AI/ML Use Case Library for Hotels
Leverage AI and ML to improve business processes and improve guest experiences.
- Hotels are challenged with inefficient business operations and are uncertain how to effectively address them.
- Adopting new technology and achieving exponential IT status requires a strategic approach and alignment between IT and the business.
- AI & ML are typically significant investments. Smaller organizations with limited resources will require a comprehensive business case to get buy-in.
Our Advice
Critical Insight
Hotels that invest in AI and ML will foster exponential innovation to improve operational efficiency, guest experiences, and data-driven decision-making, ultimately developing existing and new business processes.
Impact and Result
- Pull inspiration from a curated collection of best-in-class AI and ML use cases to drive the initiative ideation process.
- Concepts can be helpful when designing transformation roadmaps, despite different implementation methods.
- Our analysis offers additional guidance on return on investment (ROI) guidelines, primary sources of value, and more.
- Pulling best practices from anonymized use cases increases the odds of successful value capture.
INFO~TECH RESEARCH GROUP
AI/ML Use Case Library for Hotels
Leverage AI and ML to improve business processes and guest experiences.
Analyst Perspective
Achieve exponential innovation with AI and ML
The hotel industry is experiencing unprecedented change and disruption due to the rapid development of artificial intelligence (AI) and machine learning (ML). In this new era, hotel organizations require a digital strategy to guide their AI and ML transformation journey.
With that aspiration in place, hotel business and technology leaders must work together to map out tactical and actionable plans to support an organization’s strategic goals and reach exponential IT status. An effective AI and ML transformation plan executed within the next one to two years can define the next one to two decades.
Hotels must balance the need for digital technology investment with affordable service. At Info-Tech, our goal is to help leaders accelerate the identification and development of tactical AI and ML transformation initiatives to enable your digital transformation and exponential IT journey.
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Elizabeth Silva
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Executive Summary
Your Challenge
- Hotel organizations are challenged with inefficient business operations and are uncertain how to effectively address them.
- Adopting new technology and achieving exponential IT status requires a strategic approach and alignment between IT and the business.
- AI & ML are typically significant investments, which is a challenge for smaller organizations with limited resources requiring a comprehensive business case to be made.
Common Obstacles
- Obtaining alignment on technology requires a strategic approach between IT and the business to develop value.
- A comprehensive business case is required to provide proof of value due to the significant investments proposed.
- Many AI and ML initiatives are often delayed and over budget, leading to unsuccessful projects.
- Identifying industry-leading best practices can be helpful in driving early ideation sessions if the business is available for it.
Info-Tech’s Approach
- Pull inspiration from a curated collection of best-in-class AI and ML use cases to drive the initiative ideation process.
- Concepts can be helpful when designing transformation roadmaps, despite different implementation methods.
- Our analysis offers additional guidance on return on investment (ROI) guidelines, primary sources of value, and more.
- Pulling best practices from anonymized use cases increases the odds of successful value capture.
Info-Tech Insight
Hotel organizations that invest in AI and ML will foster exponential innovation to improve operational efficiency, guest experiences, and data-driven decision making, ultimately developing existing and new business processes.
Gen AI is an innovation in ML
Generative AI (Gen AI)
A form of ML where a Gen AI platform can respond to prompts by generating new outputs based on training data. Depending on its foundational model, a Gen AI platform will provide different modalities and resulting use case applications.
Machine learning (ML)
An approach to implementing AI where the system is instructed to search for patterns in a data set and then make predictions based on that set. This way, the system iteratively “learns” to provide more accurate content over time (think of Google’s search recommendations).
Artificial intelligence (AI)
A field of computer science that focuses on building systems to imitate human behavior. Not all AI systems have learning behavior, as many operate on preset rules (e.g. customer service chatbots).
Info-Tech Insight
Many vendors have jumped on Gen AI as the latest marketing buzzword. When vendors claim to offer Gen AI functionality, pin down what exactly is generative about it. The solution must be able to generate new outputs – not just predictive ones.
Diverse AI capabilities will drive value
Hotels are implementing a wide range of AI capabilities as Gen AI continues to evolve.
Primary AI capabilities being adopted in global business
(Source: McKinsey & Company, 2022)
Hotel organizations can differentiate themselves using their vast and diverse data to unlock the value of AI.
Main objectives of AI adoption within organizations
(Source: Scale, 2023)
Gen AI for hospitality and travel is estimated to surpass US$1.1 billion by 2026. (Source: IndustryARC, n.d.)
AI and ML have significant guest experience benefits
- Intuitive and simplified guest engagement for more immersive experiences. Streamline guest interactions using AI to analyze large amounts of guest data to generate insights and personalized content, improving service quality and anticipating guest needs.
- Implementation can be delivered through multiple channels to enable seamless experiences. AI tools can enhance the omnichannel experience, delivering consistency across every touchpoint by considering the digital data footprint each guest leaves behind in every engagement.
- Enhanced convenience and accessibility for all guests reducing friction points. As consumer demand for quick service intensifies, AI offers a valuable solution, producing relevant information with better accuracy and minimized response times.
- Cater to digital natives’ needs and wants in a digital-first world. Digital natives, born between 1997 and 2012, fully embrace technology and are eager to incorporate AI and ML into their daily lives. Organizations can benefit by plugging AI into guest interactions.
48% of technology leaders plan to use AI to create highly personalized experiences. (Source: Oracle, n.d.)
45% increase in spend-per-customer with AI. (Source: Oracle, n.d.)
There is broad AI applicability for employees
- Productivity enhancement. Reduce manual effort and repetitive tasks to save time and costs that could be spent on other important processes including guest interactions.
- Democratized data analytics. Employees can improve self-reliance by incorporating these into daily workflows, creating tangible value within their applications, and improving practicability.
- Employee empowerment. AI enhances training for employees which decreases performance gaps. This will also yield more relevant results, allowing them to make better decisions in a fraction of the time.
- Unlock digital value. Drive new low-cost, high-volume, data-driven business models. There is clear evidence of applicable use cases that can support interactions between guests and employees.
AI will be leveraged as a platform for business
Disrupt the traditional operating model and strategy. IT and business strategies should merge and holistically consider the impact of technology and how it enhances the vision of the hotel through an integrated business and technology leader. This leader should enable the following elements to leverage AI as a platform.
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Project and portfolio management
Project and portfolio management tasks will become AI across the entire business, developing a deeper understanding of resources, capacity, skills, and quality to improve resource allocation and accountability for projects. -
Service planning and architecture
Technology and business capabilities will no longer be separate. Co-create platforms with the business to enable streamlined services and enhanced guest experiences through automation, such as Gen AI chatbots for conversational booking. -
Infrastructure and operations
Embed AI into the business to support and provision operations to indicate where time-consuming and manual work can be eliminated. Improve productivity levels within the corporate or front-line environment, such as automation of night audit processes. -
Applications
Casinos and hotels must develop an aligned platform of products to properly enable AI/ML capabilities and provide enhanced and seamless stakeholder journeys (e.g. utilizing Gen AI chatbots to service multiple areas of the business through an omnichannel strategy).
Innovations in AI are beneficial to hospitality
AI is not new by any means, but hotel organizations have been aware of its growing potential since 2017. AI is predicted to contribute up to $15.7 trillion to the global economy by 2030. $6.6 trillion of the total contribution will come from improved productivity and $9.1 trillion will come from AI adoption side effects (PwC, 2017).
Philip Rothaus, Managing Director for Data & AI - Alvarez & Marsal’s Travel, Hospitality & Leisure Practice
“The opportunity with AI is in augmenting and embedding new insights into existing processes. It’s about supporting your people by automating tasks in their jobs that aren’t value-added so that they can focus on what they can do best.” (Source: Hotel Operations, 2023)
Ingrid Jarret, CEO – BC Hotel Association
“There is value in AI, because it frees up staff time, and sometimes can provide improvements in helping customers in ways that people cannot. Hoteliers will use AI, but it will not replace humans, as we are the people in business.” (Source: Business in Vancouver, 2023)
Brian Kirkland, CIO – Choice Hotels
“Generative AI could help guests find answers faster about properties and help Choice Hotels franchisees figure out the right type of business strategy or even the policies around how we should run our business.” (Source: Skift, 2023)
Frank Wolfe, CEO – Hospitality Financial and Technology Professionals (HFTP)
“ChatGPT and other similar language models have the potential to greatly impact the hospitality industry by automating and improving many customer-facing tasks by eliminating repetitive tasks, providing 24/7 customer service, and improving the overall customer experience.” (Source: Hospitality Net, 2023)
Info-Tech’s approach and team can help irrespective of where you are in your digital journey
Starting |
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Benefiting |
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Where are you in the journey? |
Establish your digital North Star |
Quantify the value of digital use cases |
Create the digital roadmap |
Deliver digital use cases and realize impact |
Create the infrastructure to drive and sustain change |
| Set aspiration: Vision setting with key business unit (BU) stakeholders to discuss and align on digital aspiration (e.g. Big-T vs. Mini-T, self-funded/slow burn vs. investments) | Assess opportunity: Comprehensive enterprise-to-enterprise (E2E) understanding of the digital opportunity across BU/functions (e.g. data analysis, process walks, and interviews) | Design and plan: Bottom-up initiative design and planning (e.g. opportunity to initiatives, financials, phasing, design principles) | Execute: Detailed initiative builds, and implementation, execution with rigor and transparency (e.g. process optimization then automation, test, measure, scale) | Enable: Set up the transformation infrastructure, operating model, and culture to drive value capture and sustain change | |
Examples of how Info-Tech can help |
Digital North Star placement
(e.g. industry trends, top-down opportunity, high-level planning) |
Digital maturity assessments
(e.g. current-state digital adoption and transformation readiness) |
Initiative bottom-up design
(e.g. initiative ideation and business case creation, work plan, investments) |
Initiative build
(e.g. zero-based process redesign with technology) |
Transformation infrastructure
(e.g. transformation program design, transformation office) |
| Opportunity assessments
(e.g. BUs/function value creation diagnostics, opportunity levers) |
Holistic initiative planning
(e.g. phasing, interdependencies, investments) |
Initiative implementation
(e.g. testing and pilot, scale-up roadmap, performance tracking) |
IT modernization
(e.g. technology infrastructure required to execute digital levers) |
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| Value assurance assessment
(e.g. course correcting and accelerating initiatives underway) |
Change management
(e.g. org-wide change program and stories, comms, governance) |
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| The following content will provide an overview of AI and ML use cases in hotels. This will support opportunity assessments across the organization’s value chain. Note: This does not provide the value/ROI specific to your organization. For that, detailed current-state and opportunity assessments must be executed. | Performance management
(e.g. leading/lagging KPIs, people mgmt. for continuous improv.) |
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| Workforce management
(e.g. upskilling, right people, right place, right time) |
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Measure the value of this document
Document objective
Highlight best-in-class use cases to spur the initiative planning and ideation process.
Measuring your success against that objective
There are multiple qualitative and quantitative, direct and indirect metrics with which you can measure the progress of your initiative pipeline’s development. Some examples of this are:
- Increased initiative pipeline value
- Number of capabilities impacted by initiative pipeline
- Enhanced understanding of initiatives’ impact aligned to organizational capability map
- Better understanding of which sources of value are being addressed or under-addressed in the organization’s initiative pipeline
See Establish Your Transformation Infrastructure in the Digital Transformation Center for more details
SECTION 1
AI/ML Use Case Library Methodology
About Info-Tech
Info-Tech Research Group is the world’s fastest-growing information technology research and advisory company, proudly serving over 30,000 IT professionals.
We produce unbiased and highly relevant research to help CIOs and IT leaders make strategic, timely, and well-informed decisions. We partner closely with IT teams to provide everything they need, from actionable tools to analyst guidance, ensuring they deliver measurable results for their organizations.
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Unlock Sample ResearchContributors
- Eric Bowers, CTO, Boyd Gaming
- Dan Kornick, CIO, Loews Hotels
- Michael Mahar, SVP, Head of Technology & Digital Products, Wyndham Hotels & Resorts
- Anonymous Contributor, Gaming Analyst/Technical Lead, Gaming & Hospitality Organization
- Shawn Seaton, Senior Director of Enterprise Architecture, Choice Hotels International