Members of the Michigan State University Hospitality Business Real Estate Investment Management advisory council discussed the impacts artificial intelligence, voice interfaces and other technology innovations have on all aspects of the hotel industry.
EAST LANSING, Michigan—Technology and innovation drive conversation around many hotel industry issues, from branding to on-property innovations.
For members of the Michigan State University Hospitality Business Real Estate Investment Management advisory council, that conversation includes hotel real estate, too.
The council met earlier this year for a discussion moderated by Hotel News Now about technology trends facing the hotel industry and the impact those trends will have on future business.
The panel kicked off with a discussion on how council members have noticed technology innovations grow their own profitability or streamline previously onerous tasks in their day-to-day jobs.
“Where we’re starting to spend more of our time is in figuring what we can do in terms of altering some of those mundane tasks that occur in a hotel that aren’t very customer-centric, and how we can use technology to our advantage to help boost up that bottom line,” said Michael Fruin, VP of Sonesta Hotels International.
Many council members agreed that some of the best big-picture technology innovations in hospitality are ones that help them do their own jobs more efficiently, or help guests find their hotels easier.
Josh Smith, SVP of HREC Investment Advisors, said he’s noticed huge changes brought about by technology when it comes to field research.
“We used to be out there knocking on doors, looking at demand generators, talking to city developers, and now I go out there with my iPhone, I can take a picture of a hotel and find five others nearby. I can write up all of my notes and have my CRM interlink with that,” he said. “I have all of it at my fingertips. I can do a valuation model where I write an entire report from my valuation of one property in two pushes of a button.”
Peggy Berg, founder and director of the Castell Project, brought up another technology benefit for hotel development in particular: the advent of satellite navigation on mobile phones.
“Everyone is getting to their destinations, including hotels, via GPS directions anyway, so hotels don’t necessarily need to be on main streets anymore,” she said. “You can be located just off a main street, and within walking distance, but we’re able to be more flexible in site selection than we used to be because of this.”
Humans vs. automation
A lot of discussion centered on the value of human interaction with hotel guests versus the efficiency of automation.
Steven Longstreet, director of Hilton’s Strategy & Innovation Lab, said the company’s lab has done a lot of work developing chatbot functionality that can answer very typical, straightforward guest questions.
“When you think about it, in a call center particularly, people call in to ask a question and approximately 80% of questions are the same—maybe you forgot a password, maybe you need to change a reservation,” he said. Hilton has developed chatbot functionality to a level where automation can answer straightforward questions like those to a guest’s satisfaction, freeing up call-center employees “to focus more on people with more bespoke questions.”
On-property, Hilton employs chatbot functionality to handle simple communications with guests via text, but then immediately transfer the conversation to a person if necessary.
Smith mentioned advancements in the gaming side of the industry, particularly in Las Vegas where artificial intelligence powers many tasks that used to belong to a dealer.
“There is so much AI behind the table now,” he said. “So much of what Vegas used a dealer for can be done now with AI, using holograms and machines.”
While dealer-less gaming tables still haven’t taken over as the majority, Smith said they’ve been well-received and many casinos are adding more.
John Pharr, president of Strand Development Company, said as more and more guests shy away from interacting with people—whether it be at gaming tables or a hotel front desk—hotels need to figure out where their guests actually do need to interact with a person and make that moment count.
“There’s so little interaction now with people, especially in focused-service hotels, so now one of the most important people has become the person who handles breakfast service,” he said. “Guests may not talk to anyone else, even checking in, so how that breakfast person makes the guest feel in the morning is so important. It’s the human interaction.”
Council members weighed the pros and cons of virtual reality in the hotel industry, acknowledging it can be beneficial for tasks like site selection or staff training, but raised concerns about VR-travel taking the place of the real thing.
“Think about virtual reality as a potential competitor to our industry (in the future) when people don’t have to go somewhere to have an experience,” said Jim Anhut, partner with The Passionality Group. “What are we doing to combat that? And conversely, how can we embrace it as an enhanced experience?”
MSU student Brandon Abbo pointed out that one big advantage real experience-driven destinations have over VR is sensory.
“VR right now only captures sight, so it’s not going to capture the smell of the food in your restaurants, or any other sensory experience you’re offering in your hotels,” he said.
Voice interfaces and smart speakers
While many hotel companies have dabbled in smart speaker integration with varied levels of success, most council members agreed that voice-to-text and other voice-command technologies have the most immediate, useful impact right now.
“There are a lot of capabilities we have to sync voice commands to actual functions, like ‘brighten my room’ or ‘darken my room’ commands, but where it becomes a really cool tool from an ownership perspective is when you can sync that technology to an actual reduction in labor,” Fruin said.
He cited roomservice as an example.
“When you’re ordering roomservice, you’re likely not looking to socialize, so let’s get voice technology to marry up with roomservice delivery of a product, or a service being fulfilled without human interaction, which may not be necessary to begin with,” he said.