Unless you are an expert, you might wonder – what is AI? When people think of artificial intelligence, they imagine machines that think like humans. At some point, these machines become humanity’s enemy. While it makes the stuff of great action movies, this is quite far from reality.
- AI applications are unlikely to rebel against humans.
- AI is the steam engine of the 21st century.
- Hotel businesses can already benefit from concrete applications of AI.
Solving humanity problems one by one with mechanical brains and bird trains
So what is AI exactly? We use the term Artificial Intelligence to define all systems that demonstrate at least some resemblance to the behaviors observed in intelligent living species. These would include learning, reasoning, knowledge representation, perception, etc. So, any technology that is even remotely reminiscent of a form of intelligence can be called AI.
Just like this train is inspired by this bird’s beak, AI is inspired by our brains. However, as you can see, the source of inspiration and the end product can be quite different.
Usually, we don’t replicate the things we see in nature for no reason. We do it because we need to solve specific challenges. Take, for instance, the beak of the bird. It solves an aerodynamics problem and helps make faster trains. In the same way, there are several specific kinds of AI that help us solve a variety of issues. Like analyzing data (big data) or making brands better at engaging and selling to customers (chatbots).
Our kind of intelligence is called ‘general’ because we can apply our abilities to whatever we want. However, when you build an AI, it is always for a very specific purpose. I sell chatbots for hotels and these chatbots are very good at interacting and selling rooms on hotel websites.
My chatbots are not useful for anything else and never will be. And because that wouldn’t be useful for my customers, they wouldn’t buy it. This is basic business logic shared across industries: The more you focus on the specific problem you’re trying to solve, the better you get at it and the easier it is to sell your product and keep your company afloat. So, in answer to the question, what is AI, you could also say that AI is a tool and nothing else.
AI is the steam engine of the 21st century
While the 19th and 20th centuries were marked by industrial revolutions, the 21st century corresponds to the information revolution. The main source of value creation is moving from material goods to data. Just like we need machines to create things more efficiently, computers can help us manage information. That’s what Artificial Intelligence is about.
The first industrial machines were expensive and only a small group of entrepreneurs could buy them. Ultimately, however, they became cheaper and massively available. The same process is happening with AI. Big corporates such as Google, Facebook, Booking.com or Amazon have been leveraging AI for a while. Now, AI resources are also available to smaller businesses such as independent hotels.
Some entrepreneurs didn’t realize that industrial machines were the best business opportunity of their time. They failed to adapt and went out of business. Don’t make the same mistake. Artificial Intelligence is already everywhere and improving quickly.
This morning I began an email and Google was finishing my sentences using my writing patterns. Amazon is able to understand a customer’s desire and send them the right recommendation for their next purchase. Booking.com is able to engage guests thanks to its chatbot assistant.
AI is happening now. I wonder how long it will take for smaller and medium businesses to wake up. People are not going to stop using Google, Booking.com, and Amazon. So how will you keep up?
How do hotels leverage AI today?
Big corporates like Accor are able to be at the forefront and invest in avant-garde projects such as voice-enabled assistants. Smaller hotel businesses, on the other hand, must focus on technologies that bring concrete value to their business today. Here are some of the first AI applications that generate massive ROI for hotels today.
- Chatbots are usually the first thing that comes to mind when thinking about AI applications in hospitality. Chatbots can help you engage guests individually before they book and handle frequent questions & requests automatically. This enables you to capture hesitant customers easily and increase direct bookings. Sometimes, the chatbot won’t be able to handle the full conversation. But that is OK because a good chatbot will always at least capture the customer’s name, contact details, and desire, and share the info with you so that you close the deal.
- Booking Engines have been around for years. Their services are shared among so many hotels that they can leverage big data to constantly reinvent themselves and drive conversion – and it works. Avvio has been perfecting this technology in the last few years and is able to offer a 25% guaranteed increase in your hotel direct booking. If you’re thinking about a new booking engine, it might make sense to look them up
- Revenue Management has been a pain in the neck for hoteliers for years and most of them are still deciding their pricing manually, based on last year’s data. This makes no sense in an age where customers change behavior very fast and can purchase your product at any time, day and night. Some companies such as Pace. Travel automate pricing decision with AI algorithms able to make automated price optimizations based on the real-time pace of your pickup. Find them here: Pace revenue
Now, when you think, what is AI, you will know that it is no longer the stuff of science fiction but an essential tool for companies to build a competitive advantage in the era of information. Big corporates across industries have already embraced it and there is no way back. The winning strategy for independent hotels is to start leveraging AI components in their organization step by step, starting with tools that can provide ROI quickly and grow from there.