In recent months, we’ve witnessed the tremendous potential of Generative AI (GenAI) to transform how we process information. It’s becoming increasingly clear that we’re on the cusp of another technology revolution.
As exciting as the latest GenAI tools are, technology leaders in the hospitality industry are being intentional with how to deploy them. This approach makes abundant sense given the tremendous opportunity in front of them. GenAI offers the potential to drive productivity in operations and streamline administrative workflows, enhance access to data and insights, and yield better and more timely decisions. It can also improve customer interactions and experiences, expand employees’ knowledge and capabilities, and generate new revenue opportunities.
Of course, caution is also warranted due to the complexities of putting GenAI to work. Data needs to be generated and accessed in the ways GenAI engines require. There are legal and reputational risks if something goes wrong. Then there’s the brisk pace of change involved. Every week seems to bring a new GenAI-fueled solution, which not only complicates build-versus-buy decisions but also raises the risk of sunk costs.
The Future of Travel
All this needs to be carefully considered as hospitality companies design and activate AI solutions to maximize their value. And time is of the essence.
A report we recently published at Deloitte – Facing travel’s future – covers the myriad demographic shifts that are changing how travelers plan and shop for their trips. As boomers will age out of frequent travel in the next decade and millennials and members of Gen Z take their place, social media is becoming an increasingly popular trip planning tool. In addition, younger generations are far more likely to make plans for themselves, take shorter trips, and work on their vacations.
The changing nature of those who travel is positioning GenAI as a major source of disruption – and an opportunity to unlock new ways for travelers and travel brands to interact. GenAI agents could make travel search and booking in its current form irrelevant in the years ahead. It’s not much of a stretch to think that someday soon, GenAI-powered solutions could:
- Analyze travelers’ data to deliver more frequent and more personalized concierge services
- Enable properties to tailor their loyalty programs during a traveler’s stay to offer them opportunistic deals
- Handle post-trip feedback to generate more accurate recommendations for improving operations and future investments
Bringing the Future Forward
While some of these applications might still be years away, hospitality leaders can begin to take steps now to build a solid foundation for GenAI deployments:
Focus on outcomes
Start by identifying the business outcomes you want to drive using GenAI. There is a temptation to focus on infrequent or complex issues, but GenAI will likely achieve the best ROI when it’s part of a comprehensive, portfolio approach that targets benefits over the short, medium, and long-term.
Think about grouping potential GenAI applications into three buckets:
- General productivity: Increasing employee productivity by placing GenAI tools at their fingertips, empowering them to innovate
- Domain-specific: Solving individual functions’ key business challenges by addressing single-use cases that change processes and the nature of work; and
- Transformative: Reimagining a specific area of the core business by combining several high-priority use cases and creating a new end to end AI-powered new way of working.
Build your foundation
Adopting an enterprise mindset will help ensure you’re achieving high ROI and prevent cost considerations from complicating potential applications in the future.
To facilitate this, build a foundational architecture that is supported by a specific business case, but one that is fluid and flexible enough that it can be adapted to evolving business needs and rapid technological innovation. Ensure you have adequate guardrails to navigate the complicated vendor environment and regulatory environment.
Condition your data
The vast amounts of information contained in IT systems must be made accessible for GenAI applications. Each sector of the hospitality industry is contending with legacy systems that can thwart nimble innovation. Addressing this issue will require an effective data strategy that includes a thorough analysis of the data infrastructure, understanding how and where data is collected, and creating a plan for data clean-up so that it’s usable.
If the models are trained effectively, the GenAI solutions should ultimately enhance data collection, transparency, and maintenance going forward.
Prepare your workforce
There is widescale worry among workers about being replaced by AI, but most uses across industries so far suggest AI will be a job enhancer for many. Technology leaders should create effective channels for delivering efficient training, communicating the benefits, and incentivizing adoption.
Upskilling your workforce should be another priority, as it will help deploy GenAI solutions to not only deliver the outcomes you seek but also help build trust among your people and set appropriate expectations for performance.
Just the Beginning
As technology leaders in the hospitality industry test use cases for GenAI, there’s a risk that they can get stuck in experimentation mode. As your team works through the formative steps above, it’s important to always keep your eyes on the prize by focusing on approaches that enable your organization to scale GenAI so it can be truly transformative.
About the Author
Matt Usdin serves as the US hospitality leader at Deloitte. In this role he harnesses Deloitte’s industry insights and unmatched depth and breadth of capabilities to help Deloitte’s hospitality clients solve complex business issues. He previously led Deloitte’s US Restructuring and Value Creation Services Practice as well as the US and Global Human Capital M&A practices. He has significant experience leading clients through organizational transformations, and merger Integration and divestiture programs.
