Why Hoteliers Should Treat AI Technology Adoption Like a Knob and Not a Switch

The reservations and front desk departments may fear both chatbots replacing their guest messaging duties and conversational AI supplanting the in-house call center.
By Larry and Adam Mogelonsky - 5.22.2023

Given all the feats that the various generative pretrained transformers (GPTs) have accomplished in the first quarter of 2023, everyone is wondering both how this will apply to their own hotels and how quickly these general purpose artificial intelligences will rewrite the playbook on how travelers think.

While hotels have been labeled as classically slow to change, there are many ways that these advanced learning machines can be deployed today to augment team productivity. And yet, there is a lot of fear over sweeping job loss, and rightfully so.

For instance, senior managers working behind the scenes may worry that their spreadsheet-analyzing, meeting-attending and email-answering days are numbered as system integrations become increasingly sophisticated and robotic process automation (RPA) takes hold. The reservations and front desk departments may fear both chatbots replacing their guest messaging duties and conversational AI supplanting the in-house call center. Next, revenue management AI analytics continues to gain both intelligent recommendations and judgment capabilities.

Besides RPA, there are physical robots that may soon replace runners during the graveyard shift, while ceiling-mounted robotic arms can flip then assemble burgers. Yes, there was also an aborted, near-past attempt to automate laundry’s clothing-folding task, but we chalk that up to ‘too soon’. Think robot maintenance workers like they already have in Japan. You may even have programmatic, on-demand guestroom fitness based off the plethora of AI-driven wellness products hitting the market.

While this is happening at an accelerating rate, it’s not without historical precedence. Automation to therein derive heightened per-employee output is, after all, at the pinnacle of business goals. And for this reason alone the future of hotels is wholly intertwined with technology. Hotels don’t employ elevator operators anywhere, do they? What about switchboard operators? Capitalism being what it is, innovation is perpetually at your doorstep, and it favors the fast movers.

Adopting AI Isn’t Binary

Speaking of switchboards, implementing a new automation tool in a moment-by-moment recollection of events never looks like a light bulb going on and off at the flick of a finger. It only appears this way in hindsight. That is, we are never instantaneously sunset jobs as an implemented technology replaces key tasks previously executed by humans. It’s more like a volume knob on an amplifier turned slowly, but inevitably, to 11.

We’d like to claim this music analogy as our own, but credit where credit’s due we gleaned it from our work with audiophile and CEO of Travel Outlook, John Smallwood, when helping implement the company’s new conservational AI voice bot, Annette™, at a full-service resort on the East Coast. Leveraging the latest in natural language processing (NLP), this AI can understand human speech, multi-pronged questions and hard accents, and then respond accurately, eliminating the need for an IVR and hours of live agent time devoted to answering basic guest inquiries.

But before any of that could happen, a key financial objection ruled the day: the live agents could already answer every question quite adeptly and upsell effectively, rendering said automation as a major risk to gross revenue performance. Looking at the numbers, it was prudent to stay risk-averse as a potential for high six-figure cost savings via automation could nevertheless compromise more than seven figures worth of revenue. “If it ain’t broke,” as they say.

Enter the dial knob as an assurance of task replacement and not job replacement. In the case of Annette, we planned to automate only the vanguard of the guest interaction, getting executive team buy-in by reframing the discussion in terms of the voice channel customer experience. Replacing the IVR was an easy sell as most guests are mildly to strongly annoyed by these. More substantially, the lack of button pushing, being kept on hold or having to wait for a live agent to type information into a system is a real timesaver for guests. The conversation AI was thus trained to handle the top-of-the-top funnel – those initial, repetitive inquiries like “When is your restaurant open?” before passing calls over to the reservations team when warranted.

Besides winning on the call satisfaction side, intake teams were then freed from the monotony of answering these repetitive questions over and over again, which worked to boost morale and give them more time to patiently sell the product and drive TRevPAR via the cross-selling of other non-room amenities. No job was removed, only tasks that no employee really ever wanted to do in the first place.

Concurrently, we developed a roadmap to crank up the volume on Annette and give this bot more general purpose as the executive team became more comfortable, starting with in-house guest calls then deeper support for restaurant, spa and golf bookings along with helping on the hotel bookings side. Maybe group sales support one day, who knows!

We Are Digital Centaurs

Several futurists have famously quipped that, “Productivity is for robots.” In other words, humans are meant to be creative imagineers and all technology we’ve invented throughout civilization has been designed to offload rudimentary tasks onto inanimate objects so that we have more time for increasingly cerebral thoughts.

Unpacking this, we can see that we are on the verge of becoming something akin to digital centaurs, with the rote tasks at a hotel far better performed by workhorse-like automation tools (the horse torso) and liberating the hotel manager for creative thinking or being even more face-to-face with guests (the human head).

Even today, general purpose technologies like Annette, ChatGPT and Midjourney are only limited by the imagination and willingness of the humans behind them. Underpinning all these developments, the purpose of technology must firstly and always be shrewdly focused on improving customer success. That much is obvious, but less so is that as we shift the relative returns of hotelier skillsets towards technology, we risk alienating the people who are drawn to hospitality over other industries.

Speaking from experience, we’ve seen associates and frontline teams become demoralized by all the tech rollouts that aren’t accompanied by continuing professional development (CPD) programs that both explain the why behind the tech and make the job more dynamic.

For instance, with the dawn of kiosks and tablet-based check-ins, front desk agents can be retrained as guest success agents or simply hosts. Much like how the introduction of ATMs allowed bank tellers to focus more on personal customer support and the marketing of other bank services, by removing a lot of the ‘transactional tasks’ that front desk clerks must do, you now have a roving lobby team ready and willing to chat with guests and upsell them on ancillary amenities like your latest chef creations in the restaurant or a new spa package.

But this ability to upsell presupposes that you are educating your own teams on what else is happening around the property and that you are motivating them to care. Thus, AI-based automation also implies a rethink of your CPD, succession planning and employee wellness policies as well as the consolidation of data around a single source of truth and core platforms for easy interpretation and frictionless selling.

Hence, we return to the analogy of the dial knob: AI or otherwise, we must constantly and irreversibly evolve our business practices to automate some tasks to free up more time for other tasks and more free time to consider reengineering other aspects of the organizational cultures.

Together, Adam and Larry Mogelonsky represent one of the world’s most published writing teams in hospitality, with over a decade’s worth of material online. As the partners of Hotel Mogel Consulting Limited, a Toronto-based consulting practice, Larry focuses on asset management, sales and operations while Adam specializes in hotel technology and marketing. Their experience encompasses properties around the world, both branded and independent, and ranging from luxury and boutique to select-service. Their work includes seven books: “In Vino Veritas: A Guide for Hoteliers and Restaurateurs to Sell More Wine” (2022), “More Hotel Mogel” (2020), “The Hotel Mogel” (2018), “The Llama is Inn” (2017), “Hotel Llama” (2015), “Llamas Rule” (2013) and “Are You an Ostrich or a Llama?” (2012). You can reach Larry at [email protected] or Adam at [email protected] to discuss hotel business challenges or to book speaking engagements.

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