Michael Caruso

BI and Machine Learning for Hospitality

The hospitality and travel transportation industry are full of software companies providing targeted solutions to solve a specific need or operational problem. Many of the most popular solutions are in the lodging and food and beverage side of the business, such as property management or cruise cabin management systems. The software is designed to manage the overall hotel reservation and guest accounting functions for a hotel. The same can be said for companies that sell point of sale systems. Like a PMS, hotels and cruise lines are required to have a POS to manage F&B guest transactions that feed into the property’s financial and supply chain systems. Rental car agencies merge reservation systems with enterprise level asset and preventive maintenance solutions.

We haven’t seen much innovation or evolution from the top companies that provide these non-guest-facing systems. Maybe a new modern user interface or platform can be hosted in the cloud and be consumed as a SaaS model to operators. But in the way of business intelligence and machine learning, what do these systems deliver to the operators and guests who interact with them before, during and after their stay?

Software companies that design and develop these solutions often get caught up in retail, off-the-rack mentality. They try to build a one-size-fits-all solution that handles the transaction and needs of the mid-level or full-service hotel. These solutions aren’t designed with any type of BI or machine learning mostly due to cost, legacy platforms or product development teams that aren’t involved with new technology platforms and tools that can make these systems smarter to use and deliver analytics to the owners and management team. The exception may be in player tracking and games systems offered by gaming manufactures like IGT, SGI and Konomi. The intelligence in these systems has been in use for over 15 years, designed specifically to know everything about the player and provide offers around targeted promotions and room rates based on their playing trends.

In the hospitality industry, you can find almost any type of point solution to manage the property’s business. As we saw at HITEC 2018 in Houston, these companies compete for the business of hotels, resorts and casino operators in somewhat the same way. These legacy systems have so much data about the guest (PMS, CRES and POS), but yet nothing proactive is being done to enable that information in a new meaningful way through technology. Recently, we’ve seen disruptors from outside of hospitality bringing new and innovative ideas and solutions to operators. These solutions augment legacy systems because companies are committed to buy through enterprise agreements and the guest journey.

AI and BI are gaining focus in mainstream service platforms used by the public. For example, when you shop on Amazon, the item you searched shows up on your browser or 10 similar suggested items you just thought about are emailed to your inbox. If only hotel solutions could have the same level of functionality to alert staff of habits of the guest journey. Much of this functionality exists in solutions the guest uses to shop for hotel rates and availability. Think sites like Expedia, Hotels.com (SynXis by Sabre or BI tools from TravelClick) or just browsing hotels in a popular search engine. But that data doesn’t always get shared with hotel companies, just the final guest booking is pushed into the hotel PMS through a one-way interface to create the booking.

We’ve seen machine learning applied to revenue management systems to compensate for the growth of online travel agency in-room pricing by taking large amounts of complex meaningful data and aggregating it into something rate managers could easily understand. What would AI and machine learning look like integrated into PMS, POS and guest optimization systems that could help both the guest and the staff create a more intuitive stay experience? The first step is understanding the complexity of building AI into existing platforms and how cost prohibitive and time consuming it would be. Also, is there a tangible return on investment for total available market for PMS companies to add AI or bot technologies to their solutions? Machine learning requires a new level of development strategy and resources within these companies.

As most software companies in the hospitality space have outsourced development overseas, they would need to include another level of resources to the roadmap process. Many legacy companies may feel going down this path is too complicated, time consuming and expensive. It’s a process to build out the models, collect “clean” data that can be used to train the program on what is important to the hotelier so that the output is repeatable.

For PMS and POS solutions, as well as sales and catering installed within a larger enterprise environment, connecting this data to the company CRM, loyalty program or player management system is very important. We have entire standards organizations dedicated to making integrations easier and less expensive. For BI and machine learning to be valuable it needs access to guest data – a lot of it – to evaluate booking trends, spend data and even preferences so these elements can be offered up to a guest through the company’s CRES each time they visit. We envision an experience something like Netflix. If you liked Punisher, you’ll love Jessica Jones or even other movies and shows. For hospitality – if you liked the last room you stayed in, you’ll love these hotels with these similar room types in these cities. Developing and delivering this customer experience will be the focal point of solution providers and hotel operators in the coming years.

Courtesy of iStock

We can’t write an article about service-related solutions without mentioning Millennials. This generation makes decisions differently. They spend their money on things that are experiential and focused on themselves. We know they don’t like talking on the phone to make reservations or talking to anyone directly to get something done. This is where the AI solutions can focus and benefit a new generation of traveler. They expect things quickly (think Amazon) or the way Grubhub offers on-property experiences where you can order food when and where you want it and it remember orders, favorite foods and uses suggestive selling. Transportation is another example, where they can go wherever they want quickly by Uber, property van or limo service and at no time have to speak to anyone directly. These data point preferences should be remembered in a property database for access by leadership to analyze trends and proactively market. The leaders in AI and largest market cap companies on the planet today are FANG: Facebook, Amazon, Netflix and Google (Alphabet). They each have the ability to know more about you and what you want than you know about yourself.

Since the legacy hospitality software providers are not yet focused on building machine learning into their legacy platforms, new modern software companies have entered the marketplace offering fringe solutions that can deliver a new guest experience without changing the underlying core solutions. Here are a few BI examples that are worth exploring:

Ivy by Go Moment – This intelligent messaging solution has been delivering chat bots through AI, powered by IBM Watson. It is used in Las Vegas by Caesars Entertainment at Nobu, Caesars Palace and The Linq, installed in more than 10,000 rooms. This solution acts as a digital personal assistant during the guest stay through a mobile or smart device. No download of mobile apps is required. Everything is done through texting with over 30 percent of requests being responded to in one minute or less. Through integrations to enterprise-wide legacy solutions, guests can make dining reservations, book spa appointments, make personal requests and request a copy of their hotel folio when they arrive back home. At HTNEXT this past March, Michael Marino, Chief Experience Officer for Caesars Entertainment, accepted the visionary award for customer innovation for the Ivy deployment. Other notable entries in this area are Glowing.io, an intelligent messaging solution with chat bots and staff alerts as well as integrations into property wide systems and social media messenger services like Facebook and Whatsapp for a streamlined guest experience.

Volara – This is a voice-based solution powered by AWS Echo. Ambient technology has seen the largest surge as hoteliers continue to implement new technology to enhance the in-room guest experience. The adoption was slow at first after some early deployments at Wynn Las Vegas – guests were concerned Alexa was listening in on everything happening in the guest room and recording it for later use. Through Volara’s unique guest-centric experience on the AWS platform using secure MDM along with integrations to enterprise wide systems including HotSoS by Amadeus, guests can make voice requests for almost anything, and Alexa will identify them by name through the PMS and tagging that request to other departments. Through suggestive selling and BI, the Echo device can help drive new revenues by suggestive selling or offering to make dining reservations at the hotels’ restaurants.

Michael Caruso has over 20 years of experience in the casino, resort, hospitality and travel industries. Michael is an entrepreneur, thought leader and trusted advisor helping hotel companies with digital transformation of the guest experience and shifting legacy applications to the cloud. In addition, Michael enjoys working with software companies and contributing strategies that drive meaningful organic sales growth. Previously Michael worked in sales leadership roles managing global business development with Agilysys and Infor. Contact Michael.