3 Ways AI Is Transforming the Hospitality Industry

Few industries were hit as hard by the pandemic as the hospitality industry. According to a January 2022 study by the National Restaurant Association, 74 percent of restaurant operators said their business is less profitable now than it was before the beginning of the pandemic, and 63 percent of operators said that their sales volume in 2021 was lower than in 2019.

Employee retention hasn’t gotten any easier either, As workers are leaving the hospitality industry in record numbers. According to new data from the Bureau of Labor Statistics, 5.6 percent of employees in the food services and accommodation industry quit their jobs in April 2022, more than in any other sector.

Artificial intelligence could help hospitality businesses that are understaffed and tight on cash. Several companies now offer AI-based solutions to improve and streamline both guest experiences and back-of-house operations, including inventory and supply chain management, menu optimization, guest profiles, and crowd control.

Here’s how three providers are working to implement AI solutions across the hospitality industry.

1. Streaming data analysis.

CrunchTime, an operations platform founded in 1995, works with restaurant chains of all sizes to simplify operations using AI and machine learning. Clients include industry giants like Dunkin’, Wendy’s, and Shake Shack, along with hundreds of one-location small businesses.

One of the reasons restaurants are ripe for AI implementation is that a single transaction can produce a significant amount of data, such as how many guests are in a restaurant at any given time, what they’re buying, how much they’re buying, and how they bought it, according to CrunchTime founder Bill Bellissimo. Traditionally, all of that data would be recorded and analyzed by the general manager to be used in bookkeeping and inventory management operations, a process typically completed by slowly, manually entering the data into a spreadsheet or on paper. With the advent of machine learning, these tasks can be easily streamlined, leaving restaurant owners with more time to focus on what humans excel at: food and experiences.

“If I told you that you could hire an employee that never takes a day off, works seven days a week, does all of your forecast sales, all your product ordering, all your transmissions of orders to vendors, and all your labor scheduling, you’d say, ‘Wow, that sounds like an amazing employee,'” Bellissimo says. “What we’re doing is taking the back of the house and turning it into a self-driving car.”

2. Personalizing the guest experience.

Cendyn, a hospitality-focused software company, Offers a cloud-based software platform that centralizes data produced by hotels and allows clients to personalize and optimize the guest experience by tailoring interactions and experiences to individual guests. Clients include chains such as Marriott, Hyatt, and Hilton, along with iconic hotels like The Ritz London and Caesar’s Palace in Las Vegas.

Like Bellissimo, Cendyn president and CEO Tim Sullivan sees the typical travel experience as being filled with potentially useful data. From planning and researching a destination to booking, arriving, and departing, “you’re typically interacting with around a dozen different systems, and you’re leaving a tremendous amount of data in your digital wake,” says Sullivan. He adds that in a world made digital by the pandemic, hotels have opportunities to utilize that in small interactions that can be very useful when attempting to build brand loyalty with guests.

“One of my pet peeves is when you go to a hotel where you’ve stayed 50 times before, and the first thing the concierge asks is, ‘Have you stayed with us before?”‘ says Sullivan. To address this, Cendyn developed an application where, once the concierge types in a guest’s name, it grabs their profile and runs an algorithm to determine the three most important things to say to the guest. Sullivan gave the following example: “One: Welcome them back, they’re a Platinum VIP member of the loyalty program. Two: We don’t have a valid email for them on file, secure the email. Three: Offer them a complementary upgrade.”

3. Automating crowd control.

‚ÄčThe Omnico Group, a customer engagement technology company focused on theme parks, casinos, and zoos, provides clients with technology to give operators a full view of each attendee’s journey through their parks in order to boost spending and personalize the customer experience. Clients include Six Flags, Legoland operator Merlin Entertainment, and Dubai Parks and Resorts, the Middle East’s largest theme park destination.

Omnico chief revenue officer Keith Dunphy says that park guests are eager for more personalization in their experiences, as 80 percent of attraction visitors think venues need to do more to win them over, according to an Omnico survey conducted last summer. The survey also found that nearly one in four visitors would be willing to spend more if they receive personalized offers.

One example of that personalization, Dunphy says, is automatically sending guests offers for deals at lower-trafficked restaurants in order to relieve pressure from the more crowded park destinations. He adds that this helps keep guests happy because they feel like they’re getting a good deal and didn’t have to wait a long time to get their food. Employees are also less likely to deal with the issues of running an overcrowded restaurant, such as irate customers and the pressure of serving more people than they are staffed for.

The technology can even be used to adjust pricing. If a theme park is experiencing staff shortages, a widely anticipated issue as parks gear up for the summer season, the park can automatically reduce capacity and increase ticket prices, offsetting the revenue lost from lowered attendance. “And with the reduced crowds, customers are happier and will open their wallets more,” according to Dunphy.

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