The boom in Generative AI usage is making waves in the travel and hospitality industry. We are already witnessing new patterns among tourists, who are already relying on this technology to plan their trips and make the most of their journeys. According to a One Poll study conducted in April 2024, 73% of respondents reported having used or considering using AI for specific travel-related tasks, such as learning more about a destination and finding activities.
At the same time, the turism industry is set to harness and integrate AI into its daily operations. At fifty-five, we have examined how various hospitality players are applying Generative IA technology across accommodation type, clientele, and geographical location. We can already conclude that while AI is set to enhance all aspects of this hospitality industry, from offer design to promotion, its highest value lies in supporting an augmented customer experience.
Below, we break down the major AI trends being deployed in the hospitality sector!
In the hospitality sector, strategizing often revolves around identifying locations, sourcing inventories, analyzing demand, and, of course, applying dynamic pricing through yield management (i.e., differentiated rates based on availability). Our benchmark shows that AI initiatives in the hospitality industry are accelerating across all of these dimensions.
To select where to develop new accommodations of any kind, industry players have traditionally relied on demographic, tourism, and economic data to identify the most promising opportunities. Now, they are developing new analytical capabilities using AI and the potencial of meaching learning, leveraging a broader spectrum of data to multiply analyses. This trend aims to facilitate strategic investment decisions and, crucially, to accelerate decision-making. AI plays a crucial role here, helping to manage structural market trends and smooth out occasional but significant fluctuations, such as the COVID crisis and the subsequent "Revenge Travel" period.
Dynamic pricing models are also becoming more sophisticated, with generative AI providing additional insights, particularly when it comes to competitor pricing. The relevance and accuracy of predictive pricing models are thus enhanced. In that regard, some hospitality players are already using artificial intelligence in hotel management to adjust room availability and rates in real time, based on demand and competition.
Marketing teams are gradually integrating AI to improve activations and budget performance. With AI, establishments and brands can already optimize their media budget allocation every week for more effective campaigns, whether through digital channels, offline methods, or proprietary levers like CRM (Customer Relationship Management). AI helps control the impact of investments on various indicators, such as customer acquisition and generated revenue, allowing for the reallocation of these investments based on strategic priorities.
Two other areas transformed by AI are audience targeting and creative asset production. For targeting, we see the development of automation features based on complex algorithms, such as Google’s "Performance Max." Generative AI also enables the production of more creative assets at lower costs (between €1 to €5 according to our initial analyses).
Thanks to these advancements, hospitality players can avoid investing in hotels with already strong occupancy rates or missed opportunities due to a lack of visibility on digital levers, such as online video.
According to our research, AI-enhanced sales are a reality in hospitality industry. OneOne of the advantages of AI is its ability to optimize conversion rates by offering personalized recommendations (based, of course, on consented data) or relevant alternatives in case of unavailability. And when integrated into booking platforms, chatbots can also facilitate sales by answering customer questions, guiding them through the booking process and providing tailored suggestions.
As with every case presented here, conversational AI tools in hotel industry must be carefully configured to avoid hallucinations, and the data used for their training optimized accordingly.
Enhancing the end-to-end customer experience is the fourth major AI application in the hospitality sector that fifty-five has identified. Integrated into travel agents' technical systems, AI used in hotel industry can assist teams by providing tailored recommendations and automating common request management. This is especially helpful for support teams dealing with a wide range of customer inquiries and requiring precise information on a vast array of accommodation offers and destinations.
During the hotel stay, we also see more and more conversational AI tools like chatbots and virtual assistants taking over from staff to inform customers, offer additional services, and respond to inquiries in real-time. These chatbots assist customers not only during their searches and bookings but throughout their entire stay. After departure, analyzing reviews and comments helps identify trends and areas for improvement, enabling teams to course-correct more quickly to further enhance satisfaction and loyalty.
Finally, AI plays a fundamental role in optimizing hotel management. One of the main benefits of AI here is its predictive maintenance capability: anticipating equipment failures by continuously analyzing data from technical installations (boilers, pool filters, etc.). We also note its application in personnel management, where AI helps optimize schedules based on occupancy forecasts and automates recruitment-related administrative tasks, such as posting job offers. This is a huge advantage for hospitality sectors with significant seasonality, such as outdoor accommodations.
Thanks to these advancements, artificial intelligence technology is emerging as a strong transformational driver for the hospitality industry, promising improvements at nearly every level. Gradual AI integration paves the way for more flexible and responsive management and a better customer experience from start to finish.
However, this integration must remain reasoned, pragmatic, and structured. It should be limited to use cases where genuine added value is evident, as identified in our benchmark; otherwise, AI adoption could be hindered by a perceived faddishness, not to mention the investment of multiple resources for implementation for, ultimately, limited ROI. AI must also be applied in compliance with privacy and data security regulations, as well as the AI Act, and its outputs must be monitored. As with any new technology, integrating AI into existing processes and achieving widespread adoption represents a foundational effort; thus, the advantages and disadvantages must be carefully considered in advance.
While the five application areas described here represent significant opportunities for the hospitality sector, many other AI use cases currently in development promise further advancements — and as models become more intelligent, innovations will continue to emerge.
To learn more about how fifty-five uses its AI expertise to help our clients develop excel, visit our dedicated GenAI page, where you will find our whitepaper co-authored with the Hub Institute, our articles, and our case studies, such as the one conducted with Salomon. If you want to discover how fifty-five can adapt this technology for your business needs, feel free to contact us!
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