Nishan Silva
Summary of Doctoral Research
California Southern University
School of Business and Management
In the modern world, technology is ubiquitous and offers increasingly varied possibilities. Although artificial intelligence (AI) and other forms of automation, such as robots, have implications in many—if not all—industries, scholars have anticipated their impact on hotels and hospitality to be significant and continuous over the coming decade (Bowen &Morosan, 2018; Lukanova & Ilieva, 2019). Issues of AI and technology are those of smart hotels or hotels that draw upon the various forms of smart technology (Buhalis & Leung, 2018). Many existing hotels seek to integrate this technology, but the issues related to smart technology and AI are not yet fully understood (Sarmah et al., 2017). There is a need for additional research to explore the applications of AI and smart technology in the hotel industry. The purpose of this qualitative case study was to explore the perceptions of key experts in the hotel industry on the role and importance of AI and automation in the hotel industry, focusing on high-end, global hotels that operate in Africa and the Middle East.
Background
Throughout much of the latter half of the 20th century, AI and automation were considered merely science fiction elements. Even as they developed into more realistic concepts, their applications have been broadly considered in manufacturing or data processing (Shamim et al., 2017). As early as the 1980s, however, several researchers had already noted the potential importance of these developing technologies to service industries such as hospitality (Gursoy, 2018). As of the late 2010s and early 2020s, many of these applications have been realized. Over the next decade, automation and AI are expected to replace about 25% of the hospitality industry workforce (Bowen & Morosan, 2018). In the body of literature, most studies on this topic remain conceptual or design-focused rather than empirical (Ivanov et al., 2019). Due to the lack of empirical research on AI and automation in hotels, an exploratory, qualitative method is appropriate for this study.
To support the integration of AI in the workforce, balance is necessary (Bruun & Duka, 2018). AI has increasingly been used to substitute human employment in areas previously considered un-computerizable (Bruun & Duka, 2018). Specifically, developments in AI reflect the creativity and agency of a human while maintaining the speed and efficiency of a machine. In the ongoing COVID-19 pandemic, automation, AI, and human-robot interactions have also been adopted at increased rates to help manage the spread of the virus in hotels, hospitals, airports, transportation systems, recreation and scenic areas, restaurants, and communities (Zeng et al., 2020). The adoption of AI and automation during the COVID-19 pandemic has been crucial to the travel, tourism, and hospitality industries, which were significantly impacted by the lockdowns and social distancing implemented to control the virus (Zeng et al., 2020). The integration and use of AI and automation in the travel, tourism, and hospitality industries are likely to continue beyond the COVID-19 pandemic as robotic applications enhance guest experiences (Zeng et al., 2020).
Despite the developments in the implementation of automation and AI in the hospitality and tourism industries, the effects of AI on employment are not likely to affect all types of jobs equally (Bruun & Duka, 2018; Huang & Rust, 2018). There are also barriers to the adoption of automation. Researchers have suggested that automation replaces the ability to do specific tasks more often than the ability to do an entire job (Huang & Rust, 2018). Furthermore, researchers are divided on the domains they expect automation to affect. For example, some have indicated that automation of management processes may be key to developing and maintaining competitive advantage (Popov et al., 2017). Others have emphasized the ability of AI and automation to help guests co-create value by personalizing their service experiences. At the same time, some researchers have warned against relying too heavily on AI. These critics have suggested that many who travel, especially for tourism purposes, seek an authentic experience that an over-reliance on technology may disrupt (Tribe & Mkono, 2017). Others have posited the need to integrate technology gradually so that it is only present when needed and not ubiquitous (Stankov et al., 2018). Overall, researchers have suggested that leaders in the industry perceive the increasing role of AI and automation as a positive development in terms of short-term profitability and overall business success (Kuo et al., 2017). However, employees’ awareness of AI and automation may drive increased turnover rates (Li et al., 2019).
Further complicating the role of AI and automation in hotels is its strong connection to the notion of smart hotels. Broadly, smart hotels are those that leverage smart technology, including data-driven processes, systems interconnectivity, and AI automation (Buhalis & Leung, 2018); yet, the specific definition of what a smart hotel is, and should be, differs significantly between different stakeholder groups (Leung, 2019). However, scholars have argued over the specific definition of the term, and smart hotels have become increasingly common in practice, especially in locations billing themselves as ‘smart cities’ such as Dubai (Khan et al., 2017). The idea of smart hospitality as a part of the smart city is one of the approaches that has been put forth in the literature as a solution to the problem of damaging over-tourism, which has begun to adversely affect quality-of-life in and the physical condition of many tourist hubs (Koens et al., 2019).
The extent to which firms adopt smart innovations, including AI and automation, is driven by a myriad of factors, including compatibility, firm size, technology competence, critical mass, and complexity (Wang et al., 2016a). As envisioned in the literature, there are also significant barriers and challenges to the implementation (Kansakar et al., 2019). Smart technology also offers an opportunity for guests and hotels to co-create values in the sense that it enables guests to shape their own hospitality experiences, improving the likelihood of their stays in hotels being positive (Lim & Maglio, 2018). This personalization application is quite prominent in the literature; however, human touch and contact also remain important (Neuhofer et al., 2015; Solnet et al., 2019).
Some scholars have examined AI in the hospitality industry, including hotels, and smart hotels; however, many aspects of the existing research remain contentious or muddled. While researchers have suggested seismic shifts in the industry resulting from AI and automation over the next decade, it is less apparent what form these shifts may take. This is the research problem that inspired the current study.
Statement of the Problem
The problem is that the role and importance of AI in the high-end hotel industry are not yet fully understood. By the 2030s, AI and robots are predicted to make up about 25% of the hospitality (and hence hotel) workforce (Bowen & Morosan, 2018). At the same time, the notion of the smart hotel has arisen to encapsulate the changes brought on by technology, AI, automation, and interoperability in hotels (Buhalis & Leung, 2018). The definition of what a smart hotel is and should seek to achieve remains muddled and contentious, even as smart cities strive to integrate such hotels into their technological infrastructure (Khan et al., 2017; Leung, 2019). Complicating this are the differing attitudes of consumers and other stakeholders, such as organizational leaders and employees, as to what functions AI can and should have in the hotel context, and the effects of automation on employees and their retention (Ivanov et al., 2018; Li et al., 2019).
The ongoing effects of AI and automation on the service industry are directed toward specific tasks, not whole jobs (Huang & Rust, 2018). Thus, these technologies will likely necessitate a retooling of hotel employment (Prentice et al., 2020a). To understand this shift, a dynamic capabilities framework offers a key theoretical perspective regarding how emerging technologies can influence competitive advantage as the technological environment changes (Teece et al., 1997). Further research is needed on the increasingly prominent role of AI in the hotel industry and how it will shape the industry going forward (Lukanova &Ilieva, 2019). This includes the role of AI in hotel marketing, processes, communication, customer relations, and management, which may be a valuable tool for predicting customer preferences (Gursoy, 2018).
Purpose of the Study
The purpose of this qualitative, single case study was to explore the perceptions of key experts at a large, international hotel chain on the role and importance of AI and automation in the hotel industry, focusing on high-end, global hotels that operate in Africa and the Middle East. The researcher recruited 30 hotel experts from a high-end, multinational hotel chain. In this context, high-end hotels are defined as large hotels, typically but not necessarily operated as chains, with large budgets for technology and other amenities (Schuckert et al., 2019). This was a single case study of a large hotel chain. Hotel managers and leaders were invited to voluntarily participate in one-on-one personal interviews through an online platform on Webex, Zoom, Skype, WhatsApp, and LinkedIn. The researcher used the dynamic systems framework to examine the role, functions, challenges, and barriers of AI and automation in the hotel industry to gain a deep understanding of AI and how it can be used to improve hotel operations. The study results will be used to assist hotels in developing a competitive advantage in the industry.
Conclusion
From the current study, there is consensus that AI and automation play a key role in improving customer service. In particular, it can be concluded that most hotel management members understand the role of AI and automation. However, the key issue is the limited incorporation and employment of the said technologies to fully maximize their advantages and potential. Some roles AI and automation play in hotels include backhouse activities, customer service activities, personalization of customer service, and speedier service. As such, with Dubai hotels already reaping big from AI and automation, it is evident that technology is inevitable in the current generation. Further, for a hotel to remain relevant in the current era, AI and automation cannot be dispensed. Hence, stakeholders and key policymakers of hotels across different regions must examine and invest in research and development to determine the most suitable and appropriate technology that will ensure their competitive advantage and sustainability in the long run.
Concerning the reactions from the employees and customers, the issue of training is key to enhanced awareness. Furthermore, employees do not just accept the technology; rather, they need to be clear of its impact. On most occasions, they will resist any form of AI and technological advancement that does not benefit them. However, the study has also concluded that AI and automation do not depict a complete abandonment of the human touch. Therefore, hotels need to integrate human services with AI and automation. The key challenges hotels face when implementing AI and automation include resistance from employees and leaders and poor government support. Cost and implementation issues hinder the adoption of AI and automation among hotels.