AI in Hospitality: Why Middle and Small Businesses Can’t Afford to Be Left Behind

How Artificial Intelligence is Transforming Operations and Enhancing Guest Experiences—And Why Middle and Smaller Players Must Join the Revolution!

AI in Hospitality

Throughout history, great empires have often fallen when they stopped innovating. Every time they were at their peak, they held the edge of new discoveries that kept them ahead. But when they failed to keep up with change, they slowly crumbled. This isn’t just ancient history; we’ve seen it play out in modern times too. Blockbuster fell to streaming, and the whale oil industry vanished when petroleum came around. Whenever a powerful new technology emerges, it transforms the game, and only those who adapt quickly stay in the lead.

Today, we’re at a similar crossroads with Artificial Intelligence (AI), a tool that redefines industries everywhere, including hospitality. AI may seem like a distant fit for an industry centered on people and personal experiences. However, AI can enhance what makes hospitality unique, especially in finance operations and back-office areas. Big companies already see the potential, but middle and small businesses still lag. This is a chance for them to stay competitive and relevant without losing the “human connection” at the heart of hospitality.

The Hospitality Experience: Built on Connection, But Held Up by Operations

In hospitality, guests often remember the little things: when a staff member remembers their favorite drink or greets them by name. These small moments of connection make people feel valued and cared for, and they’re a core part of what makes hospitality unique.

But for every guest experience moment, there’s an entire network of tasks happening behind the scenes—finance, housekeeping, maintenance, inventory management, and other back-office areas. These are the “back-of-the-house” functions, and while they don’t get as much attention, they’re essential to keeping everything running smoothly. AI can support these roles, not by replacing people but by making their work more efficient and focused, freeing them to create even better guest experiences.

AI in Hospitality and in Finance: A Shift from Manual Tasks to Meaningful Insights

In finance teams across industries, including hospitality, professionals often spend more time compiling data than analyzing trends. AI can enhance data collection and generate insights, helping teams make informed decisions and improving operations. Embracing this technology can drive positive changes enhancing front office teams to be more assertive with guests.

Imagine AI tools enhancing data reconciliation, allowing finance teams to focus on what matters! By collaborating with operations, they can improve performance tracking, drive new projects, and uncover valuable trends, making teamwork more impactful and exciting! This collaboration allows the finance team to serve as a real partner in improving the guest experience, helping identify what works and what doesn’t, without getting buried in the numbers.

Making Operations Smoother with AI

AI is already proving its value in improving hotel operations. A recent McKinsey report noted that companies using AI see big gains in cost savings and operational speed. In hotels, AI can optimize housekeeping schedules by analyzing guest check-in/check-out times, ensuring that rooms are cleaned exactly when they need to be, reducing downtime for staff.

AI also helps in inventory management by predicting stock needs, avoiding the trap of overstocking while making sure that essentials are always on hand. As Forbes highlighted, AI-driven insights can be used to allocate resources to high-traffic areas, which reduces employee strain and makes for a better guest experience.

AI-Powered Maintenance: Moving from Flat Schedules to Real-Time Needs

Maintenance is another area where AI can be a game-changer. Traditionally, maintenance has followed a strict schedule based on manufacturer guidelines. However, AI can take it a step further by analyzing real-time data on how often and how intensely each machine is used. This allows for predictive maintenance, servicing equipment when it’s genuinely needed, based on actual usage rather than a fixed timeline.

This isn’t just about preventing breakdowns; it’s about maximizing the life of each machine and minimizing unnecessary repairs. A machine that runs constantly at high capacity has very different maintenance needs from one that runs a few hours a day. With AI, hotels can develop maintenance schedules that reflect these differences, making the most of their resources and reducing the chances of unexpected issues that disrupt service.

Enhancing the Guest Journey with AI

The guest experience doesn’t start or end at the front desk. AI is helping hotels tailor every part of a guest’s journey, from personalized booking recommendations to in-room amenities. AccorHotels, for example, uses AI to analyze guest preferences and booking histories, creating unique offers that boost engagement and loyalty. Then there’s Hilton’s AI concierge, Connie, and The Cosmopolitan’s chatbot, Rose, which allows guests to get recommendations, make reservations, and get help on demand.

A NetSuite study also shows how AI tools improve customer service through instant responses to questions and requests. These chatbots handle basic inquiries, freeing human staff to focus on meaningful interactions with guests. AI even scans guest feedback, giving hotels a clearer picture of what they’re doing well and where they can improve, fostering an experience that makes guests feel valued and understood.

Looking Ahead: AI’s Role in Sustainability, Security, and Innovation

AI’s potential for hospitality goes far beyond what we’re seeing now. As Forbes notes, future innovations could include predictive room service and VR hotel tours, letting guests experience a property before they book. AI can even help hotels reduce their carbon footprint by optimizing energy use and tracking water consumption, aligning with sustainability goals that are increasingly important to guests.

Security is another area where AI shows promise, with systems that can monitor suspicious activity and quickly alert staff. This is about creating safer, more sustainable, and more enjoyable environments for guests. Essentially, using AI to support the core values of hospitality.

A Call to Action for Middle and Small Hospitality Businesses

While large hotel chains are embracing AI, middle and small businesses are still on the sidelines, often held back by budget limitations or a lack of awareness. But as history has shown, ignoring innovation is a dangerous game. AI is not just for large corporations, it’s a practical tool that any business can use to improve efficiency, control costs, and, most importantly, provide a memorable guest experience.

In today’s world, AI isn’t a luxury; it’s becoming a necessity. Small and medium-sized businesses have an opportunity to use AI not only to boost profits but to enhance the well-being of their employees and the satisfaction of their guests.

Conclusion: Adapting to Remain Relevant

The hospitality industry will always be about providing the best guest experience. AI won’t replace the warm interactions that define a memorable stay, but it can empower those interactions by making the “back-of-the-house” more efficient. From finance to maintenance, AI can streamline operations and ensure that staff have the time and resources they need to focus on what really matters—the guest experience!

History has shown us what happens to those who ignore innovation. Hospitality stands at a pivotal point: embrace AI to stay competitive or risk being left behind. Now is the time to ride the wave of technology, keeping the best of what hospitality has to offer while building a stronger, more resilient future.

References

Forbes - Sahota, N. (2024, March 7). AI in hospitality: Elevating the hotel guest experience through innovation. Forbes. https://www.forbes.com/sites/neilsahota/2024/03/06/ai-in-hospitality-elevating-the-hotel-guest-experience-through-innovation/

McKinsey & Company - Alex Singla, Alexander Sukharevsky, Lareina Yee, Michael Chui and Bryce Hall. (2024, May 30). The state of AI in early 2024: Gen AI adoption spikes and starts to generate value. McKinsey & Company. https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-state-of-ai

Netsuite - Lisa Schwarz. (2024, September 5). AI in Hospitality: Advantages & Use Cases. https://www.netsuite.com/portal/resource/articles/business-strategy/ai-hospitality.shtml. https://www.netsuite.com/portal/resource/articles/business-strategy