AI in Hospitality: Advantages & Use Cases

The hospitality industry is poised for a major overhaul as companies adopt artificial intelligence (AI), with use cases that are as varied as they are valuable to hospitality players large and small. Conversational AI based on natural language processing has spurred the use of chatbots and virtual assistants to quickly answer questions and direct guests to the services they need for an optimal experience. In back-end systems, AI is helping streamline hotel operations and drive revenue management insights. Meanwhile, AI-powered devices and building management telemetry are making it easier than ever for hotels to go green.

In this guide we will examine these use cases and describe the benefits that AI delivers to hospitality companies as they seek to optimize their guest experiences — and their profitability.

What Is AI in Hospitality?

Hospitality firms use AI in a range of contexts that have in common two major threads: bolstering profitability and improving guest services. In their operational systems, AI-enhanced analysis of business intelligence is helping hotel and lodging companies make smarter decisions about fundamental practices like cost management and pricing strategies. In the front of house, AI is helping to improve guest experiences through staff augmentation and automation that speeds up and personalizes services. In addition, many hospitality companies are using AI to help achieve sustainability goals by reducing waste, which also contributes to their bottom lines.

Key Takeaways

• AI adoption and investment in the hospitality industry is expected to increase 60% per year from 2023 to 2033.
• Analytics powered by AI make it possible for hotels to personalize service and guest experiences.
• AI is integral to common hospitality technologies like chatbots and virtual assistants, as well as to upgrades like automated check-in.
• It’s also powering a new generation of smart rooms, energy management systems and waste reduction planning that is helping hotels become more environmentally friendly.
• AI-enabled technologies, such as facial recognition software, surveillance automation and crowd detection systems, are helping hotels improve security.

AI in Hospitality Explained

Analyst estimates show that the market for AI technology in hospitality was approximately $90 million in 2023. But that modest spend is expected to rise rapidly, at a rate of 60% each year, through 2033. What makes this possible is that there is no singular AI for hospitality. Instead, AI is embedded into technology that is spread across the entire hotel business, from the front desk to the back office. Hoteliers are using AI to power virtual assistants, optimize housekeeping scheduling, facilitate real-time translation and help make dynamic pricing decisions, among many other activities. The following are just a few real-world examples of AI in action within the industry:

• Marriott Bonvoy is using AI-powered search to personalize and streamline natural language searches across 140,000 luxury home rental properties served through its Homes & Villas line of business.
• Universal Orlando Resort has started using facial recognition technology to validate identity at park entrances to facilitate contactless entry processes.
• Canadian hospitality firm InnVest Hotels uses AI-enhanced hotel delivery robots across a number of properties to deliver items to guests from the kitchen and front desk.
• Radisson Hotel Group is experimenting with AI to assist its sales to event planners through the use of an immersive “infinity room” that uses sound and light to help planners visualize their event spaces in real time.

Beyond these leading-edge uses for AI in hospitality are a variety of less dramatic but impactful use cases for back-office systems, where AI is being used to help enhance business operations, improve sustainability and reduce security risks. The momentum behind AI is driving increased interest in hospitality: Research shows that 60% of hotels and 70% of travel agencies plan to start using AI.

Advantages of AI in Hospitality

AI in hospitality is poised to reshape the traditional way hotels do business. Here are some of the many ways that AI enhances hospitality operations and value propositions:

• Enhanced customer service: AI-powered technologies strengthen customer service by speeding up interactions, personalizing service offerings and helping businesses maintain a consistent quality of service from booking to check-out. This is vital for hospitality firms, which, in a recent survey, unanimously voted “driving guest loyalty” as the number one business driver for guest-facing technology investments.
• Personalized guest experiences: From customized in-room mood lighting and temperature settings to personalized loyalty rewards, personalization bolsters guest satisfaction and spending, driving higher occupancy rates and repeat stays over time. AI can play a potentially crucial role in enriching hospitality companies’ ability to deliver personalized guest experiences.
• Operational efficiency: Just over half of hotel firms (51%) believe that increased efficiency is the number one way that AI will help reshape hotel operations in the next year. Front office and guest relations are the top departments that hospitality firms are eyeing for AI-related operational efficiency gains. Hoteliers see other traditional areas, such as sales, marketing and general management, as big beneficiaries as well.
• Improved revenue management: Like many other businesses, hospitality companies use AI analytics to bolster their revenue management practices. When fed with a strong body of financial data and historical business intelligence, AI can help guide hotel pricing strategies to maximize occupancy rates, cash flow and profitability, during peak season and off season. AI-based revenue management can also look for opportunities to increase omnichannel sales.
• Data-driven insights: Hospitality firms rank AI for business analytics as one of their industry’s most promising innovative technologies for 2024. Examining business data through the lens of AI can help uncover insights about operations, guest behaviors, seasonal trends and cost management. These insights can be used, for example, to set pricing strategies, forecast demand, and to drive AI-powered automation in systems across the business.
• Enhanced marketing strategies: Hospitality marketing departments bolster their productivity and effectiveness through a combination of AI-enhanced analytics and generative AI content development. AI technology can support more targeted, data-driven marketing. It also can accelerate hotels’ ability to quickly engage in social media and respond to online reviews.
• Security and monitoring: Some 68% of hospitality IT professionals say that improving the physical safety of guests and staff is a top lodging technology initiative for them. AI capabilities can improve the effectiveness of technology like video surveillance and building access through automated functions that can speed detection and send alerts about suspicious behavior.
• Sustainability efforts: AI is an essential element of the smart energy management systems and waste reduction planning activities that have become crucial for hospitality firms to meet their sustainability goals. Effective use of AI can help hotel properties save on energy, cut down on water consumption and reduce their carbon footprint, thus cutting costs and environmental impact.
• Crisis management: Hospitality firms use AI technologies to help them anticipate crisis events, respond quickly and effectively communicate with guests to minimize risk to health and safety. For example, AI can dynamically create content to help hotel firms send personalized mass notifications about weather events that can advise action or evacuation as needed.

27 Use Cases of AI in Hospitality

There is no universal AI for hospitality. Instead, the industry is working to embed AI in every part of its modern digital infrastructure. Here are 27 use cases for AI-powered technology that are rapidly becoming fundamental for hospitality companies today:

1. Chatbots and virtual assistants: Hospitality and travel companies are leading adopters of conversational AI tools. They’re used for booking assistance, handling on-property questions and technical troubleshooting, for example. A recent study found that 70% of guests find chatbots helpful for simple inquiries and tasks, such as check-in, asking for Wi-Fi passwords and scheduling wake-up calls. As AI grows more sophisticated, hotels are banking on the ability of bots to power more complex digital concierge services. Some firms are starting to create brand-associated virtual assistants with different personalities, hoping to enable interactions with guests that lead to emotional connections.
2. Voice-activated devices: Whether through in-room smart speakers, concierge robots at the front desk or smart kiosks scattered across a property, voice-activated devices are on the rise in hospitality. Approximately 40% of hotel leaders say that these devices are also among the most promising innovative technologies for their business in 2024. Backed by AI technology that can answer complex questions, offer recommendations, control settings in rooms and take orders for on-property purchases, voice-activated devices help hospitality firms offer white glove service even when staff are not immediately at hand.
3. AI-powered recommendation systems: Hospitality firms use AI recommendations for personalizing guest experiences. Research shows that approximately 80% of hotels use, or plan to use, AI and data analytics to help them present guests with personalized offers. These predictive recommendations can be incorporated into marketing campaigns tuned to customer segments, used at booking time or on the property. When such tailored recommendations hit the mark with customers, they boost revenue and customer satisfaction.
4. Smart room customization: Some 65% of travelers say they want the technology in their hotel to be cooler than the tech in their homes. So, hotels have amped up their cool factor with AI-enabled smart room customization. Using a combination of motion sensors, intelligent thermostats, voice-enabled devices and smart TVs, hotels equip smart rooms to cater to guest preferences. Smart room technology can optimize settings for lighting, temperature and entertainment offerings. Some luxury smart rooms can even tailor mattress firmness for guests.
5. Smart energy management: Smart energy management systems in hospitality facilities pair up Internet of Things (IoT) telemetry with AI to monitor and automate control over key energy-consuming systems such as heating, air conditioning and lighting. Smart energy management systems can help hotels optimize energy consumption to achieve sustainability goals and save money. They also offer visibility about energy consumption trends to finance and maintenance staff so they can better plan for expenses and preventative repair, respectively.
6. Robotic process automation (RPA): RPA does not require AI, but AI can make use of processes once they are automated to create more sophisticated workflows. Often, hotels struggle to completely automate a process when its workflow spans multiple disconnected systems. RPA does well with repeatable “swivel-chair” processes, such as copying data from one application to another or from multiple different systems to use in messages that are regularly sent to guests. RPA can also play an important role in automatically transferring important information from legacy applications to AI-powered analytics and finance platforms.
7. Pricing and revenue management: Pricing and revenue management are crucial instruments for ensuring that hotels optimize their occupancy rates and profitability, and hospitality firms are using AI technologies to refine them on numerous fronts. Most obvious is the use of AI analytics to crunch real-time financial data and historical trends about occupancy, costs and even weather patterns to power better room pricing recommendations. But AI can also help improve pricing and revenue management for hospitality companies’ many ancillary revenue streams through analysis of data from the different departments and lines of business. Ancillary revenue streams include room service, meeting space rentals, on-site restaurant and bar sales, valet and parking charges, vending machines, spa and massage services, gift shops, in-room minibars and movie rentals, any or all of which a guest may use over the duration of a stay.
8. Maintenance prediction: AI can help hospitality firms stay on top of facilities upkeep through use of predictive maintenance systems. Paired with IoT monitoring of equipment and infrastructure like heating, ventilation and air conditioning systems, technology systems, elevators, vehicle fleets and lighting, predictive AI can alert maintenance staff to potential problems before they become emergency repairs. Predictive AI can also help optimize maintenance scheduling for regular tasks that can keep assets in working order for longer. This helps optimize operations and minimize downtime that could impact guest experience.
9. Facial recognition technology: Hospitality firms are tapping into AI-driven facial recognition technology to bolster their security and access control capabilities. Facial recognition can be used to verify identity upon check-in or in the case of lost room keys, or even for payment authorization. It can be used to identify unruly or troublesome individuals in crowded facilities who have caused issues in the past and need to be escorted off the premises.
10. Surveillance automation: Physical security teams at hospitality facilities can do more with less using the power of AI-enabled surveillance systems. These systems monitor camera feeds, data from smart access systems and even crowd behavior analysis systems to alert staff to potentially disruptive or unlawful activity on the premises. Automated AI-powered surveillance makes it more cost-effective to keep tabs on what’s going on in facilities of all sizes by reducing the amount of staff members needed to monitor cameras over the course of the day.
11. Targeted marketing: A recent survey from Deloitte found that 56% of European hoteliers see generative AI as helping support targeted marketing activities and personalized marketing campaigns. AI analytics play an important role in helping to segment customers, map customer journeys and conduct experiments like A/B testing to chart the effectiveness of different marketing strategies against specific audiences. This can help to increase bookings and repeat stays and can boost guest spending when they are on the property.
12. Sentiment analysis: A combination of natural language processing and other AI-based analytics can help hospitality firms quickly sift through guest feedback and online reviews to pick up on important insights. Sentiment analysis can be used to positively shape future operational processes, personalize guest experiences and optimize review analysis. For the latter, many hospitality companies use AI to help them respond quickly to both positive and negative reviews in order to aggressively manage their online reputation.
13. Virtual tours: Hospitality firms harness the power of AI to create immersive virtual tours that help guests and event customers explore guest rooms, event facilities, restaurants and more, allowing them to confidently plan their stays and experiences. Studies show that 18- to 34-year-olds are 130% more likely to book based on virtual tours. Generative AI can accelerate the cost-effective creation of 360-degree virtual tours. AI also makes it possible to augment virtual tours with real-time updates about various features and locations, and even personalize information based on prior knowledge of a customer.
14. AR for enhanced guest experiences: Hotels and resorts are growing increasingly creative in how they use augmented reality (AR) coupled with AI to enhance guest experiences. AR features built into mobile or digital maps and menus can help bolster engagement and potentially offer advanced features like real-time translations and virtual concierge. Some resorts use AI for gamified experiences, such as treasure hunts that appeal to the young and young-at-heart. And some hotels have even gone so far as to provide interactive experiences showing AR portrayals of famous celebrity guests when a user points their phone at a point of interest on the property.
15. Automated check-ins: Hospitality firms are implementing smart kiosks and mobile apps enhanced with AI chatbots to automate guest check-in. The streamlined process makes it simple and convenient for a guest to verify their identity, obtain room keys (or download electronic keys to their smartphone app) and head to their room without a wait. Automated check-in cuts down on the amount of staff needed at the front desk during peak hours — by up to 50%, according to some estimates.
16. Real-time ID verification: Airlines are the frontrunners in deploying AI for real-time identity verification, but hospitality firms are following fast. AI speeds up the process of scanning ID documents and biometrics to facilitate safe adoption of advanced practices like contactless check-in, keyless entry, digital payments and security assurance.
17. Smart kitchens: Hospitality firms are using a combination of kitchen automation, robotics, IoT and AI software to power a new generation of smart kitchens that can greatly increase the quality, efficiency and consistency of food service operations. Smart kitchens are potential game-changers for on-site quick service restaurants, which can be difficult to staff but which guests depend on.
18. Robot-assisted cooking and delivery: Hotels are not going to replace sous chefs and experienced servers at their fine-dining restaurants anytime soon. But for quick meals and room service, AI-driven cooking and delivery robots are gaining momentum for their cost savings and speed of service. Cooking and delivery robots make it possible for larger facilities to extend room service hours and options, while opening up room service opportunities for smaller hotels that wouldn’t otherwise be able to staff food service operations.
19. Automated cleaning schedules: AI is helping hotels and resorts take their housekeeping capabilities to new levels of efficiency and productivity by coordinating automated cleaning schedules. AI can optimize housekeeping schedules based on real-time data about occupancy levels, guest check-ins and check-outs, preferences guests have offered at the time of booking or at the front desk, and predictive analytics based on historical trends. This can help hotels optimize housekeeping labor, improving not only guest satisfaction but also the employee experience.
20. Robot cleaners: AI-powered robot cleaners are increasingly seeing real-world adoption in hotels. They are augmenting housekeeping staff by performing repeatable and time-consuming tasks so that staff members are free to perform more of the complex tidying that needs human attention. The most widely adopted AI cleaning technology is commercial vacuum and floor scrubbing robots trained on a facility’s floor plan and daily traffic flow.
21. AI-enabled event planning tools: AI is making it easier for event planners to streamline scheduling, logistics management and customer support. Many event planners lean on AI to help them deliver immersive virtual experiences that are aligned with on-site activities. Event planners also use AI to examine data for insights about attendee engagement with event facilities, features and speakers. AI also opens up the potential for valuable added event services, such as real-time content translation and enhanced event security.
22. Crowd management: Larger hospitality establishments — particularly big resorts and events facilities — leverage cameras and AI software to monitor crowd density and space usage. The technology can be used to detect potential fire code violations or even unrest within crowds, sending real-time alerts to facilities personnel before problems escalate. Some solutions even do heat mapping and crowd movement analytics to pick up on facility trends that can inform decisions about staffing and other operational scheduling.
23. Waste reduction: Major hospitality chains are using AI analytics not only to reduce the amount of garbage they send to landfills, but to reduce the amount of food and water that is wasted in the first place. Waste reduction analysis helps hospitality waste-management experts plan out policies that optimize recycling, composting and reuse. Similarly, the tools can analyze waste audit data for opportunities to maximize efficiency and cut costs. On the food services front, waste reduction can help restaurant and beverage managers juggle perishable inventory, cut costs and promote specific items before expiration. These efforts can help support both profitability and sustainability goals.
24. Energy optimization: AI can be used to optimize energy consumption in a number of ways beyond powering smart energy management systems (described in No. 5). AI-enabled analytics that examine consumption data can help hotel managers identify energy-intensive devices and systems that may need to be repaired or refreshed to make them greener. Analytics can also help operations and finance staff examine alternative energy sources and contracts that can make their energy purchases more cost-effective. AI can also play a role in helping to control and maximize the use of on-site renewable energy, minimizing use of energy from the power grid.
25. Personalized rewards: The days of random coupons that knock off a few percentage points here and there to reward frequent stayers has passed. AI makes it possible to tune reward options to a guest’s purchase patterns and preferences. The result is highly personalized perks and offers that are more likely to encourage guests to stay more, spend more and enjoy their experience more in the process. These consistently personalized experiences built on AI foundations can strengthen emotional connections with guests and drive repeat bookings.
26. Predictive loyalty engagement: Rock-solid analytics lie at the heart of every modern loyalty program, so it follows that AI is rising as an essential technology for improving loyalty engagement. Predictive analytics powered by AI can take data about an individual guest’s behavior — or an entire customer segment’s — and plan ways to gently nudge them into booking or spending more with well-timed recommendations. Systems like these could ensure that a loyal guest who sometimes eats at a specific resort restaurant might be offered a free drink for reserving a table upon booking. Or another guest, who frequently stays at a property during concerts or other events, could be automatically sent a package offer for a marquee event.
27. Real-time translation: Hotels and resorts catering to international guests are enhancing guest experiences with real-time translation features across their mobile and on-property digital interfaces. AI has already advanced multilingual content generation. Now, it’s taking translation to the next level — real-time — which diminishes the language barrier during dynamic interactions. This could include on-the-fly translation for booking interfaces and other digital portals, as well as for augmenting in-person interaction between guests and resort staff by running a mobile concierge app that listens and translates while each party speaks.

Simplify Tasks and Uncover Business Insights With NetSuite AI

Hospitality companies can accelerate their AI initiatives by supercharging their business intelligence with NetSuite Artificial Intelligence. NetSuite embeds AI functionality across its full suite of cloud-based enterprise resource planning (ERP) applications for the hospitality industry. Because NetSuite centralizes the data from all functions, its AI systems can more effectively help hospitality managers uncover insights about finances, operational workflows, inventory and much more. This leads to smarter strategies for optimizing occupancy and ancillary revenue streams.

For example, NetSuite Planning and Budgeting applies AI analysis to large data sets to power better predictions about financial performance that could significantly improve hotel revenue management. NetSuite Text Enhance uses generative AI to automate creation and refinement of content for sales emails, service descriptions and purchase orders. These capabilities help hospitality staff improve their productivity and efficiency — and, ultimately, the business’s profitability.

AI is reshaping the hospitality technology landscape with systems that help companies do more with less staff while improving guest experiences. The most visible use cases for AI in hospitality include chatbots and virtual assistants, automated check-in kiosks, robotic delivery and immersive AR experiences on hotel property. But other back-of-house hotel operations are reaping substantial benefits from AI, too. AI assists with streamlining scheduling of food services, optimizing energy usage, enhancing physical security and even helping with crowd management in public spaces.

AI in Hospitality FAQs

Will AI replace hospitality?

No, artificial intelligence will never replace the human touch in hospitality. However, it can augment and speed up guest services.

How big is AI in the hospitality market?

Artificial intelligence in the hospitality market was valued at $90 million in 2023 and is currently expanding at an astonishing annual growth rate of 60%. It is expected to top $8 billion annually by 2033.

What is the downside of AI in the hospitality industry?

One of the perceived downsides of artificial intelligence in hospitality is that it could alienate customers seeking personal connections during their stay. Hotels can mitigate this risk by pairing AI with skilled staff capable of handling complex requests and value-added services.

What is the best AI for the hospitality industry?

One of the most valuable and common applications of artificial intelligence in hospitality today is chatbots and virtual assistants that quickly handle routine guest questions.

How is Hilton using AI?

One of Hilton’s best-known uses of artificial intelligence is to power its robot concierge, Connie. Connie is stationed at Hilton front desks to answer guest questions and provide recommendations for local attractions and restaurants. It can also assist in making reservations.