Hotel Execs Say Artificial Intelligence Will Provide Efficiencies, Not Replace Human Element
NEW YORK — While the hotel industry continues to grapple with how and where to employ artificial intelligence for greater efficiency, hotel executives said human-to-human interactions will remain a priority and at the forefront of the industry.
Speaking at the “Aligning Stakeholder Objectives to Power Performance” session of the 2024 NYU International Hospitality Industry Investment Conference, PM Hotel Group President Joseph Bojanowski said technology will be key in taking the more mundane tasks off the plate of hotel employees.
“Whether that technology is robotics, machine learning or artificial intelligence, our first target is highly repetitive tasks or transactions to move those into technology,” he said.
For the time being, at least, MCR Hotels Chairman and CEO Tyler Morse said artificial intelligence is all talk.
“Nobody’s actually using it,” he said. “Everybody’s been on ChatGPT and checked it out, and it was a fun parlor game. But it’s not actually being executed or implemented in hotels. We are a people-based business. Most of our team members are interacting with customers.”
But Greg Friedman, managing principal and CEO of Peachtree Group, said AI will have to be utilized in hotels in order to manage labor costs.
“I hear Tyler’s comment because it’s a people business, too, but at some level, we can find efficiencies in staffing and really just provide a better experience to guests,” he said. “When you look into the future, AI is going to be here a lot quicker than 10 or 20 years. All of these tech companies are going to invest capital and find ways to disrupt services and provide software more efficiently.”
Pyramid Hotel Group President and CEO Warren Fields said hoteliers can’t let AI take over their businesses broadly, but it will clearly have a place in practices such as accounting and billing.
“Anything where you have data input by a human, you ought to be able to have that done from some sort of technology,” he said. Fields added the guest-facing part of the business should always be built around human-to-human interactions.
Craig Smith, CEO of Aimbridge Hospitality, said he rolls his eyes when he hears implications that “AI is a solution for everything in the hotel industry,” but he believes there are clear use cases.
“You think about [online training] or predictive modeling for predictive scheduling, I think that will improve over time,” he said. “I think with revenue management, as great as we think we are as an industry with revenue management, I think there’s a thousand miles that we can go, and I think that AI — maybe not the AI you’ll see with Apple but a more JV version of AI — is going to help with that.”
While making a point about how smaller hotel companies sometimes misconstrue the power of brands and how consumers relate to them, Morse sparked a pretty direct conflict among panelists when he said that “at the end of the day, the asset that we’re all selling is a bed and a shower.”
Fields took exception to that, saying the hotel industry is increasingly focused on selling experiences and hotel stays are meaningful occasions for many guests.
“Those are the types of things that are why we’re in this business,” he said. “It’s not to sell beds and showers. We’re selling fun.”
Morse said he didn’t disagree with that, but he feels like the hotel industry sometimes values style over substance.
“Lifestyle hotels are like taking some jeans, cutting a rip in them, throwing some paint on them and saying they’re no longer pants,” he said. “They’re still pants. They just have a hole in them.”
Fields said the two would have to “agree to disagree.”
“All of the lifestyle hotels we have are awesome,” he said. “We have all [sorts of experiences]. We have treehouses. They’re not just pants.”
