How AI-Powered Chatbots Revolutionizing the Hospitality Sector

By James Tredwell on December 12, 2020

Using chatbots has become the new norm. Today, almost 40% of major companies, and roughly around 1.4 billion people are using chatbots. For example, healthcare, banking, telecom, the retail industry, and the tourism industry are a few sectors that come under chatbot’s extensive domain.

With the recent AI development in the chatbot field, 23% of companies started using AI chatbots. Pretty soon, chatbots won’t be limited to only predefined answers. AI-powered chatbots will have the ability to converse in an active conversation. You may have the question, “how is chatbot associated with AI technology?”

With the help of artificial intelligence, chatbots provide a human touch to every conversation. The bot deciphers the user’s query and generates an accurate response. In order to achieve this, chatbots use mainly two components of Artificial Intelligence

  • Machine Learning

Machine learning is the study of the algorithm that helps chatbots to learn from the data provided by you during bot training. With the help of machine learning, the bot first monitors the previous conversation with the user and responds accordingly.

  • Natural language processing

Natural Language Processing (NLP) assists the bot to understand and interpret the information closely. With NLP’s help, you train your chatbot with various intents that the user will type during the conversation. Based on these intents, the chatbot generates a streamlined response.

Because of its many advantages, the hotel and tourism industry has started using AI-powered chatbots. The hospitality industry has realized that in-depth customer service harnessed with personalized offers is the key to increase their brand value. Something that AI chatbots are capable of delivering.

Let’s go more in-depth and try to understand how chatbots are revolutionizing the hospitality sector.

  1. Tailored personalized recommendations

An AI-developed chatbot for your hotel can render hyper-personalized recommendations for your customers based on their previous behavior and preferences. AI-powered chatbots are great for managing relationships with customers. With NLP, chatbots can better understand guest queries. They can assist guest’s full travel/stay experience by sending automated pre-arrival reminders, suggesting nearby restaurants and transportation options, suggesting nearby tourist attractions, etc.

Few hotels like the Clarion Hotel in Stockholm have also started implementing this. They have enabled in-room chatbot assistants capable of taking orders, providing online information, booking cabs, or entertaining other hotel-related queries.

  1. The best channel for reservations

The hotel business has long been dependent on online travel agencies for customers. Relying on travel agencies means a hefty share from the profit will be dissolving as commission. These days, hotels have started having their online presence (website, messaging apps, etc.). Almost all guests now like to reserve rooms from the hotel website. With AI-powered chatbots, the hospitality industry can now leverage multiple online platforms and generate quality customers.

Hotels like InterContinental Hotels Group (IHG) are testing AI-powered chatbots in three of their properties. The chatbot utilizes Facebook Messenger for its chatbot platform. Users can use the chatbot services before, during, or after post-stay.

  1. The omission of the language barrier

Imagine a situation where a foreign guest comes to your hotel and wants to converse with you, but you seem not to understand him correctly. The communication gap between you and your guest will surely ruin the streamlined experience you decided to provide. Such awkward scenarios are not suitable for your business.

However, with AI developed chatbots, it is not the case! Having a chatbot on your website lets your guest directly talk with the bot. Since chatbots are built on NLP standards, they can understand any language and converse fluently with them. With the help of chatbots, language is not a barrier anymore. It’s just another mode of communication.

  1. Best for up-selling and cross-selling

AI development in chatbots has made them superior to their human counterparts. They can be your low maintenance perfect employee for up-selling and cross-selling purposes.

By keeping last-minute deals at your disposal, AI-powered chatbots can be your partner for upselling. For example, when a customer booked a room, chatbots can offer him room up-gradation at discounted rates.

You can also offer various types of hotel services via chatbots too. For example, when a guest arrives at your hotel from a long exhaustive journey, chatbots can send recommendations for your hotel’s cafe or spa. If the guest’s previous data shows that they like to relax in a spa after arriving, you can send ongoing offers and discounts.

  1. Generate skyrocket revenue

The hotel industry used to pay massive ransom for generating traffic, mainly through paid apps and other promotional activities. AI-powered chatbots can make sure that these hefty investments are not wasted by engaging the traffic that comes through the hotel website.

Chatbots can be integrated on any platform users prefer to use. The best part being, unlike humans, AI developed chatbots don’t need to be monitored. AI chatbots can reduce your hotel’s bounce rate and generate loyalty amongst your guests by constantly keeping them engaged.

  1. Saves time and effort

The hospitality sector usually gets a lot of routine queries and FAQs. Having a human customer care representative responding to the same questions repeatedly is inefficient. An AI-powered chatbot can efficiently be utilized for such mundane tasks. This enables the customer support team to focus on other more complex tasks.

Cosmopolitan hotel of Las Vegas has a registered AI-powered chatbot named Rose. It is a voice-activated assistant that handles queries from the guests. In case of an unusual question from the guest, it conveys the same to the hotel staff.

  1. Offering Unique Experience

Hotels are coming up with innovative ideas to integrate voice-activated AI chatbots more and more to offer unique staying experiences for their guests. Frequently, guests are more than happy to shed a few extra dollars for unique experiences. Also, creating these experiences help you to stand out from the crowd in the competitive hotel business.

For example, Wynn Las Vegas has integrated amazon echo in 4748 hotel rooms to offer guests control over multiple facilities. It will be able to control lighting, temperature, tv, etc.

Another hotel brand, InterContinental Hotel Group (IHG), is using Facebook messenger as its chatbot platform. Also known as “the neighborhood host,” the AI-powered chatbot can provide recommendations for nearby tourist hotspots.

  1. Brand Awareness

With the evolution of technology, consumers have raised their expectations on how they communicate with the brands. According to gleecus, 69% of consumers prefer chatbots for quick communication. As such, chatbots could be the perfect fit for generating brand awareness amongst consumers.

Whenever someone is interacting with AI chatbots, whether it may be on the website or on your hotel premises, they learn a lot more about your brand than they traditionally used to. This generates loyalty, increases customer retention, and broadens your market reach.


While the whole world is taking advantage of AI development in chatbots, why should the hospitality industry be left behind? As per research made by Salesforce, the use of chatbots is projected to grow a whopping 136% over two years span. As such, it is the perfect time to blend in with the new trend. We hope this blog has helped to showcase the usefulness of AI chatbots in the hospitality industry. In case of any queries, do not hesitate to write to us in the comments section.

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