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June 18, 2023

Artificial Intelligence

David Chestler - dchestler@provision-partners.com

Hospitality Upgrade’s Executive Vendor Summit (EVS) celebrated its 18th birthday this year. The event was born in 2005, during a time of technological transformation which saw the rise of social media. In 2005, 8% of the U.S. population had a social media profile on one of three prevalent applications (MySpace, anyone?).

Today, 82% of us have a social media profile on one or more of seemingly countless applications that we use daily to influence minor and major decisions, including entertainment, lifestyle, purchases, and travel, among others. Social media has also radically transformed how today’s travelers and hotel guests interact with the hospitality industry – and vice versa.

In 2023, another major technological transformation is now underway with the recent, widespread introduction of artificial intelligence (AI). Unless you’ve been living under a rock over the past several months, you’ve been bombarded by a constant stream of information and a wide range of opinions on AI, including its power to do good and the potential risk its unchecked use might bring.

As both a participant and a speaker at this year’s EVS, I was privileged to be in a room full of hospitality executives – each with a unique perspective about AI and its potential applications for the hospitality and travel industries. The session was titled, “Are you there, Nessie? It’s me, AI...”

We began with questions to establish a baseline regarding what attendees were thinking about AI. The poll results were interesting and contradictory. A full 100% of 48 respondents saw AI as applicable to the hospitality and travel industries. Only 2% felt AI could play a role in top-line revenue generation, while 25% saw AI as a greater contributor to efficiencies. About half, or 48%, said AI is applicable to their current product or suite of products, while 4% found no use for it, and 38% already used some form of AI.

Another question explored attendees’ familiarity with the two forms of AI – artificial narrow intelligence (e.g., self-driving cars, ChatGPT) and artificial general intelligence (AGI). Only 29% of respondents answered correctly. Today, AGI is theoretical. The best examples can currently be found in movies (e.g., Ultron from The Avengers). Other fields, such as machine learning and data science, are components of AI.

A word cloud exercise generated the most revealing answers. We posted this question to attendees: “What two words best describe your understanding of AI?” and received a broad set of answers. While 100% of people in the room responded “yes” to AI’s applicability to hospitality and travel, the number one word used to describe AI in the Word Cloud was scary.

This isn’t surprising when you consider the sheer volume of recently published information about AI and its general newness. Many misconceptions and gaps still exist regarding its extensive and rapidly evolving capabilities and its likely impacts.

The number one word used to describe AI in the Word Cloud was scary.

The rest of the EVS session was devoted to adding structure, definition, and hospitality color to the topic of AI, with the goal of making it a little less scary.

Currently, nine capabilities allow AI to perform tasks traditionally relegated to humans:.

Fuzzy Logic
Expert Systems (e.g., in healthcare or similar areas that we focus on in hospitality and travel)
Predictive AI
Deep Learning
Machine Learning
Robotics
Computer Vision
Conversational AI
Generative AI – this is the one creating all the noise with the explosive introduction of ChatGPT.

A word cloud exercise generated the most revealing answers. We posted this question to attendees: “What two words best describe your understanding of AI?”

We see communications and experience in work groups and at events. IATA’s New Distribution Capability (NDC) and the Web3 promise to enhance the direct sale and merchandising of traveler experiences. We believe that AI is ready to transform travel, hotel operations, and life and work roles dramatically.

At EVS, there was a wonderful, open dialogue among the attendees. Nomadix Chief Revenue Officer Speleos Dravillas, an early industry leader, spoke about Angie using natural language processing like Alexa and Siri to engage with hotel guests and increase the front desk team’s ability to perform value-added tasks. He shared the firm’s learnings and spoke about new
market entrants.

Rod Jimenez, CEO of SHR Group, discussed robotics process automation (RPA), which allows for automation of repetitive, manual tasks, and its contribution to operational efficiency. Jimenez also oversaw SHR’s recent acquisition of Avvio’s allora.ai, the first AI- powered booking engine.

Each of these executives, and many more, like Anne Frye, vice president of growth and business development from InnSpire, works daily with both the latest technologies and with hoteliers interested in creating better experiences for their guests, colleagues and owners. Hearing about their experiences and support for this emerging technology helped me realize the contribution it can make to one of the oldest industries.

These early learnings enrich the traveler’s experience and boost the operator’s advantage in doing more with less, which is extremely important in the current period of high inflation and staff shortages.

Our ongoing mission is to understand the value of commitment to implementing AI into business processes, whether they’re customer-facing – for guest engagement – or internal and aimed at optimizing operational processes.

There’s so much more to learn, including the legal and ethical considerations of protecting content and data. As AI is in its infancy, we’re just now scratching the surface of data protection implications. We need to work together to ensure we deploy these solutions correctly and with the proper safeguards and protections.

We also discussed AI as a service. Who’s building and supporting AI for enterprise solutions? How it will get to smaller properties and alternative inventory providers? The resources to manage and support the tools and technology will come from testing new developments and exploring alternatives to traditional, pre-pandemic business methods.

Fully deploying AI will take time, but as we found at EVS, 38% of attendees already use AI within their business, and other industries are even farther ahead. Do you foresee emails from Microsoft or Gmail responding on your behalf using integrated APIs from ChatGPT and Microsoft or Google’s Bard?

Will ChatGPT and machine learning support your CRS, PMS, or RMS through a call center within your training materials or operational enhancements? Do you trust the machines more than the humans we employ in each business silo to dynamically make room, rate, and ancillary service bundling decisions to enhance the customers' experience?

The latest news includes stories indicating that Expedia, Amadeus, Microsoft, and Google are all pushing for more AI APIs. Amazon Web Services (AWS) now offers enhanced solutions with improved tools to deploy AI for developers and easy AI integration for common use cases such as personalization. We must embrace this opportunity to learn and collaborate to make the travel process more personalized, frictionless, and secure.

The news about generative AI and its various incarnations (e.g., ChatGPT) continues to build anticipation of a change to daily operations. At what cost will we develop new solutions? How do we determine real return on our investments? Will vendors make their investment back
by being able to charge more for services enhanced with AI, or will it become table stakes, as many suggest? The market is moving quickly, and you need to be in the conversation to remain relevant.

We believe there is great interest in achieving the next level of personalization and experience, improving all components of the hospitality journey. Please share your thoughts and experiences with the HU readership through the following links. Your feedback will inform the next article in this series.

Please share your thoughts with us on LinkedIn at the group: Hospitality Upgrade AI Discussion board or send an email to Geneva Rinehart (grinehart@hospitalityupgrade.com), David Chestler (dchestler@provision-partners.com) or Sally Kelly (skelly@provision-partners.com).