Generative AI in Marketing: How Can Hotels Leverage It Without Losing the Human Touch
Photo by: Discovery Hospitality
Artificial intelligence, particularly generative AI, has advanced significantly in recent years. Gone are the days when AI was only associated with robots and science fiction. Nowadays, businesses across various industries are using AI to improve their processes and enhance customer experience.
One area where AI is making a considerable impact is marketing. Businesses are persistently seeking innovative methods to differentiate themselves and engage with their customers in more meaningful ways. And generative AI is helping them achieve just that, enabling a level of personalization that was once unimaginable.
The key challenge, however, lies in blending these advanced capabilities with the genuine human touch, which is what truly defines hospitality.
What is Generative AI
Before discussing its marketing applications, it's important to understand generative AI. This type of artificial intelligence uses algorithms and machine learning to produce new content from existing data.
Traditionally, AI has been used for tasks such as data analysis and automation. However, generative AI takes a step further by creating new content, making it an ideal tool for creative industries like marketing.
AI's Impact on the Asian Hospitality Market
"The Asian market is a hotbed for AI innovation, and hospitality is no exception," observes Katrin Goetzke, Founder of AI Hotel Marketing.
"We anticipate AI playing an increasingly pivotal role in creating hyper-personalized experiences, from predicting guest preferences to optimizing hotel operations for sustainability. AI-driven dynamic pricing and image generation will also become commonplace, enhancing marketing efforts and driving revenue," she explains.
Enhancing Marketing Strategies with Generative AI
With the hospitality industry's competitive landscape constantly evolving, hotels have the opportunity to leverage generative AI to innovate their marketing strategies and nurture deeper connections with guests. Here are some ways to do this:
1. Elevate guest experiences with personalized marketing.
Generative AI can analyze data from past guest interactions, preferences, and behaviors, enabling hotels to create unique offers and recommendations for each guest.
For example, if a guest frequently books rooms with ocean views, the hotel's generative AI can suggest special promotions for these rooms during their next stay. This level of personalization improves the guest's experience and builds loyalty.
"Generative AI is a game-changer for us," says Blessy Townes, Vice President & Head of Digital Marketing and Branding of Discovery Hospitality. "It’s extremely helpful in gathering data on guest preferences and traveler behaviors, allowing us to create more personalized content, offers, and experiences. We think of it as a creative partner in hyper-personalization, especially with the ever-changing market trends and the multiplicity in ad tech, social media formats, generational preferences, and intent in mobile shopping moments."
Townes explains that by blending AI insights with real-world experience, they were able to make their strategies even more effective in terms of relevance, engagement, and conversions.
Further illustrating the impact of personalization, Hotel Management (HM) published an article in January 2024 citing Hyatt as an example of a hotel group which leverages personalization to boost revenue. By collaborating with AWS to use customer data, Hyatt achieved a $40 million increase in revenue in just six months by recommending hotels tailored to individual preferences and offering enticing add-ons like spa packages.
2. Create engaging content.
Generative AI simplifies the task of producing unique and compelling content across diverse formats, from social media posts to blog articles. By ensuring that each piece resonates with the target audience, businesses can achieve more relevant communication that captures potential customers' attention, leading to increased bookings and revenue.
In this recent report by Travel Asia Weekly, even travel agents are now using AI to curate content.
But how does generative AI help businesses stay competitive and innovative while maintaining their unique brand voice?
"Embracing generative AI keeps us sharp and ahead of the curve in this AI-driven world. It is great at sparking fresh ideas, but it’s our job as hotel marketers to refine them and turn them into something truly unique. It is a fantastic tool that guides us, but it doesn’t replace our heart and creativity. It has helped us uncover countless potential stories that we, as humans, can craft into meaningful content," says Townes.
As a result, she said their social media and SEO campaigns are thriving, with their brands appearing in AI-generated results for all the right prompts.
Photos by: Discovery Hospitality
3. Optimize direct booking strategies.
Generative AI helps hotels fine-tune their direct booking initiatives, leading to an uptick in direct channel revenue, which is essential for reducing reliance on third-party platforms.
"While AI’s biggest perk is its efficiency, for us at Discovery Hospitality, it has allowed us to grow our group's YTD Direct Booking share of revenue to 70% (versus OTA’s 30%) with phenomenal Return on Investment (ROI). From conceptualizing creatives to ad delivery, AI and Machine Learning have increased our visibility across different touchpoints in the customer journey and guided our audiences through the conversion funnel. By digging into all sorts of data sources, even unconventional ones, we’re able to uncover actionable insights we might otherwise miss. This adds depth to our results and strengthens our strategies," shares Townes.
4. Implement AI-driven dynamic pricing.
AI helps hotels adjust room rates in real-time, considering factors such as demand, market trends, and competitor pricing. This approach ensures that pricing strategies are competitive and optimized for profitability, offering guests attractive deals that reflect current market conditions.
Skift author Sean O'Neill noted in July 2023 that AI is set to transform hotel revenue management, and we see this happening now.
5. Enhance customer support with AI-powered chatbots.
Goetzke highlights that generative AI enables hotels to deploy chatbots that provide 24/7 support, offering instant responses to guest inquiries. These AI tools manage routine tasks such as booking inquiries and room service requests, allowing team members to concentrate on more complex tasks and deliver personalized services. Leveraging AI helps hotels deliver quick and efficient guest engagement.
Maintaining the Human Touch
Generative AI offers significant benefits to hotel marketing strategies, but it's important to ensure that the human touch is not lost in the process. AI should complement, not replace, what hoteliers do best.
Here are some ways hotels can maintain the human element in their marketing strategies:
Personalized interactions: While AI chatbots can handle routine inquiries, human interactions provide irreplaceable empathy and understanding.
As Goetzke notes, "AI isn't here to replace human interaction. Think of it as a virtuoso guest relations assistant, gathering guest preferences and anticipating needs. This frees up your staff to focus on curating unforgettable experiences, like a guided nature walk with a local botanist."
Prioritize human-led touchpoints, such as check-ins and concierge services, to maintain personal connections and create lasting memories for guests.
Integrate AI thoughtfully and manage it well to ensure it complements rather than replaces human service.Empowering staff: Hoteliers should invest in training their teams to use AI tools and technology effectively. This strategy improves productivity and allows staff to focus on tasks that require a human touch instead of relying on AI improperly.
"It’s so easy to rely on AI for all our outputs, especially when things pile up. But it shouldn’t be like that. We are in the business of authenticity, and human interactions are the essence of the hospitality industry. Businesses need these interactions to thrive. It’s just a matter of balancing these automated processes with personalization, fostering human creativity, and maintaining our uniqueness. We believe that building and strengthening brand love requires more than just Gen AI," says Townes.
Photos by: Discovery Hospitality
Ethical Considerations in Using Generative AI
"Human-AI collaboration is a way to ensure ethical use. AIs are only a support system and can never replace human interactions," reiterates Townes. "Since AIs are not flawless and prone to errors, it's crucial to consistently conduct quality assurance on the generated data and ensure it adheres to the company's privacy policy, all while safeguarding our guests. Programs that test their effectiveness can also be implemented before they can be applied to a broader execution."
On Data Privacy: Ensure guest data is protected and used ethically.
Goetzke recommends using guest data responsibly. While generative AI can provide valuable insights, it is crucial to use this data ethically.
Hotels must safeguard people's privacy and refrain from using sensitive information without consent.
On Bias and Fairness: Address potential biases in AI algorithms to ensure inclusivity.
Sometimes, AI algorithms can pick up biases and unfair ideas from the information they learn. It's important to check these programs often to identify and mitigate algorithmic biases, ensuring fair and inclusive service for all guests.
On Transparency and Trust: Maintain transparent AI processes to build guest trust.
Transparency in AI processes is key to gaining guests’ trust. Clearly explaining how AI is used and ensuring accountability can help ease concerns and boost confidence in AI-driven services.
On Regulatory Compliance: Navigate different regulatory landscapes across Asia.
The AI regulatory environment in Asia is rapidly evolving, with countries such as India, Indonesia, Japan, and Malaysia at the forefront of developing guidelines. It's important for hotels to stay updated on these regulations to ensure compliance and avoid any legal issues.
Find out the recent AI regulatory developments in APAC here.
On Carbon Emissions: Be strategic in your return on emissions as AI systems increase energy usage.
AI can be a double-edged sword. On one end, it can help in mitigating the impacts of the climate crisis, like optimizing smart grids, creating low-emission infrastructure, and predicting climate change. However, on the other end, AI also contributes to carbon emissions on a considerable scale.
Google’s greenhouse gas emissions in 2023 were 48% higher than in 2019, driven by the rapid expansion of AI-powered services. A recent study reveals that generative AI systems like ChatGPT could consume approximately 33 times more energy than machines operating with task-specific software.
