All About Chatbots: The Hotel Industry Can Thrive Through Automation

The hotel industry is facing a perfect storm. Post-pandemic travel has resumed, but hotels must grapple with a labor shortage and wage inflation. The U.S. Travel Association recently reported that travel spending in April 2022 had reached a level that was three percent above 2019 levels. The resurgence in travel is a double-edged sword, though. One million restaurant and hotel workers quit in November 2021, according to Business Insider. The publication attributes the loss of workers to low wages in the leisure and hospitality industry.

Paradoxically, wages in the industry have not remained entirely stagnant. Data from the Federal Reserve Bank of Atlanta shows that they started rising in December 2021 and continued rising into May 2022, which is the last available data point from the Atlanta Fed’s wage growth tracker.

So, how can the hotel industry meet an increase in demand from travelers while dealing with a labor shortage and higher operating expenses? The answer is automation.

Automating Customer Service

Chatbots are the ultimate form of automation. These software applications are frequently used in messaging apps for customer service. The chatbots often appear on websites via pop-up windows where visitors type in questions. The software provides the answers via text messages that appears below the questions.

Chatbots can be deployed to serve many customers, potentially acting as a cushion for hotels lacking enough front-desk employees. In fact, hotel owners and managers are embracing the use of this technology. Statista.com surveyed hoteliers in January 2022 and determined that chatbot use by the hospitality sector would increase by 53 percent this year.

There are two types of chatbots: a rule-based version and an artificial intelligence (AI) version. AI chatbots can hold conversations by answering questions in a human-like manner. These sophisticated programs use a combination of technologies: machine learning and natural language processing.

In an article for the MIT Sloan School of Management, Sara Brown describes machine learning as an AI technology that can be used to create a machine learning model. This model can be referred to as a type of program that finds patterns in data. In her article, Brown shows that a machine learning model can learn from those patterns....

Programs That Learn and Respond

It is the ability to learn that makes AI chatbots so useful. These programs learn from having conversations with people, according to researchers who published their findings in the study, Machine learning algorithms for teaching AI chat bots.

Learning is not enough, though. Chatbots must be able to use human language. That is the role of natural language processing (NLP), an AI technology. AI chatbots use NLP technology to respond to questions that people ask. In the research paper, An Overview of Chatbot Technology, the authors state that natural language understanding (NLU) is a main element of NLP. They also indicate that chatbots use NLU to understand the context and meaning of language and to determine how to respond to inquiries from people.

Those responses form the basis of conversations and, ultimately, it’s the conversational abilities of chatbots that make them so useful for the hospitality industry. These programs can make it possible for hotels to serve guests in automated but human-like ways, enhancing customer service and alleviating problems caused by labor shortages.

Tyler Boykin is the vice president of global sales at Chetu, Inc., a custom software development company, where he oversees the hospitality and travel, transportation, events and meetings, and IT service management accounts, as well as a myriad of partner tools.