Artificial Intelligence… Where could and should AI be adopted in our industry?
Artificial intelligence is rapidly moving from the laboratory and into business and consumer applications. The result is a fundamental shift in how software is built, and what it's capable of doing. And while we're still a way off from the artificial general intelligence portrayed in the movies, artificial narrow intelligence is a reality that's already powering some of the most successful technology businesses today, including Amazon, Facebook, Google and Apple.
So… Which areas of the hospitality industry are and will be most suited to implement AI and why? What's your take?
Co-Founder at TRAVHOTECH
Artificial Intelligence is not new to the hospitality industry in the specifics of narrow intelligence. The industry has long had technology capable of providing decision support or executive information around specific and targeted sets of consolidated information. The main example is what we today know as revenue management systems.
The various company's that have provided software solutions for this domain of expertise have combined information about the future, information about the past and then algorithms against this information to determine the future state of reservation and booking behavior to forecast lead time and make pricing recommendations.
Revenue Management technology has been in our market for more than 20 years. Curiously, for a part of the business so fundamental to operational success the adoption of revenue management technology for all its capability has been slow. Many questioning the application of the science, data and the outcome of the algorithms. Great resistance has been faced by industry technology providers. iDeaS recent study on adoption statistics support the phenomena.
I wonder if as a result of the buzz around 'Artificial Intelligence' across technology in general, the road will be smoothed for greater adoption of the tool.
As for the future, decision support can play a part in so many facets of the industry. My top 3 areas of opportunity are;
1. Revenue Management technology will continue their early work and with access to deeper information will apply forecast and pricing optimization across the business, having an impact on all perishable products and services. Eventually to the level of individual pricing for a single guest for a variety of specific or combined products.
2. The stand out opportunity is profile information. Capturing behavioral information about individual guests in relation to personal details and preferences as well as purchasing behavior is also old. The best operators have structured themselves to cater to the guest on an individual level through manual research of information on hand in various systems on and above property. 3 day and pre-arrival review and loyalty operations being manual examples of this effort. The next step will be the automatic analysis and presentation of this information as well as recommendations for personalization. As staffing decreases in operational positions, this capability will be the difference between blanket standard treatment and genuine individual recognition.
3. An area of large cost to industry is supply chain. Today's smart operators adopt integrated supply chain solutions with a direct real-time link to consumption of goods, using transactions and par stock settings to automate the generation of orders. The next step will combine transactional information with buying behavior of mass and individual guests discussed in 2. above to shorten the supply chain, ensure fresher product, more quickly consumed and lower shelf and storage cost of supplies. Overall the guest experience will be improved and the cost of stock on hand will be drastically reduced, eliminating wastage in the supply process, further supporting pricing and profitability described in 1. above.
In general look to the large cost areas and potential for increased profitability as the immediate targets for AI.