The Possible Impact of AI (Artificial Intelligence) on Business Development

Executive Summary

The report is based on the planning for development of better services through AI application in the Lancaster Hotel and Spa. The report has analysed whether AI-based technology would be helpful for the business of the hotel and spa. In Lancaster Hotel and Spa, AI wouldbe used for customer accommodation and the fast services in the organisation. Application of service-dominant logic theory would helpto improve service values and product quality.Lancaster Hotel and Spa provides different services like premium services in breakfast and spa and boardrooms. Therefore, accommodation related AI technology and high quality chatbots would help to improve the factors in the services.

Table of Contents

Introduction. 3

Need or challenges. 3

Approach. 5

Choice of Approach. 6

AI based innovation approach. 8

Market awareness. 10

Outcomes and route to market 10

Wider impacts. 11

Risks. 11

Added value. 12

Project management 12

Conclusion. 12

References. 13

Introduction

Lancaster Hotel and Spa is one of the most popular hotels in the UK business. The organisation has provided different services and products for attracting and retaining customers. The company has improved its services in Dining, breakfast, accommodation, bar and spa. These above mentioned activities would be focused for betterment of profits and revenues for the hotel chains. Through different platforms, the hotels executed bookings and reservations in the hotels. Lancaster Hotel and Spa used diverse services like end-suite rooms, boardrooms and renovated lounge bars along with a `la carte restaurant. The report has analysed whether AI-based technology would be helpful for the business of the hotel and spa.

Need or challenges

It has been found out that the market revenue of AI-based technology would be $89847.26 million by the end of 2025. Therefore, for better protection and high quality services and most importantly to maintain business relevance, the company should apply AI-based technology in their business.

Figure: market opportunities of AI

Source: (Statista.com, 2021) with the help of different AI based technology, the hotels and spas would help to identify the insights of the business with the customer trends and attraction. Customer services and support in the post-Covid situation would prefer a “no-touch” approach. Moreover, the UK hospitality market is trying to overcome the huge loss due to COVID.  Therefore, to maintain the health and safety, the hotels and spas can improve or implement AI-based technology so that the attendants and service providers would not be needed to present physically all the time. According to a report of Infosys (2021), 70% of online agencies and 60% of hotels have used AI-based technology for the development of a more sustainable tourism industry.

Figure: Declination of UK hotel industry due to COVID

Source:(knightfrank.com, 2021)

  Target marketing and better supply chain can be obtained by the AI technology as the company would get better insights and services for the company. AI is beneficial for maintaining supply chains when it comes to larger business aspects. Stocking and deploying different supplements and products could be maintained by AI technology easily. On the other hand, the factors associated with running a long supply chain and improvement of services. Technological issues wouldarrive when demonstrations of the services are needed by the customers. In many cases Augmented or Virtual reality technology would help the customers to improve their perception about the hotel.

Figure: Application of AI-Based technology in the Hotel industry

Source: (Infosys, 2021)

Approach

Integrated business models are used for the application of AI in the hotel. Mishra and Triatic (2021) stated that AI models would help to improve factors associated with the development of different digital platforms.  The study also analysed that implication of AI would help to improve higher levels of functionality. In the organisation, higher level managers would help to improve different types of factors for better management and services. Both rule and learning based AI modelling would be used in the hotels. Both the business models and business model innovationsshould be used in the implementation of AI. Organisational acceptance and competencies would improve the services.

 In Lancaster Hotel and Spa, AI wouldbe used for customer accommodation and the fast services in the organisation. Application of service-dominant logic theory would helpto improve service values and product quality. Therefore, with the help of different accommodation related factors like cost of rooms, potential benefits, choice and trends among the customers would help to improve the factors associated with the development and technology (Ream et al., 2020).  Moreover, pre and post experiences can be enhanced with AI applications in hotels. Through social media sites and direct response, hotel owners and managers are able to understand the trends and values of the market. Chatbots would be launched for better communication and direct feedback for the customers. Therefore, both to improve both customers’ accommodations and fast services would be required for the hotels.

Choice of Approach

AI wouldbe implemented for better customer accommodation and faster services in the mentioned hotel for better services and development. Lancaster Hotel and Spa can helpto improve ultimate comfort and service. Moreover, the hotel and spa aims to provide monitored and high standard services. Therefore, with implementation of the AI better monitoring would be observed in the hotel. AI technology would be able to select proper services for the customers as related Chatbots and feedback systems would help to improvethe knowledge of the service providers.

The company aims to provide ultimate comfort and luxury in the hotels. On the other hand, comfort and services with monitored performances would helpto improvethe services to the customers. Lancaster Hotel and Spa provides different services like premium services in breakfast and spa and boardrooms. Therefore, accommodation related AI technology and high quality chatbots would help to improve the factors in the services.

AI project would help to improve customer accommodation by avoiding booking friction and providing appropriate rooms to the customers with a set algorithm in the company. The project can increase the rate and effectiveness of monitoring opportunities.  Moreover, AI technology would help to apply innovation in the betterment of businesses monitoring and evaluation in the project.

Key tangible resources which can be achieved by AI technology are higher revenue and wider customer pool. The company would be helped with the development of AI. Reim et al. (2020) observed that the planned services and seamless booking processes improve revenue of hotels as the customersare highly satisfied. Luxurious products for refreshments and entertainment would helpto improve the reputation of hotel and satisfaction levels of consumers.  Therefore, requesting for additional charges in different other services like sightseeing, foods, extravagant cars and others would be easier. On the contrary, cost saving services would be observed in the hotel after application of AI technology as the requirement of workforce in the front office and services would be reduced. AI projectswould help to maintain current rate and budget for accommodations. Therefore the factors associated with room services and deserting would possibly improve. Better revenues would attract higher investments with better returns. AI technology would improve the quality of appearances and the speed of services and these would help to improve the opportunity of investments.

Higher levels of customers would be attracted to the hotels with AI implementation as AI technology in the services would improve the reputation management and safety provision in the business. With the help of AI implementation in the hotel, fast services like messaging automation, facial recognition and monitoring for services would help to improve the reputation of the company. Therefore, the popularity of the company can be improved with the services in hotels. With the AI technology, safety processes would be enhanced which can also acquire high numbers of customers.

Faster delivery would require a higher workforce which would not maintain the cost in the company. Balanced budget and improved cost-saving would help the hotels to attract more investments and increase the revenue. AI technology would improve the quality of services which would enhance the COVID safety and social distancing. As AI functions with the help of an in-build algorithm and strategic designs, the timeliness and speed of the actions would be improved with the help of different factors in the hospitality sectors.

AI based innovation approach

Business innovation approach for the hotel and spa is a digital application. The digital application would help to improve communication and interaction among the consumers and hotels. The customers would download the application in their mobiles. From the applications, frictionless and faster booking processes and communication. The company would install a chatbots and virtual assistant in the application. The application contains reviews and feedback options.

 In the application the company would be able to take bookings and a unique code would be generated. The codes would be used as the stickers on the complementary products and as a seal in the junctions of the doors as a proof of sanitization.  Digital applications would help to improve the payment and booking without any physical touch. The mobile application would help to improve different factors and services in the hotel. With the help of this application the consumers can order and enquire anything from and aboutthe hotel. For more enquiry, customers would avail an ‘option’ called ‘ask more’. This option would help the hotel professionals to get unsolved enquiries by the Chatbots.  In-built chat bot and application can be used for placing complaints and this section would be handled by the company with the fastest approach. The consumer would get a complaint id for better assistance.

Use of technology would not be a new or profit affecting approach in the market therefore, the AI technology would not affect the profit making capacity and the services of the hotels. For example, Holiday Inn, one of the largest hotel chains in the UK, invested $5.6 billion in the digital technology process (IHG, 2021). The company has shown that the digitalisation and AI based technology has improved the revenues in the company. Moreover, Hilton group has incorporated AI technology in booking and customer services in the UK, therefore; company was able to get a higher reputation. Hilton group would implement Digital Key for 5100 Hilton’s properties for contactless experiences for the customers (Hilton, 2021). With the help of this AI regulated system 112 million rooms’ doors would be opened (Hilton, 2021). The application was used for controlling or customising lighting, room temperature, television programming and other services in the hotels. Marriott international has improved their apaches with digital implementation. Hence, it can be said that the Lancaster hotel would also improve their reputation as well as customers’ interests. This hotel would help to improve their revenue with the development of services in the company.

            Holiday Inn has invested in the digitalization so that the company could improve 7% of the revenue from 2018 (IHG, 2021). The company would help to improve therevenue ofthe company. Therefore, Holiday Inn used artificial intelligence in the development of customer satisfaction. Marriott International invested in technology and digitalisation in the last few years (Marriott International, 2021). The company could experience better revenues also. However, the revenue of the company was related to different factors than digital implementation (IHG, 2021). Therefore it can be observed that the companies benefited with the development of different technological innovations in the company.  The selected hotel could improve its revenues by applying the AI systems so that the company would not haveto pay money to third partyvendors and partners for booking. The company would get cost-effective service technology which would improve the monitoring and surveillance.

Market awareness

In the UK, domestic overnight holiday trips were available to most people aged 45-54 years.  On the other hand, the most frequent international visitors are aged 25-44 years. Therefore, the hotel would consider the age group of 25-54 years which includes both international and local customers (Statista, 2021). AI applications would help the people of 45-54 with its simple digital application. On the other hand, the international tourists would also analyse the factors of the applications. The applications would help to improve the accessibility in the company. The simplified application interface would enhance the usability for the aged domestic tourists.  On the other hand, the company would improve the application in a way so that both international and domestic tourists could benefit from the development. Lai (2015) stated that an application based tour guide improved the entertainment and in formativeness as the performance expectancy, social influence and effort expectancy were enhanced. The performance of the app would improve the experience of international tourists. Therefore, it can be observed that AI based technology would help to improve the demands of international clients by enhancement of technological implications. On the other hand, therefore, the Lancaster hotel and Spa would definitely get better results by incorporating AI projects.

Outcomes and route to market

            With the help of this AI project. The Hotel can improve the safety and security among the customers and would help to improve the customers with personalised factors.  In the long run of the business the application would be used as the tour guide as a diversified service. For example; it has been observed that Fujitsu and Exists Inc. used AI systems to guide aged tourists while visiting Japan and the users were very happy with the performance of the AI-regulated systems (fujitsu.com, 2021). Moreover, as the domestic population is quite aged than that of the international tourists, the company can add a feature which would specially deal with the aged people or tourists. The AI application can be added with online cab services for better product development. 

Wider impacts

            Implementation of the AI-based technology would help to improve the factors associated with the business reputation and the long-term effectiveness of services. Rate of wastes would be observed in the hotel. Cancellation and booking process would be easier for the company. The company would get better results in adding these AI-regulated applications. On the other hand, the reputation and appearance of the company would be improved. Moreover, the AI regulated applications would help to enhance the experiences of the customers. There are different monitoring systems and evaluative designs to improve the travel experiences.

Risks

The main risks related to the application are technological issues and troubleshooting. As the project is developed with complicated algorithmsand programming, the company might face huge issues while fixing. On the contrary, the company would need highly qualified people to manage technological glitch. The application might have risks of cyber security and hacking, therefore, the client might lose their personal data and information. In many cases, the customers might not be adequately educated and competent enough to operate the applications (Baker & Robinson, 2020). Therefore, it would be critical to make them understand. The application would be designed in English so that foreign tourists would have faced critical factors.

Added value

AI application would help to improve different factors in the experiences of the company. On the other hand, the factors would help to improve the customer trends and preferences with the help of AI. Moreover, the factors would help to improve the tracking and monitoring of the customers. With the help of AI application, sanitation and disinfecting would improve in the hotel. AI regulated applications would help to improve better implementation and analysis of customer data. This data can help improve the services and products of the hotels. The company would have diverse options in the development of better services.

Project management

To manage the project effectively, a team of IT experts would be hired. The team of project management would also be included while regulating the AI applications. Therefore, the educated and competent team would help to improve the productivity of the services in the Lancaster hotel and spa.

Conclusion

The report has been concluded that the AI application would help to improve the factors for products and services in the hotel. The factors associated with AI application would help to improve added values and customer data. There are different risks in the implementation of AI applications.