Hospitality will be ‘left behind’ unless it embraces artificial intelligence

Hospitality could be “left behind” if it does not embrace new technology, industry experts have warned.

Shane O’Flaherty, global director of travel, transportation, and hospitality at Microsoft, told the IDeaS Hospitality Revenue Summit in London this week that the industry needed to “move past the legacy systems” and invest in technology.

He said hotel companies were “just starting to dip their toe in the water” and had been “slow to adapt” to the onset of “the most innovative technology since search”: generative artificial intelligence (AI).

Generative AI refers to algorithms such as GPT-3 and DALL-E that can create new written, visual and auditory content after being given a prompt or existing data.

While the retail sector faces the “existential threat of Amazon” and is therefore keen to invest, “hospitality is typically behind all those sectors around the embracement of technology,” O’Flaherty explained.

He added: “When customers arrive at the hotel, beyond the key, there’s no digital experience with the consumer. Generative AI can play into customer experience by fulfilling the actual customer demands and [providing] personalised recommendations.”

Even if hotels are not yet able to integrate generative AI into their portfolio, O’Flaherty stressed the importance of “automating the back office as cleanly as possible”.

“As we move forward and we talk about labour shortages and trying to inspire the younger generation, we have to invest in tech associated with employees and employee experience. Hotel companies invest a lot more consumer-based technology than they have in themselves,” he said.

At a later panel, Andrew Rubinacci, executive vice president of commercial and revenue strategy at Aimbridge Hospitality, told the conference: “If we don’t start embracing AI, we are going to be left behind. People want personalised experiences. We try to [offer that] but we just don’t have the data; as an industry, we are leaving a lot of money on the table.”

He encouraged hoteliers to “target individuals to give them exactly what they want” to encourage guest spending.

Despite the challenges of inflation and labour shortages, Rubinacci urged the industry to “always” invest in new technology.

He added: “We’ve underinvested in technology as long as the industry’s been around, and it’s catching up with us. If we don’t invest, someone will. We can do it and bite the bullet now or we will pay it in commissions going forward.”

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