What would be the impact of generative AI like ChatGPT on hospitality?

Heated debates surround the topic of generative AI as new technologies, including ChatGPT and Google's Bard, rise in popularity. AI offers both pros and cons; Gitnux estimates AI will replace 85 million jobs by 2025 but create 97 million new jobs.  

Chatbots and virtual assistants enhance guest interaction in real-time with personalised assistance; Predictive analytics forecast market behaviour, allowing data-driven decisions. Other areas that can be optimised with AI include rate and yield management, procurement, security and threat analysis and maintenance predictions.  

AI-based physical training programs with personal performance feedback and DNA-based wellness that offer curated nutrition plans are revolutionising the leisure and wellness sectors.  

I believe, the impact of generative AI on the hospitality industry is still largely unknown, but brands must realise that complete reliance on AI is never adequate. Joining technology-trained employees with AI tools can help brands stay ahead with an equilibrium of automation and human intellect.  

There are some important factors to consider as we navigate into an AI-lead operating model. AI does not change the problems that individuals and businesses face, but rather, it is a new way to help solve those same problems. AI will not generate revenue for a hotel. It will provide ways to increase revenue, just like the internet enabled existing revenue sources to access a hotel faster and more directly.

If the internet revolution took 15 years to fully establish itself, this next revolution will take hold even faster. Technology enables technology and so each wave will be faster than the previous. In reality, AI is already all around us and has been with us for the last 5-10 years. What we’re seeing now is AI’s ‘Amazon’ moment with the availability of a mass-market “killer app” (ChatGPT) and technology that is mature enough to be used by anyone. If you think we’re only at year 0 of the AI revolution, you’re wrong.

There are three impacts major impacts AI will have on hotel tech, including large language model (LLM) based products, that go beyond business intelligence and what we think of AI, today: guests, operators, and vendor operations.

I want to recall an old quote (F.Gonzalez BBVA CEO in 2015 about the Bank as a future software companies) but updated to this moment: "Your Company will be a Machine Learning Company, or won't be."

Many of us have been working with Machine Learning/AI Algorithms (call AI If you have your marketing mode active) in last years. We know the benefits and how powerful this technology is to boost and drive results to our companies. However we were not expecting the ChatGPT advent. 

I really believe we are living an inflection point. The Massive Language Models are not only a topic discussed among Tech Savvy people, now is a mainstream in our Society. Everybody knows about ChatGPT, Midjoruney, MusicML. ML is here and will be ubiquitous in our business and society.  

For years we have been gathering Data for our companies, defining of Data process, feeding Data Lakes. Now is time to get the real value of these data.    

From this moment on, coming to the first quote, all the companies that won't start the race to develop, buy, implement y take advantage of the machine learning algorithms will run the risk to won't exist anymore.   

Making a tool like ChatGPT widely accessible to the public has helped to remove some of the mystique surrounding AI. We can already see many areas where AI is benefitting hospitality; streamlining operations, personalisation and revenue increases through data-driven decisions. However there are limits to its function and ultimately personal recommendations drive exceptional customer expereinces.

The full impact of generative AI on the hospitality industry is still unknown, but it's clear that it has the potential to disrupt the status quo. The biggest winners will be the guests, as their experiences could improve drastically across the entire travel journey.

Hoteliers that successfully integrate and leverage their data through AI will be best positioned to provide accurate, relevant recommendations, resulting in unparalleled guest experiences. For example, generative AI can better help hotels determine what attributes a visitor values most, at what price, and at which point in their journey they are most likely to upgrade or request services. Training the AI on property-specific information like inventory, pricing, and availability with historical guest interaction data from a cloud-based PMS could help generate timely guest offers and increase upselling revenue significantly.

Utilizing generative AI to better understand a guest's journey can help staff prioritize and focus on more complex requests. A conversational ML-based chatbot with access to all of this real-time data can also reduce labor and training needs, enabling staff to get out from behind the check-in counter and engage guests across the property.

Many questions and challenges remain to be solved before generative AI becomes mainstream, including security, data privacy, and regulations. But regardless of how generative AI is received in the industry, the first step for hoteliers remains their transition to the cloud.

With the roll-out of ChatGPT plugins, we are already experiencing firsthand how generative AI can assemble essential workflows impacting front and back of house operations.

Hoteliers can unlock a vast range of use cases, such as guest-facing chatbots, developer efficiencies, and business intelligence. However, to fully capitalise on these opportunities, hoteliers must have the right technical infrastructure in place. Platform-centric property management - or customer relationship, content management, etc. - built on MACH architecture is a prerequisite to leverage the limitless opportunities offered by generative AI. An API-first infrastructure that emphasises modularity and is fully accessible via APIs makes all relevant functionality available to generative AI.

With the ability to translate natural language to technical requests, hotel managers can now interact with APIs seamlessly through ChatGPT. Generative AI can analyse data sets and provide immediate answers to KPIs, such as occupancy, enabling managers to optimise their staff on-shift schedules and boost profitability, all thanks to an on-demand & quick access to their business data via chat.

The emerging application of generative AI tools proves how composable technology is laying the foundation for embracing and executing on digital advancements, creating meaningful guest and staff experiences in the hospitality industry.

Over the past few years, hotels and resorts have had to adapt to doing more with less, which has only been compounded by the ongoing staffing issues ushered in during the pandemic. By introducing the right kind of AI, the hospitality industry can increase customer satisfaction and bypass labor shortages by turning to chatbots to handle time-consuming tasks like answering guest questions on your website and utilizing AI to support in-person call center teams. The goal is not to replace jobs, but enable an automated solution that can handle basic tasks, allowing your in-person staff to more effectively manage their time and create a better guest experience.

In the summer 2022, Cendyn launched an AI Call Center integration in coordination with Poly AI that enables hotel properties to reduce call wait times and handle new bookings – even for loyalty members. With the ability to look up loyalty member information, converse with guests in multiple languages, and handle large volumes of calls simultaneously, the program significantly reduced wait times while also allowing the live reps to give their full, undivided attention to more complex reservations. AI chatbots can also help free-up frontline staff by being able to answer basic questions on your hotel website, such as what time the pool opens, if the hotel restaurant offers Sunday Brunch, and so on. The ability to have conversational AI available 24 hours a day can also help with fulfilling after-hours requests, providing support during unpopular shifts with high staff turnover.

Another significant advantage is the ability for AI and ChatGPT to evolve past simple chatbot functionality and "democratize" access to not just hotel information, but private concierge offerings that are not usually accessible at scale. From booking tee times and making local restaurant recommendations or reservations to setting up spa appointments, guests can enjoy an elevated level of service without putting any additional pressure or time constraints on your staff.

We are already seeing the benefits of incorporating AI and hospitality, including potential solutions for persistent industry issues such as staff shortages and training. As additional conversational AI solutions come to market for call center reservations, housekeeping requests, and other areas, hospitality personnel can spend less time on tedious tasks and provide the personalized and engaging on-property experiences that lead to increased guest satisfaction and long-term loyalty.

Generative AI will create a silent revolution in the hospitality industry. In short, generative AI epitomises intelligent automation and will make the work of hospitality managers and employees more effective and efficient. It will give them back control of the creative part of the hospitality business which is often outsourced to marketing agencies and consultants, or it is neglected due to overload with operational work. 

On jobs and tasks levels, generative AI will have enhancement, substitution and transformational effects. Through the enhancement effect, generative AI allows hospitality companies to perform more tasks or serve more customers with the same number of employees. Through the substitution effect, generative AI makes some human employees redundant, because their work is implemented by the AI. The transformational effect relates to the changes in the nature of work of human employees due to the use of generative AI. All three effects happen simultaneously and the balance between them depends on the composition of the specific tasks that form a job position and their automatability. In general, hospitality employees who do not use AI will be replaced by fewer hospitality employees that use AI.

OpenAI has the potential to significantly transform the use of artificial intelligence across industries, including hospitality. With the emergence of ChatGPT and other OpenAI technologies, even small hotels can finally leverage AI's power to enhance their operations and guest experience.

In the hospitality industry, OpenAI can, for example, democratize the adoption of revenue management systems, making them accessible even to small hotels that may not have the resources to develop their own proprietary systems or connect with expensive vendors. By connecting their PMSs to OpenAI, hotels can leverage ChatGPT's natural language processing capabilities to receive distribution and rate suggestions in real-time.

In addition, OpenAI can help hotels with copywriting, social media management, and personalized messaging for guests. With ChatGPT's language generation abilities, hotels can create compelling copy for their websites and social media channels, saving time and resources. Furthermore, OpenAI can assist hotels in tailoring messages for individual guests, providing an ad personam experience that can lead to improved guest satisfaction and loyalty, resulting in increased revenue.

Overall, OpenAI's technology has the potential to significantly enhance the use of artificial intelligence in the hospitality industry and beyond. 

 [PS: this viewpoint was co-written by ChatGPT 4.0]

As is often said, we overestimate the impact of a new technology in the short-term, but underestimate its impact in the long-term. In this case, however, enough AI thought leaders have been preaching for over a decade just how earth-shattering GANs, strong AI and even AGI will be for human civilization that we may not in fact be underestimating what these technologies will be capable of doing for our industry.

In short, AI will change everything, and yet it will change nothing. Travel and hospitality have always really been about experiences, memories, connections, sensations, catharsis and transformation. That part is immutable. But where AI will help immensely is in process automation to thereby activate new layers of service customization and personalization. This is all the stuff that guests want immediate answers for or that business workers don't deem as fulfilling or creative work. 

Yet while the AI use cases for travel, tourism and hotels are legion, many organizations in this sector are traditionally slow to adapt. This time is also different, however, because the 'technological displacement' will happen so fast that many companies will be left in the dust by newer AI-lubricated competitors. Start implementing AI right now!

International travellers struggle to communicate in languages and cultures not native to them. Similarly, hotel staff find it hard to understand or serve their guests in foreign languages. At Hudini, we have invested in technologies that allow hotels to bridge these differences through conversational interfaces. Many hotels are apprehensive of adopting automated chat bots for the fear that conversations get impersonal. With Genegrative AI, automated experiences can now be more personal and human-like and this, I believe, this is going to have a transformative effect in areas of guest communication and service interactions.

The new AI-powered GPT models are so new that we are all still exploring the possibilities. It's too early to see who will win/lose. One of the main assumptions is that you need a lot of resources to implement GPT, so bigger companies would win, but I think it's actually the opposite: creating the AI technology is very hard and expensive, but using it is very easy and cheap, and multiple providers will offer it to you at a very low rate. Anyone will be able to have a chatbot powered by GPT, for example.

If anything, this is an example of a deflationary technology: it makes the cost of things go down, not up. It levels the playing field if we all fight with the same tools. So the impact will be powerful in some areas, like trip planning, but smaller in others, like user acquisition and booking, where the tough thing is not to create content or answer questions, but to capture the interest of the guests and simplify their booking process.

Short term I would expect more of the "menu bot" type systems, since they are easiest to plug into existing technology. Longer term, I would expect conversational AI to provide an alternative interactive platform for guests, which could be any of the following:

• 24/7 multi-lingual AI receptionist or concierge (supporting text, voice and video interactions)
• Housekeeping/Customer Services (request a new towel etc)
• In-room digital assistant (similar to Alexa type interactions where guests ask for availability for Spa session and then make the booking)

Plenty of other applications also.

Regards winners and losers - ultimately the guest but before that they may get stuck in a bot nightmare when all they want is to speak to a human.

Traditionally, hospitality procurement is focused on cost reduction – but more recently focused on revenue maximization. As hospitality procurement becomes more strategic with the help of AI, procurement teams can unlock a 360-degree view of suppliers, products, and industry trends that paves the way to more strategic decision-making and partnerships. AI is here and here to stay, giving the hospitality industry a critical face-lift by providing tools for process transformation. Over the next few years, AI's disruption into the procurement world will help streamline processes, improve decision-making, and enhance relationships with suppliers.

In the same way that the rise of the technology is impacting all industries, it is also impacting all of the sub-functions of business. From sales to finance, plant & facility.

It is through this breadth of mechanism that the industry will gain value from the capability. Generative AI will arrive on the back of usage or adoption of existing and new technology platforms that serve the various business functions. As has been the case with any of the previous shifts in technology. For example, mobility, ecommerce, big data and cloud to cite a few.

Conversely, the industry has been traditionally wary of adoption of revenue technology, and it follows, AI. Mainly because industry has been reticent to trust technology over their instincts and experience. 

Everyone wins as the ability to communicate in a more human manner with technology in the leveraging of information will increase the overall value of information and technology generally.

Ultimately the manner of adoption of techology remains a very human decision. If the warnings of decimation that come with this capability are true, then it is the hospitality professionals that make our industry hospitality that stand to lose.

No hospitality professionals = no hospitality.

Let’s sift through all the hype around generative AI like ChatGPT. Here is what ChatGPT isn’t:

• Not an OTA slayer.
• Not a Google replacer
• Not a smart employee’s replacer. AI won’t replace you. Someone skilled in AI will.

What ChatGPT is:

The recent “interview” between HFTP CEO Frank Wolfe and ChatGPT itself is the most accurate prognosis for the impact of ChatGPT on hospitality! ChatGPT itself defined the following uses in hospitality and travel: enhanced chatbots for the hotel website to handle trip planning and customer service, virtual assistants, content translations, marketing and website copywriting.

In addition to language translation of travel and hotel website content, I see a huge role of generative AI in the Planning Phase of the Digital Customer Journey.

The OTAs have already implemented plug-ins to ChatGPT (Expedia, Trip, Kayak) to provide pricing and booking capabilities to ChatGPT’s trip planning functionality. In the same time, Expedia and Trip have integrated ChatGPT into the chatbots on their websites to enable itinerary building/trip planning capabilities. Adding AI as a planning tool helps significantly the OTAs to shortcut the digital customer journey and almost immediately transport travelers from the Planning to the Booking Phase of the customer journey.

The OTAs are well prepared to make bookable any AI-suggested itinerary with their 2.5 million multi room accommodation establishments, 6 million vacation rentals, 500 airlines, 250,000 local experiences, etc.

This capability alone will increase dramatically the dominance of the OTAs and makes them the ultimate winners in my book.

In the hospitality sector, AI will make guest assistance and conversations more efficient. It will help respond to emails and written inquiries from guests, and assist with concierge-related questions, making it easier for hotels to offer such services. Guests might even prefer asking AI instead of a concierge. AI could significantly change how hotels are found and ranked, including on online travel agencies, making past ranking optimization efforts less relevant. Reviews might also become less crucial for rankings, as AI can personalize responses better.

The most significant impact may be on the distribution side, as AI has the potential to revolutionize how we search for and book hotels.

Regarding operations, changes might take time, but most systems will eventually incorporate text-based commands, making it simpler for hotel staff to interact with technology and support their tasks. For example, asking the computer to check-in a guest and verify previous stays for necessary legal documents will make guests feel more welcome.

Although AI is an incredibly powerful tool, in the hospitality industry, due to the nature of the industry it will mostly be a powerful crutch to support existing actions. 

Great subject!  First we must all realize that artificial general intelligence (AGI) is advancing at such a rate that any of our answers could be sunset within a week.  Our industry is already being depersonalized at the guest service level with pre-checkin, kiosks, and more. 

Your question refers to OTA's - and AI will surely reduce the dependence upon any intermediaries at any stage in the guest journey, greatly helping brand direct bookings and honored guest programs.  But we as an industry have a long way to go to solve the problem of home to property and return,  which AI will advance quickly with automated connections to car services, airlines, hotels and return. 

Within the property, AGI applications will surely eliminate many steps and people in accounting, middle management, and data analysis.  There will be a period of disrption as there is in any technology revolution, where retraining is required to reposition displaced personnel in our case into prompt experts, robotics managers, and more individualized guest service managers. Can't wait!