David Collins, COO of Great National Hotels and Resorts, Ireland and the UK’s fastest growing hotel chain, recently joined Frank Reeves, Co-Founder and CEO of hosp-tech company Avvio, at the launch of Avvio’s own AI-powered hotel booking engine Allora, at this year’s recent World Travel Market in London, to discuss the implications of artificial intelligence (AI) for the hotel industry.
There's nothing new about Artificial Intelligence and Machine Learning: we interact with varying levels of AI on a daily basis... for example, Netflix video-streams recommendations based on your viewing history and Google Maps provides route predictions based on your current location. For the most part, customers are unaware that all of these services are powered by AI.
AI is the activity devoted to making machines more intelligent, and intelligent is that quality that enables an entity to function appropriately and with foresight of its environment.
— Nils J. Nilsson, The Quest for Artificial Intelligence, 2010
So what is the wider context for AI?
In recent years, the wider travel industry – in particular OTAs - has started to adopt AI however despite cosmetic efforts by some chain brands hotels are lagging behind and do need to start actively engaging.
Guests are increasingly opting for a more seamless, frictionless online experience. This in itself has become a key brand differentiator as consumers increasingly expect personalised, intuitive engagement from brand providers, across all sectors, not just hotels. This is a huge challenge whereby each of your guests is treated to customised advertising messages which reflect their needs, wants, likes and dislikes. The OTAs are already well ahead of the curve here and hotels need to catch up if they are to address the challenge of channel switch.
There are plenty of examples of applied AI within our daily lives: what’s interesting is the sense that this really is only the beginning, that we’re on the cusp of a something truly extraordinary, possibly even an industrial revolution for our time… in fact there’s been more progress on AI in the last 5 years than in the last 50 years.
Are hotels prepared for this new industrial revolution?
A challenge for hotels is that data on our clients is collected and maintained in different silos within our businesses including for example a hotel’s PMS, the point of sale system, and booking engine to name just three and invariably these systems are not integrated so this is a huge elephant in the room when it comes to joining up the dots on guest behaviour. There are emerging systems which address this however there are still in infancy and not tried and tested. Furthermore you’ll have the usual kick-back from systems providers not wanting to maintain APIs as a means of protecting market share. This is hugely short-sighted and a drag on the industry forging ahead with AI.
So central data management is key here. But there’s another real block to AI unfolding within hotels distribution, marketing and brand delivery and that is the following: if a hotel is to embrace AI fully, it does demand that decisions on pricing and packaging hotel rooms are driven by machine learning as distinct from personal opinion and the preferences of yield managers and marketing executives.
If you take Allora, Avvio’s own AI system which underpins its booking engine technology, what you have is a highly effective means of processing, collecting and interpreting data 24/7 on traffic, user behaviour, conversion optics, etc. at an exponentially higher level which in turn should inform more proactive distribution decisions. The challenge here is for business owners to free the reins, stand back and let technology take over .. pragmatically, this is going to be a bit tricky but I have every confidence that we’ll get there, after all who wouldn’t want higher customer engagement and more market share?
Allora uses machine learning, and will be the world’s first direct booking platform using artificial intelligence. Working on a case by case basis and adapting to each shopper’s needs, Allora is more advanced, more adaptive and more intelligent than any other direct booking platform, with an aim to always drive conversions and repeat bookings through constant learning models.
— Frank Reeves, Co-Founder and CEO, Avvio
The short of it is that how we interact with the world around us is about to change immeasurably, where for example our behaviour becomes predictable and our preferences are anticipated as a result of our behaviour online: thanks to a highly pixelated digital foot-print which is created and maintained through AI and more specifically applied machine learning – eventually you’ll get what you want, when you want it, where you want it, etc. before you knew you wanted that something in the first place.
This is perhaps both chilling and exciting in equal measure.