AI is primed to transform hospitality, but the sector must embrace change 

AI hospitality

The hospitality sector stands on the verge of great change. Ahead is a technological revolution driven by the catalysing effect of AI. This technology can optimise workflows, reduce waste, track consumer behaviour and even generate menus. But for this to happen, hospitality decision-makers must embrace change.

Despite the promise of transformation and increased efficiency, the sector remains understandably preoccupied with back-to-back challenges. For owners and staff alike, hospitality has been an unpredictable space to work in since the start of the pandemic.

Lockdowns, social distancing and quarantine have now been overtaken by the challenges of food price inflation, staff shortages and the end of the energy bill relief.

These issues have left hospitality businesses stuck in a myopic holding pattern, with their eyes fixed firmly on the short term, trying to fight the fires that threaten to leave them toasted.

Embracing technology might not seem like the solution hospitality businesses need today, but AI has the potential to address pain points in the short and long term.

What can AI do for hospitality?

The hospitality space is primed for tech-driven innovation, with many areas crying out for greater efficiency and optimisation. For most restaurants, cafes, pubs, and bars, their margins are extremely narrow and even small reductions in waste, cost or effort can translate into greater profitability.

Peckwater Brands’ own research found that 44% of UK hospitality businesses were operating at a loss, demonstrating a real need for immediate cost-cutting measures and prioritising efficiency.

Hospitality businesses can look to other sectors to see how AI is being leveraged to improve operations. In agriculture, manufacturing, finance, and more, machine learning has proven that it can level up those who are willing to innovate.

The ability to predict demand and anticipate users’ needs can enable hospitality businesses to protect themselves from future shocks, an approach that is already proving effective for retail businesses. Many consumer-facing businesses are increasing customer experiences using chatbots and digital assistants.

Unlocking the potential of AI in hospitality

One of the main draws of AI is its ability to comprehensively assess and analyse a business’s workflow, suggesting optimisations for supply chains and customer experiences. Data is a resource that remains undervalued in hospitality, and AI’s ability to automate data analysis and identify overlooked opportunities and shortcomings could have a significant impact on how decision-makers choose to run their businesses.

As well as understanding the inner workings of their own business, AI can also help business owners to know their customers better. For instance, leveraging machine learning to identify patterns of consumer behaviour can help businesses predict demand, allowing them to tailor their approach to maximise revenues while limiting resource waste.

By personalising recommendations and promotions according to their preferences, businesses can provide a better experience to customers while maximising revenues.

Overcoming the barriers

Despite the clear advantages of harnessing AI, the road ahead won’t be without challenges. As with any technological disruption, there will be a learning curve and initial investments required, and the onus is on decision-makers to look beyond the challenges of today and implement strategies that will lead to greater success in the future through embracing tech and AI.

In the wake of unprecedented challenges stemming from Covid-19, energy crises, and inflation, the hospitality sector is still reeling. While AI may not be an immediate remedy for all these issues, it offers a path to greater productivity and profitability that is sorely lacking from many strategies.

By embracing tech-driven innovation and the potential of AI, hospitality businesses can rise to the occasion, redefine their operations, and recapture their former glory. The time has come for the sector to shed its reservations and seize the opportunity to transform with AI, rather than just continuing to roll with the punches.

Sam Martin, CEO and co-founder of Peckwater Brands.

To find out more about generative AI and what it means for businesses, read UKTN’s guide on the topic here