How AI is Redefining Travel & Hospitality in 2024 and Beyond

Sector: Digital Product, Future Tech

Author: Nisarg Mehta

Date Published: 06/04/2024

Travel & Hospitality in 2024

The Artificial Intelligence (AI) revolution is here. It is disrupting every sector in the world and hospitality and travel are not an exception. The impact of AI on these sectors is massive and transformative for the way operations are carried out and the engagement with customers.

Based on the latest report by Oracle, travel and tourism may reach $8.6 Trillion by 2025​​. This growth has a significant contribution from technology and AI will play a vital role in this trend. There soon will be a world where services are tailored to individuals, efficient, and secure.

Let’s explore how AI will redefine travel and hospitality.

AI’s Role in Travel & Hospitality in 2024 and Future

From guest experiences to revenue optimization, AI has a big role to play in hospitality and travel.

Ai impact on Travel & Hospitality - 2024-min

1. Personalized Services

AI is revolutionizing the hotel experience by offering tailored services based on guest’s interests. Hotels now adopt AI to analyze data to forecast people’s needs and provide them with personalized suggestions and services.

Artificial Intelligence-powered personalization is relevant to each step of the guest journey. For instance, AI can recommend activities based on the past choices of the guests to maintain the uniqueness of every visit.

In fact, 51.48% of hotel executives are interested in using AI for personalized marketing and offers. 3% will use it for personalization of customer experiences.

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2. Contactless and Convenient Solutions

The popularity of contactless solutions has increased significantly, particularly due to COVID-19. Today’s hotel visitors want as little physical interaction as possible during their visit, from registration to checkout. AI allows hotels to implement contactless check-in/check-out, contactless payments, and mobile guest services.

Close to two-thirds of hospitality managers globally think a fully contactless experience will be the norm in three years’ time.

Mobile apps and texting enable guests to order services and get answers to questions in a convenient way. 29% of travelers are highly interested in hotels that use chatbots for communication​​. This is another convenience that adds to the overall satisfaction of the guest.

3. Automation in Hotel Operations

AI increases the productivity of hotels by eliminating monotonous jobs. Room service, housekeeping, and maintenance are just a few of the ways AI can help. In this way, the AI frees up staff time to spend more time engaging with the guests.

For instance, automated systems can deal with requests such as “I need more towels” without talking to the front desk or housekeeping managers. This direct communication makes work easier for the staff and makes response faster. It is estimated that implementing an automated system for these simple requests can reduce staff hours by 60-80 % so that the staff can focus on personal service.

4. Addressing Labor Shortages

Labor shortages continue to affect the hospitality industry, especially since the COVID-19 pandemic. These challenges can be solved by AI and automation because they address the gap in the workforce. Applications such as self-check-ins, conversational AI, and mobile services alleviate pressure on staff.

A staggering 57% of hotel executives are already planning on integrating mobile technologies for the front desk processes. Contactless technologies by 1 percent and automated messaging services by 32 percent. These innovations not only increase efficiency but also make the hospitality industry more attractive to workers as they require less work and more interaction with the guests.

5. Leveraging Predictive Analytics

Predictive analytics powered by artificial intelligence is essential in decision-making for a hotel. AI can predict demand and calculate prices based on mountains of data. For example, AI can determine what days are likely to be busy and set the room rates high so as to optimize the revenue that is generated. This enables hotels to stay ahead of the curve in meeting the needs of the market efficiently.

Predictive analytics also assists in targeted marketing. Hotels can target the right customers if they understand their preferences and habits and hence ensure that they generate more bookings. The report by Oracle indicates that 51%, nearly half of hotel executives expect to use AI to target guests with personalized marketing and offers by 2022. Moreover, 48.3% will use it for customized customer experience.

6. Enhancing Data Security

Data security is a major issue in the hospitality industry since hotels gather a lot of personal information. AI boosts data security as it offers high-level security. Cloud computing solutions facilitate secure data management to prevent breaches of guests’ private information. Over 90% of the hotel managers have invested or are planning to invest in the cloud to enhance data security.

AI also ensures real-time monitoring and threat detection; it helps to check and counter threats as soon as they emerge. This active approach to data security guarantees the security of the data provided by the guests and builds their trust in the hotel’s ability to protect their information.

7. Virtual and Augmented Reality

Virtual Reality (VR) and Augmented Reality (AR) are new trends that are being incorporated into hotels to assist in engaging guests. These technologies provide high levels of immersion that can change the way guests interact with hotel services. For instance, guests can view images and videos of rooms and services which will help them have a deeper understanding of what to expect.

The interest in VR and AR is rising not only among travelers but also among hoteliers. The report says that over one-third of travelers want to see the hotel they are booking in VR and more than 40 percent of hoteliers are either creating virtual maps or plan to do so within the next year.

Nevertheless, there are challenges surrounding the practical application of VR and AR. For example, it is vital that these virtual experiences be accessible and easy to use. Event organizers that use VR for conferences have to focus on the safety of participants and the facilitation of movement in virtual space. It is predicted that as the technology develops it will have a more prominent role in the hospitality industry.

8. AI-Driven Communication

Artificial intelligence-based communication technologies are changing the way guests communicate. These tools are available around the clock to address guest’s concerns and requests. For example, a guest can request more towels or enquire about places to visit in town without having to call or physically go to the front desk.

About one-third of travelers are very interested in using hotels that use automated messaging for most of their customer service needs and half of them are somewhat interested depending on the customer service need​​. It implies that they prefer to communicate with AI because it is convenient and efficient.

Hoteliers are beginning to recognize this trend. More than 50% of the executives surveyed have already automated or are planning to pilot automated messaging platforms​​. Such systems also facilitate quick and efficient service for guests while also freeing staff to engage in the higher-value interactions that require more of their time.

9. Unbundling Services

Unbundling is one of the ways in which AI contributes to revenue optimization. It enables hotels to charge consumers only for facilities used, hence providing more customized and efficient packages. For instance, rather than charging guests a room rate that covers a variety of services, hotels can offer pay-for-perks like gym access, faster internet speeds, or late checkout.

The report notes that about 89% of consumers either enthuse or are receptive to the idea of unbundling. Specifically, 44.2% of consumers would be somewhat likely and 43.3% would be very likely to book a hotel where they don’t pay for the amenities that they don’t use.

Hotels that have embraced this model have benefited. For instance, the proportion of hoteliers who strongly agreed that non-room revenue would become an increasingly larger proportion of their revenue more than doubled from 2021 to 2022. In addition, 49% of executives consider special amenities and upgrades as a necessary element of their revenue strategy.

10. Dynamic Pricing Models

AI allows increasing room rates based on demand and other market conditions. This approach helps to ensure that hotels are able to get the most revenue out of each booking by setting the correct price for that booking. For example, it can increase room rates during high travel seasons or other events when demand is high and vice versa.

Dynamic pricing is another application of AI that is on the rise. AI allows hotels to make accurate rate predictions based on booking patterns, market trends, and competitor pricing. This is a proactive pricing strategy that allows hotels to maintain their competitiveness and maximize their earnings at the same time.

Hotels that employ AI for dynamic pricing have noted that their occupancy rates and ADR have significantly improved. This technology enables hotels to adopt strategies that can respond to every emerging trend in the market and capture more revenue.

AI will Be the Frontier of Technology for Hospitality and Travel

Self-service capabilities and mobile apps meet the needs of today’s travelers and make their experience smooth. AI enhances operational efficiency through task simplification and combating labor shortages to attract workers to the industry. Business intelligence and improved privacy help improve decision-making.

Virtual reality, augmented reality, and artificial intelligence facilitated interactions with guests and provided profound experiences. AI also significantly contributes to revenue management by enabling the unbundling of services and the use of dynamic pricing techniques that provide personalized offers and real-time pricing.

Adopting AI means that the hospitality sector remains relevant, delivers on the needs of the guests, and facilitates development. With the help of AI, the industry can ensure a bright future with meaningful experiences for customers and employees.

If you want to implement AI into your business, Techtic can help you. We, at Techtic, can assist your business in creating AI-powered solutions and ensure that your guests receive exceptional experiences. Reach out to Techtic today to learn how they can help your business achieve success.

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