AI has big implications for the hospitality industry, AI tools continue to land big investments, a key AI production partner had less-than-stellar earnings that erased $155 billion in market cap from Nvidia, and Kustomer launched a new study about customer service technology pricing.

AI Spotlight

When it comes to an academic paper vs. a Forbes article, I prefer the academic approach. Researchers tend to have an unbiased point of view since they really understand where we're heading, and all the data is right there.

I stumbled upon a new academic study that explored the impact of AI on the hospitality industry, centering around how AI will fundamentally change the way that customers and employees interact. I knew immediately I wanted to share it with you this week.

The study’s findings reinforced much of what we know AI can do for hospitality businesses, such as improving operational efficiency and facilitating personalized guest experiences. What’s unique is that the study authors offered a human-centered approach where hospitality brands use AI to empower and engage employees.

However, the study had great takeaways that apply beyond the hospitality industry. Here are the key recommendations:

• Adopt AI to automate mundane tasks to allow employees to focus on the customer experience

• Leverage AI for customer-facing aspects such as 24/7 service, travel planning, and automating check-in and check-out

• Empower employees to adopt AI tools to boost job satisfaction

• Be proactive about employee training and engagement to drive further innovation

• Use AI to safeguard customer and company data

As you’re likely thinking about 2025 initiatives and goals soon, consider which of these makes sense to prioritize.

Shooting the Breeze

This study reinforced why I’m bullish on how AI can transform the customer experience, and that of course includes hospitality. Customer service is vital in the hospitality industry.

Case in point:

Ritz Carlton famously has its policy where employees can spend $2,000 a day to resolve customer service problems without needing manager approval. It’s high-quality, but resource intensive. AI can now be a resource for other brands so they can
uplevel their service without needing to bring on more staff or inflate budgets.

However, it’s clear customers are not ready for AI to handle the more proactive parts of their hospitality experience. Travelers or diners want deep confirmation that their reservation is real, and they don’t trust AI with that yet.

Part of why I’m excited about the human-in-the-loop model is because that can help consumers build the necessary trust in AI over time. We progressed from using travel agents to directly booking flights, hotels, and rental cars online without talking to a single human. I believe we’ll get there with AI, and human oversight of decisions and bookings is key.

It’s important for all businesses, but especially hospitality brands, to maintain a consistent experience throughout the whole customer journey. Ironically, AI can provide an inconsistent guest experience.

Consider how AI gives you the power to answer your customers' questions in a different language and provide 24/7 support. If that experience you’re creating on the front end doesn’t match what it’s actually like at the hotel or restaurant, it’ll be a worse customer experience. If a guest shows up only to find the front desk has limited hours and no one on staff speaks their language, they’ll recount it as a travel nightmare.

For all brands, but especially hospitality, be mindful of communicating what the real-life guest experience will be like and incorporating that when you roll out AI.

The study discussed how AI can aid the hospitality industry not just with supporting customer service, but also revenue management and demand forecasting. Hospitality brands can and should look into using AI in both areas of the business simultaneously, but these departments need to work together to make it a success.

Survey Insights

AI is disrupting how SaaS tools deliver and charge for their services.

Kustomer wanted to better understand this disruption, so it asked 200 CX leaders about their needs on customer service technology pricing. We heard loud and clear: they want flexibility and predictability.

66% of respondents told us they prefer usage-based pricing. The issue? 93.5% of buyers are paying on a seat-based model. Not exactly flexible.

AI-driven automation is going to disrupt the old pricing model.

Stay ahead of the curve and get more insights into buyer preferences with the full report.

CX Spotlight

Here’s an example of how AI’s massive processing power can supercharge customer service. TechCrunch profiled Neuron7 which uses language learning models to consume all of a company’s product manuals and past support tickets. Then, the AI synthesizes those to help predict the cause of new customer issues and aid technicians who make repairs.

Neuron7 just raised $44 million in its Series B, notably including a contribution from
ServiceNow’s VC arm and Keith Block, a former co-CEO of Salesforce, who is now a board member. If you follow the money, this investment shows where AI powered CX is going - one where the AI can handle increasingly complex issues and help human employees on technical teams beyond customer service.

Right now, we see a lot about how AI will tackle easy, clear-cut customer service inquiries to free up agent time for more complex nuanced issues. As AI develops, what qualifies as “easy” for AI to tackle will grow. It’s clear: now is the time to explore AI solutions for your team, and don’t be afraid to think big about how they can aid different areas of the business.

Golden Nuggets

DoNotPay will now call customer service hotlines for you
After layoffs, Shopify aggregator OpenStore launches an AI customer service tool for brands
The value of human support in an AI world