Imagine having a tireless team member who simultaneously boosts your marketing ROI, converts browsing visitors into booked guests, and delights customers without ever taking a coffee break.
AI for hotels isn’t just another tech trend—it’s the competitive advantage smart hoteliers can’t afford to ignore.
Beyond mere efficiency tweaks, AI transforms the entire hospitality ecosystem by intelligently automating what once consumed countless human hours: managing direct bookings, personalizing guest communications, and even curating the perfect spa package based on a guest’s previous stays.
The result?
Your human talent is freed to do what algorithms can’t: create those memorable moments of genuine connection that turn first-time visitors into loyal brand ambassadors.
In this article, you’ll learn:
- How to use artificial intelligence in your hotel
- The main benefits of AI for hotels
- Challenges to consider
- How the biggest hotel groups successfully integrate AI into their processes
Let’s begin!
What is AI in hospitality?
By now, you’ve probably not only heard of but also tried some AI solutions at work or maybe even in your personal life. But AI in the hotel industry does much more than help plan your weekly meals. It’s software powered by machine learning technology and large language models (LLMs). It learns information about your specific business and uses this data to automate different parts of its workflows.
Things like:
- Routine questions
- Booking confirmations
- Booking/check-in/check-out reminders
- Upselling opportunities
- Event management
- Marketing
And many other processes can be automated using AI agents without the need for supervision from your human agents.
6 Advantages of using AI in hotels
Gone are the days when a handful of your agents had to handle hundreds of customers each day. High call volumes, repetitive inquiries, and long hold times can all be solved with one solution: custom, personalized AI for hotels.
Streamlined customer service
Research estimates that up to 30% of working hours could be automated by 2030, mainly with the help of AI. Technology like AI agents can improve customer service by handling upsells, closing tickets faster, personalizing offerings, dealing with routine queries, and more.
Improved guest experiences
Nothing annoys hotel guests more than listening to hold music and being passed from one service rep to another just to change their check-in time. By using large amounts of data, advanced AI tools can quickly answer FAQs, giving customers the answers they need faster and freeing up time from your support reps.
Across repetitive requests, you also don’t need to worry about the quality of these interactions. Advanced AI systems personalize guest experiences based on their history, preferences, and your hotel’s information to deliver a pleasant and seamless experience for your guests.
Higher conversion rates for direct bookings
Gently encouraging a customer to book a stay after they ask about your pet policy is an art form. It has to be calculated and come at the right time. Not every human agent feels confident about constantly upselling. AI agents, on the other hand, use guided conversations and proactive nudges to drive upsells and package upgrades at the right time and place.
Data-driven insights
AI chatbots not only answer customer questions but also gather data on each interaction. They tell you how long interactions last, what the most common inquiries are, and what the preferred communication channels are. Using unified data, you can make more strategic decisions about your business.
Enhanced marketing strategies
AI helps segment audiences and create targeted campaigns based on past behaviors and common interests, improving ROI on marketing spend. For example, if a guest went on a boat trip organized by your hotel last summer, marketing automation tools can recommend a variety of water sport activities the next time they stay at your hotel.
Fraud detection and security
While most AI use cases are across customer service activities, you can also integrate this technology to detect unusual payment patterns and access behaviors, enhancing security for both your hotel and its guests. For example, Universal Orlando Resort uses facial recognition technology to validate identities at park entrances, increasing security on its premises.
Challenges for using AI in hotels
While AI can make your job 100 times easier, it’s still in the early stages of development and comes with its own set of challenges.
Legacy systems and fragmented data
Older property management systems or siloed databases don’t always integrate easily with modern AI tools. For the best results, AI needs clean, unified data to function properly. Without data centralization, insights are incomplete or inaccurate, limiting the AI’s effectiveness.
For example, if your hotel stores booking data in one system and guest preferences in another, training the AI and personalizing its communication becomes much more difficult because it doesn’t have the full picture.
Over-automation
As many as 58% of customers use chatbots, and 65% use self-service portals, many of them powered by AI. However, relying too much on AI in the hotel industry for guest interactions can reduce the human touch. Your guests may feel frustrated if they can’t reach a human easily. Your human staff might also feel reluctant to use AI tools out of fear of being replaced.
Vice President at mycloud Property Management, Deepak Chauhan, has spoken about this issue. In a LinkedIn article, he shared:
“While AI tools like chatbots and voice assistants can improve efficiency, they often fall short when handling nuanced, emotional, or complex guest interactions. Imagine a loyal guest seeking a highly specific request, only to face frustration because the AI couldn’t grasp their needs. This over-reliance on machines can erode the personal touch that defines exceptional hospitality.”
Finding the balance between using AI for efficiency and over-automating is likely to be one of the main challenges in the hospitality industry in the coming years.
System failures during peak times
Although AI chatbots and call agents reduce call volumes and pressure on your customer service teams, they might slow down during peak times. For example, most hotels see increased bookings during March Break, summer holidays, or the Christmas season. With more bookings come more people asking routine questions and queries.
If systems fail during these crucial times, it can affect check-ins, room assignments, and service requests. For example, a hotel using AI for room key distribution may face delays or outages when large groups check in at the same time.
Bias in AI algorithms
Although this rarely happens, AI models may reinforce stereotypes or unfairly prioritize certain guests or behaviors. People train AI, and unfortunately, the same people can be biased or use incorrect data, causing poor customer service. For example, a loyalty algorithm might favor frequent business travelers and overlook casual leisure guests, even if the latter spend more per stay.
Data security and guest privacy
AI systems train on large data volumes. You need a lot of data to make sure the interactions with guests and agents, as well as the system’s answers, are correct. However, this also raises data privacy concerns. As much as 63% of consumers are concerned about their personal information when it comes to generative AI.
That’s why it’s important to choose AI tools that ensure strong data security and compliance with data protection laws like GDPR, CCPA, PIPEDA, and others.
6 Use cases for AI in hospitality
If you think that the only way to use AI in your business is to have an AI chatbot on your website, we have great news! Automation tools will help your hospitality business:
- Reduce call misrouting
- Upsell extra services
- Further personalize the customer experience
- Streamline the entire booking process from the first hello
Let’s walk through some of the most common examples of artificial intelligence uses in hotels.
1. Call routing
Routing each call through a human agent can be expensive and inefficient. The AI systems we have now can understand natural language and route calls based on the caller’s intent. Instead of using Press 1 for reservations, 2 for front desk…, AI can recognize spoken phrases like:
- “I want to book a room” (this automatically routes to reservations)
- “I need more towels” (this automatically routes to housekeeping)
By using caller history, CRM data, and even time of day, the system can accurately route calls and address guest requests faster. For example, if a VIP guest is calling, the system can automatically route them to the dedicated concierge. If someone calls in the middle of the night, the system connects them with the night desk staff.
A great example of automated call routing is one of our clients, Choice Hotels. They own nearly 7,500 hotels worldwide and deal with thousands of guests daily. While they have human customer support, FAQs on their website, and many guides, they still receive countless calls, messages, and emails from their guests needing basic information like:
- “Can I bring my dog with me?”
- “When is the latest check-in time?”
- “Can I order a tour in the city while staying at your hotel?”
As early adopters of AI technology, they had some hurdles to overcome. From IVAs hearing the wrong information or hanging up on customers altogether, their initial roll-out of AI was frustrating for customers and the Choice Hotels team.
Using Capacity’s AI-powered Virtual Agents, the hotel group was able to deploy reliable conversational AI to its customers. Their hotel group used hotel and location data like property information, FAQs, loyalty programs, customer interactions, and other details to boost agent accuracy and personalization.
In just 8 months, Choice Hotels:
- Saved $1.65M with call routing
- Saved $190K with automation
- Reduced their error rate to 2.6% from 7.6%
2. Booking and reservation management
One of the main use cases for AI tools in hospitality is booking management. AI enhances this process by making it faster, smarter, and more efficient for both guests and hotel staff. You can personalize the booking experience by recommending:
- Room types
- Excursions
- Upsells
- Entertainment
- Wellness treatments
- Dining options
- Packages
All based on a guest’s past behavior and preferences. With AI, guests can book rooms via voice agents and multichannel communication (SMS, WhatsApp, email).
Using AI-powered customer service automation allows you to maintain context when a guest switches channels
Another great example of multichannel reservation management is the Hilton Group and their AI chatbot that helps guests make reservations in seconds.
3. Internal knowledge base
AI systems help not only your guests but also your staff. Your team can quickly access information about hotel policies, events, bookings, etc. AI agents can also communicate with human agents in their native language.
For example, Capacity offers the Capacity Answer Engine®, designed specifically for your internal teams. It can take a long time for your team members to find the right information, but you can’t keep your guests waiting.
The Answer Engine® provides instant answers to specific queries instead of sending documents or links to full articles. For example, if your agent isn’t sure whether checking out after 5 PM is allowed, they can ask the Answer Engine®. The system will provide just the relevant information.
4. Guest recommendation engines
Strategically upselling extra services to your guests is the way to go. Research shows that wellness treatments account for 20.4% of upsell services and generate almost a third of the revenue hotels make. Room upgrades make up 20.2% of all upgrades and generate 23.8% in revenue. However, the success of your offer depends on factors like:
- Offer personalization
- Timing
- Relevance to guest preferences
Based on customer history, AI recommendation engines can suggest the best extras for your guests. They work as part of your overall marketing strategy. However, the use cases don’t end there—there are a lot of ways to use AI for hospitality marketing.
Marriott’s AI-powered recommendation engine is a great example of this. The hotel group uses AI in its Marriott Bonvoy reward program. Their AI-powered search analyzes guest behavior and previous interactions to offer personalized recommendations.
5. Concierge services
Your guests deserve immediate attention and a flawless experience the moment they step into your lobby. Imagine a family of four arriving at the hotel, all tired from their long flight and shuttle ride. The last thing they want to do is wait in line to talk to a concierge to direct them to their room. To speed up customer service, many hotels are experimenting not only with virtual AI concierge systems that can:
- Answer FAQs
- Help with bookings
- Order additional services
But also with AI-powered robots. For example, Hilton has been experimenting with this technology for years. In some of their hotels, instead of waiting in line to talk to a front desk employee, you can go directly to their little robots that can:
- Manage your booking
- Recommend events happening nearby
- Direct you to your room
6. Housekeeping schedules and resource management
AI is also a great help for your housekeeping staff. It integrates with smart room and property management systems to let you know when a guest has checked out or requested service to generate efficient cleaning schedules. On top of that, you can always ensure the right number of housekeeping staff is on duty at the right time, reducing labor costs without sacrificing service quality.
For example, Optii offers an AI-powered housekeeping management system. It maps room attendant routes and helps hotel staff manage their time and responsibilities better.
A different way to use AI to keep your hotel spotless is through AI-powered robotics. One of Canada’s biggest hotel owners, InnVest Hotels, recently partnered with Tailos Robotics, an AI-powered cleaning solutions provider. They use robotic vacuum cleaners to help staff clean rooms and avoid related wrist injuries.
Grow your hospitality business with AI
AI for hotels is much more than automated messages. It brings omnichannel communication and automation to every part of your business. More and more hotels are integrating AI into their:
- Booking management
- Concierge services
- Customer experience personalization
- Staff training
- Housekeeping
By automating these processes, businesses save millions, reduce the stress on their human staff, and improve the customer experience.
If that sounds like something you’d like to explore in your company, we invite you to try our advanced omnichannel AI support software for hospitality. We work with companies like yours to:
- Streamline reservations
- Answer property-specific FAQs
- Route guests correctly
- Boost upsell opportunities
Sounds good? Book a demo!
Increase agent efficiency with AI
FAQs
AI can’t take over hospitality because the heart of the business is a human connection. Many hospitality functions still need a human touch and attention, and this will remain true for many years to come. However, many jobs can be eased with automation to make your team’s job easier and improve the customer experience.
AI automation tools are as powerful and efficient as the people using them. Your hotel still needs human managers who can assist customers and help solve more complex cases. However, AI can help take a big workload off their shoulders and remove roadblocks.
Hilton uses AI in many different business workflows. For example, they use an AI concierge named Connie to interact with guests, answer questions about hotel amenities, recommend local attractions, and provide directions. They also use machine learning to analyze guest preferences and behavior to personalize services. The hotel group assists with booking management and routine inquiries using AI-powered chatbots.
Marriott uses AI in both internal and external hotel processes. For example, they use AI-driven platforms to manage pricing and business operations. They also use AI in their Marriott Bonvoy loyalty program to personalize recommendations. Marriott employs AI chatbots via its mobile app and platforms like Facebook Messenger to handle customer inquiries, bookings, and service requests quickly.
AI for hotels offers many advantages, including:
– Streamlined routine procedures and questions
– Automated booking management
– Personalized upselling recommendations
– Increased revenue
– Higher conversion rates from direct bookings
Any job that needs a human touch won’t be replaced by AI any time soon. In the near future, automation is likely to replace manual and repetitive processes, making the work of hotel employees easier.