Max Starkov is ubiquitous on social media. LinkedIn, specifically. If someone puts forward a take, especially related to or tangentially about hospitality technology, you can bet Starkov will respond with his own candid take—and you can expect that it will be erudite and, potentially, contrarian.
There is a library of comments to posts that you can peruse. Here’s just one of many he responded to:
Some background: Starkov is a hospitality and online travel industry technologist, consultant and digital strategist with 30 years of experience in hospitality technology and digital marketing, hotel online distribution and revenue management, hotel CRM and branding strategies. He was the founder, president and CEO and, more recently, founder and board director at NextGuest (now merged with Cendyn), a digital consulting, technology, CRM and marketing firm. For more than 20 semesters, Starkov has been an adjunct professor on hospitality technology, online distribution in travel and hospitality, hotel digital marketing and CRM at New York University’s Tisch Center for Hospitality & Tourism.
Who better then to ask about the tech topic on everyone’s mind: artificial intelligence. It’s not just here, it’s mutating very second, everyday. We asked Starkov what he thinks the implications are for AI in hospitality.
1. What are the short-term and long-term implications for AI within the hospitality industry? Where is its usefulness for hoteliers?
When discussing AI, we have to make a clear distinction between general AI and machine learning (ML) and the much hyped generative AI (genAI), like ChatGPT. General AI and ML have been used in robotics for some time now: RMS, CRS and CRM platforms. As for genAI, if you dissect all of the hype and actual implementations of generative AI, like ChatGPT and Google Gemini, they fall into five categories that are already having significant impact on travel and hospitality:
- enhanced chatbots to handle trip planning and customer service
- virtual assistants
- content translations
- marketing and website copywriting
- responses to customer reviews
Independent hotels do not have the financial, technological or talent resources to select, train, implement and maintain generative AI bots on their own. They have to rely on proactive and smart hotel tech vendors to introduce genAI powered applications, which a number of them have already done with remarkable speed, such as genAI-powered and hotel-specific chatbots such as Asksuite and Quicktext, which are suitable for hotel websites of independents, midsize and smaller hotel brands, boutique and luxury brands.
The major hotel chains are already working on highly customized versions of ChatGPT or Google Gemini AI on their brand sites to handle trip planning and customer service. For example, last year Accor launched its AI Trip Assistant, which can recommend rooms, serve up special offers and make recommendations for local experiences, such as ticketed activities, wellness experiences and food and beverage options.
2. Surge pricing has become a hot topic. Hotels have done dynamic pricing for years. How can AI help revenue management?
A typical hotel makes roughly five million pricing decisions every year and it is not humanly possible for any revenue manager to get every decision right, every day, without the support of an automated system.
Only an AI-powered Revenue Management System (RMS) with real-time market, travel demand and comp-set analytics, CRM data feed, website and digital marketing analytics, and online reputation/consumer sentiment data feeds to optimize performance can achieve a near-perfect real-time pricing in response to market dynamics, and significantly enhance GOPPAR(Gross Operating Profit Per Available Room).
Hotel management and ownership are realizing that only a cloud AI-powered RMS can help the property maximize revenue and successfully compete in today’s super-complex and competitive marketplace.
In the future, an AI-powered RMS, in combination with the property CRM, will be able to move current revenue management from a “one-to-many” pricing approach to “one-to-one” pricing. This will allow every single guest to receive highly personalized one-to-one pricing.
3. The one worry over AI is that it will potentially cut out jobs. What are those jobs? Can AI and human intelligence co-exist?
By 2025, more than 85 million existing jobs will be lost due to the seismic shift toward AI, robotization and automation, according to estimates in the “The Future of Jobs Report” published by the World Economic Forum. Similar forecasts appear in reports from the likes of McKinsey & Co. and the Organization for Economic Co-operation and Development (OECD).
In 2023, labor costs consumed around a third of hotel revenue and AI, robotization and automation are becoming increasingly appealing to hotel owners and operators.
The notion that guests are demanding human-provided services is greatly exaggerated, especially today. A great example of why guests do not care about human-provided services as much as some in our industry think comes from the short-term rental sector. The gold standard at short-term rentals is customer experience without any human contact between guests and hosts, and yet guests are not only not complaining, but gobbling up this “human-less” service and loving it.
There are three main impediments to fast adoption of AI and robotization in our industry:
- reluctance to invest in new technologies by real-estate-minded owners and operators
- lack of understanding and fear of new technology, ie., “Who will deal with it? It makes operations very complex”
- The labor unions in major metropolitan areas with highly-unionized hospitality labor force are dead set against any AI, robotization and automation or any technology advancement that can reduce the number of paying members.
None of the above can stop the rapid advancements in the adoption of AI, robotics and automation in the hospitality industry, in the same manner as the Luddite movement in early 19th-century England could not stop the first Industrial Revolution.
Automation in hospitality, via AI, robotics, IoT and mobile technologies, is inevitable, which will augment and in many cases replace repetitive, mundane and dangerous jobs.
There are three macro-socio-economic factors forcing the hospitality industry to accelerate the adoption of human-less and do-it-yourself (DIY) services and increase their technology investments in automation: the labor shortage, the unsustainable labor expense in hospitality and the emergence of the new tech-savvy travel consumer.