Adopt AI or fall behind
AI guru Terrell Jones urges hotel industry to embrace change, leverage data and understand consumer intent, at HSMAI Europe’s ‘ AI in Hospitality’ Think Tank event.
AI is here to stay, but how can the hospitality sector capitalise on a technology it barely understands? This was the focus at the HSMAI Europe ‘AI in Hospitality’ Think Tank in London where top industry professionals discussed AI’s challenges and opportunities.
AI expert Terrell (Terry) Jones, President of ON Inc., chair of Amgine.ai, and a pioneer in e-commerce travel with Travelocity and Kayak, emphasised the urgent need for the hospitality industry to embrace change, leverage data, and understand consumer intent. His insights provided HSMAI Europe members with invaluable guidance for navigating the rapidly evolving AI landscape.
The necessity of embracing change
Terry opened his presentation with a cautionary tale from seven years ago about a limousine company owner who failed to adapt to technological advancements. Despite being advised to update his website with online pricing, booking options, and mobile compatibility, the owner resisted change and ultimately went bankrupt. Quoting Ernest Hemingway, Terry highlighted how businesses can fail “gradually, then suddenly”, emphasising the importance of being open to change and not clinging to outdated practices.
Why AI now?
The presentation delved into the rise of Large Language Models (LLM) and the transformative power of AI. Terry noted that tools previously unavailable are now accessible, enabling hospitality businesses to develop custom AI products. With 13 million people using GPT, the shift from seeking answers via Google to obtaining advice through AI signifies a paradigm shift. AI’s ability to learn and evolve makes it a gamechanger, as exemplified, he said, by Tesla’s fleet of self-driving cars that collectively benefit from shared experiences – good and bad.
Leveraging data
Terry underscored that while hospitality companies possess vast amounts of data, it often remains underutilised. “Data isn’t knowledge unless you have a way to process and use it,” he said. He likened databases to “data swamps”, stressing the need for refining data to derive actionable insights. Drawing an analogy to oil refining, he explained that data becomes valuable when processed effectively. By combining public, industry, and corporate data, hotel businesses can gain powerful insights, ask more complex questions, and make informed decisions.
He cited Marriott’s extensive but underleveraged data on the facilities it offers as an example. “The hotel company operates the most spas, golf courses and three-star restaurants in the world,” he noted, “but no one knows”, because it [Marriott] doesn’t show that anywhere and therefore can’t answer that question if it is searched or asked for. He therefore urged hotels to create new services powered by AI that will “help the consumer do something they could not do before?”
Understanding consumer intent
One of the most critical aspects Terry highlighted was the importance of understanding consumer intent. Improving the user interface (UI) through AI can significantly enhance the customer experience. He cited Uber’s disruption of the traditional limousine model as an example of how simplifying the customer interface can revolutionise a business.
Knowing not just ‘where’ customers are going, but for what purpose they are visiting, will enable hotels to tailor their offerings and increase conversion rates. Richer input leads to richer output and understanding consumer intent can turn potential customers into loyal patrons, he noted.
Collecting data on intent would also empower hotels to sell ancillaries, which is currently an industry weak spot, better addressed by OTAs and airlines, for example, he added.
The urgency of adopting AI
Terry emphasised the urgent need for the hospitality industry to adopt AI or risk being outpaced by Online Travel Agencies (OTAs). “They [OTAs] will jump in if you don’t take the lead,” he said. “You don’t have to change everything – start with a text-based filter and summaries.”
He provided examples of what other companies were doing to improve customer service and streamline processes – Amazon is summarising reviews, for example, and Kayak is asking customers to take and send a photo of a cheaper quote from another site so it can beat the price.
As another example, the company Terry chairs, Amgine, automates group travel bookings for TMCs made on email. It automatically checks everything, including travel policy and personal preference and integrates with Cvent.
Terry therefore advocated for adopting new business models and utilising AI to identify and eliminate friction points in the customer journey: “Maybe you are not easy? Can you use AI to become easy? What is your new model? Play to your strength.”
He stressed the importance of understanding that AI is here to stay and businesses must adapt to thrive, using the analogy of Kodak’s downfall and Instagram’s rise to illustrate the inevitability of technological disruption.
Practical steps for AI integration
Terry’s presentation outlined several practical steps for integrating AI into hospitality operations:
- Get your data right: Ensure data is accurate and well-organised.
- Think beyond technology: Focus on how AI can enhance business processes and customer experiences.
- Upskill your team: Equip staff with the necessary skills and knowledge to work with AI tools.
- Start considering use cases: Identify potential applications of AI within your business.
- Experiment: Embrace a culture of experimentation and innovation.
Innovation over disruption
Terry rounded off his presentation urging the hospitality industry to continuously innovate rather than merely disrupt. By embracing AI and leveraging existing data, businesses can reimagine their services and maintain a competitive edge. The next 25 years will be defined by those who build smarter solutions, not just cheaper ones, he said.
Terry’s insights provided a roadmap for senior hospitality professionals to harness AI, encouraging them to buy the tools, take risks, make faster decisions, and remain open to change for a prosperous future. As another powerful example, he said: “The Apple watch is now bigger than entire Swiss watch industry,” he said. “Why? Because it had clarity and unending focus and that’s what you do with AI.”
And his final message? “It’s about not being disruptive. It is about innovating heavily. It might be disruptive to others, but not to you. If you keep innovating, you have a shot, rather than have someone come and eat your lunch.”
