A lot of hoteliers today will feel like they are treading water, grasping for clarity over what kind of impact AI agents will ultimately have on their businesses.
The first observation is that things are developing very quickly. As compared to Moore's law, the pace of next generation AI capablities are developing at a speed that is hard to fathom based upon our species past technical endeavours.
AI Agents are a fundamentally different way to interact with data and knowledge. We are now in the phase of replicating the current status with agents (for example, to build a travel itinerary), like the first TV programs were radio shows with a camera, but pretty quickly we'll evolve to find new ways of doing the same things.
No, most hoteliers are not ready for the new era of personal AI agents. Hotels have historically been cautious about new technology, and for good reason. But AI-driven hotel discovery isn't necessarily about tech adoption. It's about storytelling.AI relies on natural language processing, so hotels should publish blog posts and substantive content that answer traveler queries on their websites.
The term "robot" comes from the Czech word robota, meaning forced labor or drudgery. Introduced by Karel Čapek in his 1920 play R.U.R. and inspired by his brother Josef, the word encapsulated a grim vision of mechanized subjugation. Ironically, a century later, robots have flipped the script: they're no longer merely laborers but liberators, reshaping how industries—from logistics to hospitality—operate.
By 2025, over 85 million existing jobs will be lost due to the seismic shift toward AI, robotization and automation, according to WEF, McKinsey and OECD. Last year labor costs exceeded 1/3 of hotel revenue and AI, robotization and automation are becoming increasingly appealing to hotel owners and operators.
Could we see digital workers comprising half of the hospitality workforce, as they already do at Amazon in this decade? Yes. This model aligns perfectly with the limited and select service layer of the industry. Under such a model I would call it the 'no service' or dormitory management layer.
To thrive in an increasingly digital world, hotels must embrace AI to deliver the highly personalized experiences modern guests demand. However, as with any transformation, it's critical not to put the cart before the horse. Before investing in advanced AI-driven solutions, hotels should first establish a strong, sustainable data foundation—a Central Guest Profile (CGP) that aggregates guest information across all touchpoints of the customer journey.
To deliver personalized experiences and boost direct bookings, hotels must first build a solid data foundation through a Central Guest Profile (CGP). Without clean, unified data, AI-driven tools underperform. Fixing data issues before adopting advanced solutions enables hotels to unlock AI"s full potential, enhance loyalty, and outpace OTAs.
The big OTAs like Expedia/Bing and Booking are already using gen AI tools to expand searches to trip itineraries, eg Bing's Copilot. It's still early days as the Bing tool clearly just does keyword searches and then uses OpenAI to write a (good) narrative based on the results.
I generally agree with this forecast, Simone. My long held view is that the more technology becomes 'conversational', to use the current en vogue term, or voice enabled, which has long been my bent, the more friendly and accessible technology becomes.
Robotic cleaning of lobby and corridor areas make sense, plus robotic grass cutting. Less relevant for room cleaning given the corners and obstacles, although Neom is exploring this. Car parking via flat bots that rise up and lift the car off its wheels also work well and can optimise space in limited car parks.
This year labor costs in hospitality consume 1/3 of hotel revenue (STR) and robotization and automation are becoming increasingly appealing to hotel owners and operators. Ex. Robots like Rosie by Tailos, thousands of which have already been deployed at various hotels, clean guest rooms 20 percent faster and public areas up to 80 percent faster than human housekeepers.
Of course! We've seen robots in progressive hotels and resorts for years. You're right that cleaning and innovative food delivery are the easier pickings. But we should discuss that bright red line that starts and ends with the front desk.
The hospitality industry has undergone significant changes, yet it has struggled to update its metrics to reflect impactful shifts, such as those related to the future of work. Traditional KPIs, like Revenue per Available Room (RevPAR), which I have used during my time with brands like Marriott and Hilton and learned about at Hotelschool, have not evolved to meet new industry demands. They are now being replaced with more comprehensive metrics that allow deeper insights into a hotel's performance. Among the newer metrics are RevPAM (revenue per available square meter), GAC (guest acquisition cost), and LTV (guest lifetime value). These metrics, made possible through AI-driven live data connections, are what the new-age hotelier taps into to maximize operational efficiency and revenue optimization.
My take remains the same: there is no such thing as "total" revenue management. Revenue is revenue, period. When you buy a pair of Nikes at a sneaker shop, they come with shoelaces; shoelaces are not considered "ancillary" revenue.
The evolution of the Revenue Management discipline in our industry, since its inception 40 years ago, has been driven by large franchised organizations and management companies that care about RevPAR because that's how their business models are structured and that is how they are incentivized.
Over the next 12 months I believe we'll see further advances in agentic interfaces from Apple Intelligence, Microsoft Copilot+ PCs, and Google's agents on Gemini. These interfaces will create an entirely new shopping and booking channel that enables the AI agents to create complete itineraries (and customize them) with deep personalization that will not likely be available via other, current booking channels. The personalization of these itineraries will be based on what the AI agent knows about the traveler(s) based on previous bookings and interactions with brands. Instead of starting their travel planning with Google searches, travelers will ask the AI agent to do the work of building an itinerary for them.
AI is set to transform the hospitality industry significantly in the coming year, driving innovation and efficiency across various aspects of operations. Here are some key areas where AI will make a notable impact:
The question needs to be reworded to ask how Generative AI (Gen-AI) will transform the industry, as Predictive AI (P-AI) has been core to revenue management / pricing systems for decades. P-AI has also been fundamental to RPA - Robotic Process Automation - which links disparate systems that may not have APIs.
Let’s start with the second question. First, you need an AI strategy, and an AI strategy holds or falls apart with your data strategy. To use AI, you need to work with good, clean data. For example, suppose your systems are littered with duplicate profiles.
I believe there will be a large shift over a long period of time. However there's a visual aspect of information that doesn't exist in a query type conversational level. Visual and sound create the emotional reaction. So generative on an "answer my question" level I think yes, but not on an inpirational level.
I agree that we're witnessing the rise of a new, AI-driven interface to the internet, which will expand but not entirely replace today's web interface. GAI chatbots are the first step, worrying Google about the future of its profitable search engine.
In a word, no. Conversational interfaces have their place, but they would add friction to airline, hotel, and restaurant searches. Amazon some years back tried to promote and monetise voice search via its Alexa devices, but no one was interested.
Oh, that's a good one! I think the problem with our industry is that we tend to fear data as the nemesis of the 'human touch' (whatever that means). Henri is right about hierarchical organizational structures. I live by a quote from Ed Catmull, who says: 'If there is more truth in the hallways than in meetings, you have a problem.' Apparently, this seems to be a recurring theme in our industry, and I think data scientists are feared because they can show that the Emperor actually has no clothes.
Any hotel group which values the direct channel (brand.com) already knows that data science has been at the core of digital marketing in hospitality for many years. It's fundamental to customer segmentation, targeting and results measurement.
The data fragmentation in hospitality is a huge challenge the industry faces today. Guest and operational data lives in multiple "data islands" that do not talk to each other: PMS, CRS, WBE, CRM, ORM, CMS, DMS, Social Media and BI.
Data science is an area of expertise that needs specialists, similar to other areas like design and creativity. Typically, most companies have outsourced these non-core functions; in the case of creativity, to ad agencies, for example.
How will we roll out AI tomorrow morning and this next year? There are two answers here:
Behaviors of guests & sorting of all offerings (room, packages, meals, drinks, activities) based on previous behaviors. Much of this if done on a per person can be done using general purpose AI along with a just in time promp injection model.
PMS data is only one source of first-party data, and it's actually quite limited because it focuses only on past guests. A richer set of data is built when combining PMS with CRM data and direct website behavior data. Once powered by that dataset, some key practical applications are: Benchmarking: create automated competitive sets for each hotel and find opportunities for improvement.
According to a Perkbox survey, Hospitality is the fifth most stressful industry to work in, with 64% of employees suffering from workplace anxiety. Therefore, it is not surprising that a significant number of hospitality workers are reconsidering their employment situation and evaluating different career options. And, if possible, the COVID pandemic made things even worse: the 2022 US Job Market Report demonstrated that not only 45% of hospitality workers who have remained in the industry report lower job satisfaction now than before the pandemic,
but also that around 25% of the ones who quit the industry are not willing to work in it again.
Staff shortages create a knock-on effect of larger workloads, which can lead to disengagement and burnout if businesses don't find ways of readdressing this. The key is to zero in on tasks that are inherently more suited to automation.
High-tech, high-touch has always been at the core of good hospitality, it's just that 4-5 Star hotels tend to choose to hide the overt tech from guest view. A high-end, global hospitality membership company bans the use of guest mobiles and guest PCs/tablets after 6pm, and hides its POS inside drawers, but it's still a state-of-the-art system. Site receptionists are always heads-up and greet guests by name and appear to have no tech but are using a top-end CRM system that pops up guest pictures once the member taps their mobile as NFC identification on arrival.