Why the luxury hotel industry needs AI?

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(and Big Data)…

When asked the question “what type of hotel is best suited for the use of AI-powered virtual assistants?”, the chance of people answering “luxury hotels” is pretty much nil. And yet, data collected on the subject tells a different story. In fact, luxury hotels are the ones that need this tool the most…

During my final class on AI and big data in the hotel industry at the University of Monaco, my students were skeptical about the idea of using AI and big data in high-end hotels. So I asked them to call up the number one hotel in Monaco and ask a simple question: “How much is breakfast?”

It took us seven minutes to get an answer…Seven minutes may be a long time to spend on the phone during a class, but after that, I had their full attention.

AI meets the modern need for instant, round-the-clock responses that humans simply cannot provide. Luxury hotels (A luxury hotel is regarded as a hotel which offers a luxurious accommodation experience to the guest) shouldn’t be striving to find a way to do everything manually, but instead strike the right balance between manual and automated tasks.

For this to be possible, we will need to shed some preconceived notions and beliefs about these fabled virtual tools.

Seven clichés that luxury hotels need to rethink ASAP

Cliché No. 1: The hotel already has all the data it needs

Virtually no modern hotel has a physical or electronic record of all its business information. Most of the time, hotel data is spread out across various media and is hard to access. This is the so-called “dark data“*, information we know exists somewhere⁠—but nobody knows exactly where.
Dark data is data which is acquired through various computer network operations but not used in any manner to derive insights or for decision making.” (Source: Wikipedia).

Some information isn’t even documented at all, and managers have to pick the brain of a receptionist who retired three years ago!

Worse still, the most structured data out there is on OTAs (think Booking.com or Expedia). In other words, the very same hotels that have worked tirelessly to populate the OTAs’ database do not have a solid handle on, nor do they benefit from all this precious data. And it is this very information that allows OTAs to compete with rival hotel companies.

Cliché No. 2: High-end customers don’t use virtual support services

Let me ask you a question: which hotel do think gets more questions from guests, a budget motel or a hotel like the Ritz? Bingo! It’s a no-brainer right?

We consistently observe that 2 and 3 star hotels offer a limited range of services with a low volume of customer interaction. Luxury hotels, on the other hand, offer a wide range of services that their guests can rely on.

Here are a few examples: 

  • Pool temperature (in Celsius and Fahrenheit)
  • Dress codes at hotel restaurants
  • Timetable and booking system for yoga classes and the spa
  • Height of the car park
  • Cost and availability of child care services
  • Booking system for services like a rose petal turndown

To date, there are more than 1000 different data points that 5-star hotels must provide and keep up to date.

Cliché No. 3: The staff knows the Hotel

Let’s skip over the issue of staff turnover for now and say that your typical receptionist can easily answer questions related to their department. When asked about other services however, such as the restaurant or the spa, they’ll most likely be stumped.

Do you know a human

  • that can provide immediate responses to the 1000 data points that characterize a hotel;
  • or that can, failing that, find this information in a few seconds;
  • that can respond in up to 30 languages; and
  • that is available 24 hours a day, 365 days a year?

A human no, but Artificial Intelligence, yes. AI will answer any questions instantly and accurately. 

Cliché No. 4: Guests want human interaction

False! Guests want to get a quick and relevant response, that’s all. Who or what gives them that answer isn’t important. An effective virtual assistant will be able to cover 85% of queries without any outside help. For questions that do require human intervention, the assistant will quickly direct them to the appropriate team member.

See how Velma Works, and book a meeting with our experts in hospitality industry.

Cliché No. 5: With high-end customers, you need to speak their “language”

Again…that’s false. In fact, an answer that’s seen as standard for an American guest might seem over the top to a British person, and even laughable to an Australian. For an answer to be effective, it needs to be simple and clear: anything too wordy is a no-go. This so-called high-end clientele needs clarity and simplicity, and this is where modern communication channels such as Facebook, WhatsApp, Instagram, Line, and WeChat can come in.

These platforms are valuable direct booking channels, and yet all too often they are overlooked or relegated to social media managers who lack the necessary information and time to use them effectively—some take as long as 72 hours to respond.

Cliché No. 6: High-end clients speak english

Let’s take the budget motel vs the Ritz again as an example: which of the two boasts the most international clientele? Once again, the answer is obvious. And in the current climate of recruitment challenges, are you confident you’ll be able to find someone that can reply in Chinese, Japanese, Arabic, Slovakian or Malaysian? Contrary to popular belief, not everyone on the planet speaks English, and even if they did, they would not necessarily speak it well.

High-end customers will almost always look to communicate in their native language. AI, on the other hand, is language agnostic and can speak whatever language the customer prefers.

Cliché No. 7: Luxury hotels know their clientele inside out 

Ask your reception manager what the most frequently asked question is—chances are they’ll have no idea. If, by some miracle, they can come up with a plausible answer, it won’t be backed up by any hard data. Artificial intelligence, on the other hand, will compile all these requests and will be able to organize them by language and time period. This will allow you to see, for example, the most frequently asked questions from American or Chinese customers, either over time or for a given period. For those willing to study it well and apply it to meet their customer’s needs, this data is of enormous value.

Conclusion 

Even the most seasoned receptionist or concierge, with 30 years of hotel experience under their belt, will at best be able to answer 30% of the questions you throw at them. An AI Hotel chatbot like Velma, based on structured and well-trained data, will be able to answer more than 85% of customer queries. That alone should be enough to convince skeptics. But, to top it all off, the data generated by AI can also be processed to anticipate future needs and therefore constantly keep the hotel’s dataset up to date with new developments. I will cover this topic in a future article, so stay tuned!

Data is King, Data management is King Kong.

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