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Discussing Artificial Intelligence in the European Hotel industry with Dr. Roland Schegg

Wednesday, 15 November 2023
Newsletter digital

In October, you published a study for the HES SO Valais Wallis University focusing on the adoption of Artificial Intelligence (AI) technologies in the European hotel sector. The study indicates a significant disparity in AI adoption across different types of hotels, with chain hotels and luxury properties leading the way. What strategies or approaches can be recommended to encourage Small and Medium-sized Enterprises (SMEs) to embrace AI technology? 

A multi-faceted and comprehensive approach is essential to promote AI integration in SMEs in the hospitality sector. An important element, in my view, is to offer comprehensive training programs to upskill the existing workforce, including management, to enable hotels to manage and use AI tools efficiently, thereby bridging the existing gap in technology resources and expertise. On the strategic front, advocating an incremental adoption strategy is key. By starting with widely adopted AI technologies, such as predictive analytics and customer review feedback analysis, SMEs can immediately begin to improve operational efficiency and enrich the user experience.  

In addition, establishing partnerships with AI technology providers can give SMEs access to customized solutions that are both affordable and less complex, easing the integration process. This, coupled with a customer-centric selection of AI solutions, ensures that the technology aligns with customer expectations for personalized services, giving SMEs a competitive edge in the marketplace. Highlighting such competitive advantages underscores the transformative potential of AI in driving revenue management and customer service excellence. 

According to your study, what will be the greatest challenges facing hoteliers in the adoption of these new technologies? 

The main challenges hoteliers face in adopting new technologies, as highlighted in the study, revolve around several key issues. Firstly, high set-up costs are a significant barrier, particularly for smaller properties that may not have the financial flexibility of larger chains. This financial burden is compounded by the complexity of integrating AI into existing processes and systems, which can be both technically challenging and resource-intensive. Another major hurdle is the lack of in-house technical skills and expertise required to manage and maintain AI-based solutions, a gap that is more pronounced in smaller, independently operated hotels. 

In addition, the research shows that there is some apprehension about the return on investment (ROI) of these technologies, which can hinder decision-making and delay adoption. Concerns about data security and privacy regulations are also a significant challenge, as hotels need to ensure compliance while managing customer data responsibly. 

The study highlights the reluctance in the hospitality industry to adopt new technologies, emphasizing the importance of change management strategies, comprehensive training, and robust support. Could you provide specific examples or recommendations for how the industry can effectively address this reluctance and prepare hoteliers to integrate AI seamlessly into their operations? 

Resistance to change within some organizations may be due to a lack of understanding of the benefits of AI, fear of the unknown or concerns about the impact on employment. Implementing change management workshops, led by experienced experts, is critical to equipping hoteliers with the skills needed to navigate AI adoption. These workshops provide practical roadmaps for managing the human side of technology transitions, aligning staff across all hotel roles with the overarching goals of AI integration. Reinforcing this, sharing success stories from similarly sized hotels that have successfully leveraged AI technologies can provide relatable insights and build confidence in these new tools. Starting with pilots focused on areas such as customer service can provide an insight into the potential of AI, and encourage wider adoption based on proven success. Technology expos and the creation of peer networking groups also play a crucial role, providing hands-on experience with AI tools and a platform for knowledge sharing, which together foster an environment of innovation and collaboration within the industry. 

The study is available online