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Conversational AI And The Future Of The Hospitality Industry

Customer relations remain one of the most important facets of running a hotel business in 2024. Since more than 60% of all bookings happen online, establishments need to make this process more comfortable for clients without overworking employees or spending too much on client service. This is where conversational AI solutions come into play.

Over 700,000 hotels worldwide already use them to handle various mundane processes. The hospitality industry’s increased interest in these products will contribute to growing the conversational AI market, which is expected to reach $73,05 billion in 2033. Our article covers the main use cases, benefits, and examples of these products.

What Is Conversational AI?

This is an umbrella term for software solutions capable of having conversations with users. They can be used for research and entertainment purposes and, in a business environment, fill some of the roles that were typically for employees only. These products use natural language processing and machine learning technologies to work with text and speech input. 

Large language models such as Llama and GPT are another important component of such tools as they provide the knowledge base for conversational tools. In many cases, LLMs use data scraped off the internet to answer various questions. AI software engineers can narrow down their knowledge and tailor the products for specific businesses and industries.

What makes AI-based products particularly helpful for commercial use is their capacity to self-learn. They handle themselves better the more they talk to people, and have vast databases of similar scenarios to draw from. These tools have long become a part of organizations working in healthcare, education, and finance.

How Hotels Use Conversational AI Products

Chatbots and other types of conversational tools have long been used as an alternative to managing large customer support teams. In the hospitality industry, organizations use them in several different areas of business, resulting in higher efficiency and profits.

  1. Supported booking journeys. AI-based helpers offer comprehensive assistance during the reservation-making process. These tools suggest suitable accommodation options and offer discounts, and deals, making the experience more tailored.
  2. Check-ins and check-outs. Kiosks that use artificial intelligence allow hotel customers to check in and out without waiting in lines. However, most establishments use mobile apps with conversational AI features to handle these operations and provide electronic receipts and room access codes.
  3. Daily hotel operations. Conversational AI tools help businesses in the hospitality industry handle mundane tasks more efficiently. They help coordinate staff activities, manage maintenance requests, and manage inventory levels, ensuring timely restocking and reducing waste.
  4. In-room services. At some hotels, guests use AI-based virtual concierges to get local information and order housekeeping or room services. These products also provide weather updates and news and answer frequently asked questions. In some cases, they even play music like Amazon Alexa.
  5. Tailored promotional campaigns. Hospitality businesses that work with conversational customer helpers have more effective ad campaigns. They know when people usually book reservations, their accommodation preferences, and other details that are used in marketing campaigns.

Why Hotels Invest In AI Solutions?

Increasingly, hotels, hostels, and other businesses in this industry are using these solutions due to AI technology’s inherent self-learning ability, accuracy, and speed. These features make it easier for smaller establishments to function well without a large customer support force and improve several other areas of the client experience.

  1. 24/7 service. Chatbots and other tools that work around the clock ensure that hotel clients get the necessary information whenever they please. They can be made available through mobile apps or website widgets, leading to a better experience at all stages of the stay.
  2. Increased revenue. Utilizing chatbots and assistants improves hospitality establishments’ income. Their personal touch, recommendations, and upselling capabilities increase the chances of positive reviews and recurring customers.
  3. Multilingual communications. Modern conversational AI tools help hotels engage with a global customer base as they can work with different languages. Solutions built using ChatGPT’s technology even converse with people in Arabic and Chinese.
  4. Personalized experiences. The information gathered during their conversations with helpers and chatbots lets hotels provide a more unique experience without extensive additional research. Establishments that know what their customers love to eat or when they usually wake up have higher chances of forming long-time clients.
  5. Up-sell and cross-sell opportunities. Chatbots and assistants learn about client preferences the more bookings they make. This knowledge allows them to effectively sell additional products, such as dinner reservations and airport pick-ups.

Best Examples Of Conversational Helpers In Hotels

The use of these AI-based tools doesn’t just bring theoretical benefits to members of the hospitality industry. Several hotel chains and brands already use these tools to their maximum effect in their daily work.

  1. Accor Hotels

This chain has been using a conversational AI solution called ChatBotlr since 2017. The AI-based product helps customers during their stay at one of Accor’s 5,584 locations. This chatbot works on mobile devices, offers information about hotel amenities, and can be used to order services. People also rely on the product to find out about local places of interest, such as shops, cafes, and museums.

  1. Caesars Entertainment

Since 2018, Caesars Entertainment hotels have been using its AI-based Ivy solution. The conversational helper makes the stay of the establishment’s clients more comfortable by assisting with restaurant reservations and booking rooms. It also helps out with ordering room service and making housekeeping requests.

  1. Hilton Hotels & Resorts

The world-famous Hilton hotel chain uses several products powered by artificial intelligence in its daily operations. In 2016 it unveiled Connie, a robot concierge that’s built using IBM’s Watson technology. She provides information about dining options, hotel services, and local sights. Hilton clients also interact with a customer service chatbot on its website and app to get information about common problems and make reservations.

  1. Marriott International

Chatbots and virtual assistants can be found on this chain’s website and mobile app. These solutions help Marriott clients to get answers to common questions and book their reservations at various hotels. Advanced AI algorithms allow the tools to offer personalized recommendations. The company is also working on an in-room voice assistant for its guests.

  1. Wynn Las Vegas

This Nevadan hotel decided not to invent the wheel and simply added Alexa-powered Echo devices to its 4,748 guest rooms. Perhaps the hotel felt that it was cheaper to spend thousands of dollars on the upgrade instead of building a conversational tool from scratch. People who stay at the Wynn in Las Vegas use the products to play music, control room settings, and learn about hotel services.

What The Future Holds For the Use Of AI Solutions In Hospitality

In the past couple of years, conversational tools have been continuously improving in both their quality and functions. This happens thanks to advancements in large language models such as GPT, Claude, and LLama. These components make chatbots and assistants more accurate and capable of handling complex conversations.

For the hospitality industry, these advancements mean more than chatbots and assistants being able to provide more precise responses. The booming market for open-source LLMs also means cheaper and faster development. As the technology behind them becomes more widespread and available, more businesses will use it to gain a competitive advantage.

The upcoming years will also see products that offer an even higher level of personalization. As AI algorithms become more nuanced, they will be able to identify client behavior and preferences even better. Things like predictive services, anticipatory assistance, and tailored recommendations will become more unique per customer, leading to better satisfaction.

Final Thoughts

Like many technologies, conversational AI has found its audience first among the giant chains that can afford its development and integration. However, the latest developments in this field demonstrate that products based on this technology will become a more common site worldwide, making the hospitality industry more automated and improving its figures.

Featured image by The Anam on Unsplash

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