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The Potential Partnership Between AI and Hospitality
Much has been written about the benefits of pairing artificial intelligence (AI) with commercial real estate (CRE). Current use cases focus on data analytics, asset management and risk identification.
A recent article penned by CBRE experts introduced another AI-CRE combo, which discusses the merits of this partnership in the hotel space. In the appropriately titled piece “AI’s Impact on Hotels,” the authors explained that if appropriately used, the technology promises “enhanced customer service, higher margins and expanded research and booking, with improved experiences for guests.”
Here are some of how AI could benefit the sector:
- Increase in operational task performance. The article’s experts explained that proper use of AI can help operators “achieve efficiencies and realize productivity gains among knowledge workers.” Furthermore, AI will also increase the amount of leisure time for travel, spurring demand for leisure-oriented hotels.
- Drive toward industry consolidation. CBRE explained that AI will drive partnerships, increase scale benefits, and improve data access.
- Improvements in bookings. The article’s authors noted that the technology will “enable hotels to move from offering rooms for a fixed price to making pricing offers based on the total revenue potential of each guest.” Furthermore, AI could prompt some online search engines to shift toward direct sales rather than lodging opportunities.
- Building stronger relationships. The CBRE experts commented that AI and technology enhancements “will influence the relationship between hotel brands, third-party management companies and hotel owners.” The technology will also build stronger relationships between online travel agents (OTA), metasearch platforms, brands and managers.
The article addressed a concern about how AI would impact hospitality jobs, acknowledging that job losses and new and different job creation are likely to occur. Resort hotels could benefit from increased leisure time (unless the technology leads to large-scale job losses).
Demand could be impacted on the business hospitality side, putting hotels servicing corporate travelers at risk. However, “these types of secular changes are not likely to come about within a current 7- to 10-year horizon,” according to the article.
Furthermore, such changes aren’t likely to happen immediately, given the cost of capital these days and the pressure on gross operating profits. “We expect owners to wait at least another upcycle before they consider making these investments in earnest,” the article said.
