Artificial Intelligence - Unlocking the Leisure & Hospitality Sector

4 Min. Read

Businesses in the leisure & hospitality sector arguably live and die by public scrutiny and opinion. The pressure placed upon operators to offer an experience that will not just meet, but surpass expectations, again and again means that the requirement to constantly improve and finesse propositions and customer journeys is relentless. Get it right, mission accomplished, get it wrong and condemnation will follow, no doubt published in a review which in some cases can be merciless Why? Because our leisure time is ours and it is what we do when we are not working or sleeping, and that’s precious time!

Depending on our moods, the weather, our budgets or who we are with, we insist on an acceptable level of enjoyment and expect organisations to know how to give it. For this very reason there are leadership meetings happening across much of the hospitality world, gambling with delicate decisions around site-locations, pricing, customer experience, safety, all in aid of making sure we have a wonderful time and will come back for another visit with the friends we told.

So, recognising that ‘leisure time’ will always exist and therefore the sector is presumably assured a sustainable future, why isn’t every investor with a chequebook falling over themselves to take a piece of this wonderful industry with a lifetime guarantee?

Well, the answer is a simple one, it is because the destiny of the hospitality sector is controlled by the people, and people do not know what they want half the time and that makes people unpredictable, and that makes things risky.

So, when we cannot be sure of what the future holds or what customers will want or whether another global calamity might exist around the corner, there is no queue of people ready to write a 9 -figure cheque to buy a restaurant business that may or may not have made the right choices.

What usually happens instead is investors and competitors will let it play out and if they got it wrong and face collapse, they buy the good bits out of administration at a low price-point and leave the bad bits in the bin.

Wrong decisions in hospitality can summon tough times very quickly. Tough times make it hard to keep the bank happy which then means no more cash to keep the customers happy and before you know it, you are handing over the keys.

Having seen several hospitality-administrations over the last few years, the mind does wonder just how many could have been spared if we knew then what we know now? I guess we’ll never know but what must happen is a striving to be smarter and be better at making the right choices. Easier said than done when we’re talking about an industry that demands innovation yet is at the mercy of human mood and behaviours, but if a world existed where new site-acquisitions were less of a gamble, if it was possible to know what customers actually wanted, if it could be determined what a middle-class family of four will spend on a wet afternoon in April on a Tuesday in the south-west of England, then that would be incredible, and that is what Artificial Intelligence (AI) is unlocking right now.

The advent of AI is presenting these exciting opportunities for the entire sector, removing a lot of risk, making investments much more logical and informed and making the sector more investable. Streamlining operations and efficiency, personalising guest experiences, enhancing customer service, smart marketing and revenue management are all things that AI is bringing huge value and sophistication to.

In its various forms, AI is starting to permeate into all aspects of hospitality with AI-powered technologies such as machine learning and natural language processing where AI algorithms can analyse large data sets and extract valuable insights, enabling leisure operators to offer highly personalised recommendations and services to their guests. It then opens the possibility to gain a deep understanding of guest preferences, enabling them to curate tailored offerings and experiences that go far beyond expectations.

By also using AI to optimise operational processes, AI-powered systems can analyse data from multiple sources (e.g., guest feedback, staff performance metrics, staffing/resource allocation, inventory, maintenance and distribution) to identify bottlenecks and areas for improvement which allows for a much more data-driven approach, thus allowing operators to make informed decisions, streamline workflows and allocate resources more effectively, ultimately driving significantly better business outcomes.

It can play a crucial part in revenue management too, with departments using algorithms to refine pricing strategies and forecast demand, location analysis, evaluating potential property investments or renovations too and whilst there is no suggestion here that AI is a panacea, what we are seeing without question is a watershed moment of something so powerful and beneficial that if properly harnessed and empowered with the right knowledge, it could truly unlock the sector, and that is how you win the game.

So, for an industry once dependent on traditional methods of “let’s build it and we think they’ll come” to using AI to fundamentally reinvent how operators interact with guests, streamline operations, and make decisions based on data and predictions, a revolution is upon us.