Artificial Intelligence in Hospitality: The 5 Most Effective Use Cases [2024]

Ayush Gupta
2 min read
April 1, 2024

So you’re wondering about different uses of AI in the hospitality industry? Don’t panic, you’re in the right company.

If there’s one thing the world learned from ChatGPT’s rebellious, worldwide release in 2022, it’s that Artificial Intelligence has arrived. As one PWC report puts it, it’s projected to contribute $15.7 trillion dollars to the global economy by 2030 alone. 

It wasn’t the case that there was no AI before–it's that the AI tools so far lacked sophistication for any proper, real-world application. 

That’s all changed now. In hospitality alone, AI’s contribution is expected to reach $8,120 million by 2033, as per this report from We Market Research. In other words, a wholesale strategic addition of AI to the hotel industry is now all but waiting to happen. 

Here, we will cover everything from how AI works in the hotel industry to why it’s important. But first, let’s first get our heads around Artificial Intelligence.

What Is Artificial Intelligence?

Artificial Intelligence, like Human Intelligence, is one of those terms that’s difficult to nail down concretely. That's no problem though–we’ll rise to the occasion and take a shot.

As a general rule, whenever Artificial Intelligence is discussed in tech, it refers to the ability of computers to understand and perform tasks that require human intelligence. 

In simple terms, AI is about automating tasks that involve some level of thought, decision-making, and reasoning.

Take the example of doing research for writing an article. Can you block out an hour or two to meticulously search the internet for dozens of statistics? Sure, you can. But is it necessary? Now, with generative AI, absolutely not. Instead, all you have to do is search for your required stats in a generative AI app like Perplexity, and it will do the rest in a matter of minutes.

Here’s a cool video that shows research with AI apps in action:

Pretty neat, right?

But what does this mean for hoteliers like yourself? 

As it turns out, you can do a lot more with AI than sticking to simple research. From sales and marketing to online reviews, you can adopt AI to your hotel strategy pretty much everywhere in your hotel.

1. Get Your Marketing Right With AI

Marketing with AI

One of the best use cases of AI in hospitality is for your marketing.

With the newfound power of generative AI, you can use it for everything, like initiating social conversations, creating video reels and pictures, managing your online reputation, and even bouncing off ideas for content generation.

However, as a hotelier, what are the exact applications for you? More than a few, as it turns out.

1.1. Boost Your Written Content Creation

Artificial Intelligence has made a dent in the way content is created. 

While earlier you might have needed a wholesale team of creators to move the needle, a few people can now turn in the same amount of work; and do it much quicker too.

This is particularly true for less complex tasks. 

It’s true that while we’re still far from having publishable content right off the bat, generative AI tools fill in as great options for brainstorming and content skeleton of sorts. Your headlines and taglines, image creation, videos, and the like–there’s a tool out there for everything.

ChatGPT and Perplexity, for example, are great apps to help you meet your content needs at scale. 

However, while you can’t outsource your content creation needs to the tools wholesale–you still need people to verify and edit the material–there’s a good case for fully augmenting your work with them.  

1.2. Images With Artificial Intelligence  

AI-based image-creation tools have gone all the rage in the last couple of years. And for good reasons. 

They work by taking simple word-based inputs from you, and then interpreting those instructions to create an image. In other words, pretty much the sky is the limit for you.

Have a look at the below AI-based images whipped out of DALL-E 3, OpenAI’s flagship AI image creator:

As you can see from the video above, with only some creativity, you can go a long way.

1.3. Create Video Reels on Your Hotel With AI

Just like images, you can create punchy video reels through simple worded inputs. All you have to do is put the instructions into the AI, and the tools will handle the rest.

By all measures, this is no easy feat. 

Think of the colossal amount of work that goes into making a video reel from scratch otherwise–coming up with a concept, planning and writing down a story, planning for production, shooting or creating your video, and then finally bringing it to life through different tools and editing. It takes its time. 

With an AI video creation tool like SORA, you can rapidly cut down your time for all of this uncool and time-consuming stuff, and so ramping up your video creation efforts as a result.

A tool like SORA can do everything from parsing your instructions to creating complex scenes with varied camera motions, all in a few seconds and minutes. Again, while this won’t replace a real video production company by any means, it’s a step in the right direction. 

So a mix of both AI and video specialists' tools will wonders for video production quality and quantity. 

2. Dial up Your Hotel Sales With AI

There’s no dearth of lost opportunities in the broken land that is hotel sales. Adding AI to your hotel sales strategy can help you salvage those opportunities. 

How?

You can implement AI for automating your follow-ups, cross-selling, and even direct selling on social media. Let’s dig into each point in detail.

2.1. Boost Your Revenue Through Sales Follow-Ups

A huge chunk of hotel opportunities are also lost due to zero or almost non-existent follow-ups. 

Think about it. Do you have round-the-clock, instant communication available for interested guests? Are your sales agents following-up with the best strategies, for all the inquiries?

Most likely not. In fact, as a report from Event Template shows, 28% of hoteliers simply don’t respond to sales inquiries at all—or they do it by the time it’s too late. So unless you’re an outlier or if you have already adapted AI to your hotel marketing strategy, we’d bet you a hundred bucks you’re losing big on your direct booking sales inquiries too.

Adapting AI to all your channels—social, phone, etc—will keep you from missing out on such inquiries. The chatbot or voice assistant powered by generative AI, for example, will take care of booking sales through quick, automated follow-ups.

In fact, the chatbot can contact prospective guests within a 24-hour window, massively reducing their chances of choosing a competitor.   

2.2. Effective Upsells and Cross-Sells

You can also automate your upselling and cross-selling opportunities through artificial intelligence. Whether through a hotel voice assistant or a chatbot, using the latest AI models will allow you to tailor your suggestions to your guest’s profile.

If your guests interact with a chatbot on WhatsApp, for instance, they will be shown a host of categories they’d most likely choose.

2.3. Initiate Conversation on Social Media

People love to follow brands they like or respect online. Whether it’s through likes or comments, people are always going to be scouring for great content to engage and inform themselves with.

At times, this might mean they interact with your content–your reels, photos, and so on. This, it turns out, is a great opportunity for you to reach out to these people and offer them relevant offers or discounts. A discount or coupon for upcoming festivals, some points for creating a new account, etc., are all great opportunities for making a quick sale down the line.

An AI tool adopted for hospitality can automate all of this for you.

3. Automate Your Online Reviews With AI

Reviews are an essential element of a good hotel strategy and are a great contender in getting automation through AI. Here’s how.

3.1. Get You Feedback for Positive Reviews

Online Review

Effectively, online reviews are your word-of-mouth marketing brought online. Good feedback about you online therefore equals a great hotel service in the minds of your prospective guests.

Through artificial intelligence, you can massively fasten up this process. Reaching out to your guests as soon as they leave on the best channels they’re most likely to respond to (usually WhatsApp) allows these tools to be far more effective than your staff.

Since the process is all automated, you don’t have to worry about follow-ups either.  

3.2. Immediately Inform Your Hotel Staff of Any Negative Guest Experiences

Implementing artificial intelligence in your hotels–whether through chatbots or voice assistants–will also help you massively cut down your negative reviews; otherwise a curse for hotel brands worldwide.

Here’s how it works in practice: The tool will contact your guests, as is regular practice, and ask them for a review as soon as possible. 

If the AI bot picks up a negative review about you from any guest, it will immediately forward the feedback to your hotel staff (while it has also apologized to the guest through chat or email).

You can then preemptively reach out to your disgruntled guests and try to fix their issue. Depending on how you carry the conversation from there, this will help avoid bad online reviews to a very large degree.

4. Improve Your Customer Service

Artificial Intelligence in hospitality is, at its bottom, about automation. 

So repetitive tasks that rarely require out-of-the-box thinking and follow a set pattern are first in the line for disruption.

Customer service is a great application for this. It’s an essential aspect of good hospitality, one that stands to gain the most from modernizing with artificial intelligence.

Let’s look at the different ways AI can transform your hotel’s customer service.

4.1. AI Can Play the Role of a Hotel Concierge

With Artificial Intelligence adopted to hospitality, you can now automate most of your concierge's repetitive work–specifically, the work that is less creative or hands-on in nature.

So from booking confirmations or inquiries and early check-ins or check-outs to staff forwarding, upselling, and cross-selling–an AI concierge can handle everything usually handled by an in-house staff..

Here are a few ways this will benefit you:

  1. A significant cost reduction through task automation of most repetitive tasks.
  2. Reduced workload on your staff, letting them focus on things that matter.
  3. Almost instant solutions, or responses to, guest questions or requests, become possible. 

In other words, AI in hotels will significantly cut down the load off of your concierge’s shoulder, helping them focus on the work that matters most.

4.2. Carry Out 24/7 Customer Service for You

Hotel Receptionists

Guest or customer service is always going to play a big part in your hotel marketing strategy. 

In fact, as research suggests, nothing hits your business as hard as bad customer service–with a hefty chunk of hotel guests reporting poor customer service experience as the leading cause for their brand switch.  

Artificial Intelligence can solve this problem for your hotel by providing 24/7 customer service.

For instance, you can use AI chatbots to augment your hotel customer service teams. With generative AI chatbots, you can answer almost all of your guests' queries in almost human-like tone—and do that 24/7 too.

This makes it especially useful for times when your hotel is short-staffed, such as off-hours or peak seasons.

Similar to a chatbot, you can adopt hotel voice assistants to answer and automate the most repetitive questions or tasks that would other require a front desk executive. 

This includes everything from making new bookings to scheduling ad-hoc changes in bookings.   

5. Using Artificial Intelligence for Revenue Management

Revenue Mnagement

Revenue Management is at the heart of growing your hotel revenue. As you’ve probably already guessed, it’s another area that AI is destined to disrupt.

A report from Boston Consulting Group says the same. According to it, automating your revenue management with AI can grow your hotel revenue by up to 5% in less than nine months. 

In other words, AI can play a direct role in ramping up your hotel revenue. 

What are the specific ways it will achieve this though? Let’s see.

5.1. Automate Your Dynamic Pricing

Known as the Dynamic Pricing strategy among veterans, this simpe method ensures you don’t price yourself out of business. It also makes sure you don’t sell yourself for too cheap. 

At its core, it's about adapting your room prices to the fluctuating market conditions.

Artificial Intelligence tweaked to hospitality will help you in this big time.

“A lot of proposed applications of generative AI feel like solutions in search of a problem, but revenue management is a perfect use case for it,” said Jeff Edwards, a consultant and former IHG executive, in an interview for Skift. “It’s data-intensive, and it’s too complex for humans to manage in real-time.” 

With the latest machine learning and algorithms, AI will analyze your historical data, competitor pricing, and market trends. It will then give you the most relevant pricing options, which will be tailored to increase your revenue.    

5.2. Helps You Optimize for Ancillaries

Ask most people about revenue management today and you’d rarely hear anything about optimizing your pricing for individual guests.

For example, there rarely exists a process for tailoring your pricing to the behavior of individual guests who might spend on other secondary hotel services, such as a bar, spa, and so on.

AI can help you optimize for it all. Since the data you will need for this is vast, it’d be too difficult for a revenue management officer to parse through it all alone. 

For an intelligent generative AI system, however, analyzing and suggesting all of this is a piece of cake.

5.3. Demand Forecasting Through AI

Demand forecasting, as its name suggests, is about predicting your guests’ future booking behavior on the basis of their past purchases. 

Sometimes also known as hotel forecasting, it helps you maximize your event calendars, booking trends, and market conditions, resulting in better inventory and pricing management.

Through AI’s predictive analysis abilities, you can then optimize your operational efficiencies, strategic planning, and resource allocation.  

Moving With the Waves: Adopting AI to Your Hotel

With the rapid advancement in generative AI models, Artificial Intelligence is only going to play a bigger and bigger role in the hospitality business. 

Revenue management, 24/7 customer service, online hotel reviews, and so on–everything traditionally managed by a big chunk of your staff will be augmented with AI to provide better and faster experiences to your guests.

So unless you plan to be left behind in the stone age, it’s high time you adapt Artificial Intelligence to your hotel strategy to keep up with your competitors.

Ayush Gupta

Ayush co-founded Brance and leads its AI efforts. He is xStanford and xApple with expertise in Search, Big Data, NLP, and Generative AI. He previously led the App Store Search Ranking at Apple.

Outside of work, he enjoys swimming, running marathons, and playing cricket.

Frequently Asked Questions

Why is First Response Time important in inside sales?

First Response Time holds a great importance in inside sales because it influences customer satisfaction. Ultra-fast responses improve the chances of potential leads getting converted into paying and loyal customers.

What are the consequences of a delayed first response in inside sales?

A delay in First response time can result in missed opportunities, customer frustration, and a negative impact on conversion rates. Potential leads may lose interest or shift to competitors when experience a delay in response time.

What role does technology play in reducing first response time?

Technology plays a vital role in reducing first response time through automation. AI-driven chatbots streamline the communication process and enables faster interactions.

Why is First Response Time important in inside sales?

First Response Time holds a great importance in inside sales because it influences customer satisfaction. Ultra-fast responses improve the chances of potential leads getting converted into paying and loyal customers.

What are the consequences of a delayed first response in inside sales?
What role does technology play in reducing first response time?

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