case studies and tangible benefits can demonstrate the value of AI, encouraging wider adoption within an organisation.

3. Regulatory and ethical frameworks

• • Supporting regulation: While advocating for the benefits of AI, hoteliers must also support regulatory efforts to ensure ethical use and protection of data. Proactive engagement with policymakers can help shape regulations that support innovation while safeguarding interests.

 

SUMMARY

The HSMAI Europe ‘AI in Hospitality’ Think Tank highlighted the transformative potential of AI in the hospitality industry. By embracing AI, hoteliers can enhance guest experiences, optimise operations, and gain a competitive edge. However, addressing challenges such as security, integration, and training is crucial for successful implementation. The future of hospitality lies in leveraging AI to build smarter, more personalised, and efficient services, ensuring sustained growth and innovation.