How Automation and AI Are Becoming the Key To Hotels' Post-Covid Survival

It is not really clear that digital technology really makes hotel guests physically (or digitally) safer, given that the virus is spread primarily by air and tech may exacerbate financial vulnerability, but if it helps guests believe they are safer, than it will continue to be deployed to a greater degree. JL

Sara Castellanos reports in the Wall Street Journal:

U.S. hotel occupancy collapsed from 60% in February to 22% in April. It has since recovered some, at about 48%. Recovery could depend on how safe guests feel. Hotel companies are doubling down on automation and fast-tracking technologies such as digital room keys and voice-activated digital assistants to minimize contact between guests and hotel staff amid the coronavirus pandemic. Guests can process payment, verify their identity and obtain a digital room key through a mobile app, use AI-based devices to control lighting and the television, avoiding touching light switches and remote controls, and ask digital assistants for extra towels or request late checkout.

U.S. hotel companies are doubling down on automation and fast-tracking technologies such as digital room keys and voice-activated digital assistants to minimize contact between guests and hotel staff amid the coronavirus pandemic.

The initiatives, overseen by information technology executives, are aimed at helping hotels dig out of what has been a dire season, with steep declines in occupancy, staff layoffs and a fear among some guests of contracting Covid-19.

“Without technology, there’s no way those companies recover fully,” said Les Ottolenghi, who was chief information officer at Caesars Entertainment Corp. until last November. Caesars merged last month with Eldorado Resorts Inc.

U.S. hotel occupancy collapsed from about 60% in February to roughly 22% in April, according to data analytics firm STR, owned by CoStar Group Inc. It has since recovered some, ending the week of July 25 at about 48%.

But any recovery could depend on how safe guests feel.

Darren Clark, vice president of technology at West Hollywood, Calif.-based Viceroy Hotel Group, said his role has expanded to include overseeing the use of cleaning technologies such as electrostatic sprayers. The sprayers, used to clean rooms at many locations, deliver an electric charge to a disinfectant to help the minuscule droplets adhere to surfaces.

Eight Viceroy locations world-wide are currently open and another five will reopen soon, according to the company website.

Mr. Clark is also working to reduce physical touchpoints in the rooms by rolling out voice-activated digital assistants such as Amazon.com Inc.’s Alexa. Guests can use the AI-based devices to control the lighting and operate the television, while avoiding touching light switches and remote controls.

“It gives guests peace of mind,” he said.

Guests can also ask the digital assistant for extra towels or request a late checkout, because the devices are integrated with IT systems such as the company’s cloud-based property management system, made by Oracle Corp.

Guests who don’t feel comfortable interacting with staff at many MGM Resorts International hotels in the U.S. can process payment, verify their identity and obtain a digital room key through a mobile app on their phone. The technology, built by in-house software engineers, became available for guests at more than a dozen U.S. locations that started reopening in June.

Some features of the contactless check-in technology were previously available to certain guests at the company’s Las Vegas and Springfield, Mass., properties beginning last year. Plans to bring the technology to other locations in the U.S. were accelerated by about six to nine months because of the pandemic, said Atif Rafiq, president of commercial and growth at Las Vegas-based MGM Resorts International, who oversees the technology division.

“Technology is at the core of almost every element of the customer experience as we reopen,” Mr. Rafiq said.

Atif Rafiq, president of commercial and growth at MGM Resorts International.

PHOTO: MGM RESORTS INTERNATIONAL

The company, which operates 29 hotels and casinos world-wide, posted a 91% decline in quarterly revenue last month. About 62,000 of the company’s employees were furloughed between March and June, but as properties have reopened, tens of thousands of employees have been brought back to work.

Employment in the leisure and hospitality industry, which includes sectors such as accommodation and food services, grew by 2.1 million in June, according to the U.S. Bureau of Labor Statistics. But the industry has lost 4.8 million jobs since February. McKinsey & Co. research suggests it could take until at least 2023 for the hospitality industry to recover to pre-pandemic levels.

RLH Corp., with more than 1,000 independently-owned and operated hotels, said in April it would reduce its corporate workforce by roughly 40% to about 100 full-time employees in a cost-cutting move that was accelerated by the pandemic.

“The reality is the pandemic has impacted all of our staffing levels and budgets and forecasts,” said John Edwards, chief information officer at the Denver-based company, which is also known as Red Lion Hotels Corp.

The company is developing software built by in-house employees to automate the way invoices are generated, for example. It is also using artificial intelligence-based software built by cloud communications firm BluIP Inc., based in Las Vegas, to answer questions from hotel customers via phone, such as those related to check-in time, restaurant hours and directions to the hotel.

UiPath Inc., a New York-based provider of software that companies use to automate tasks, said it saw a 30% increase in new customers from the hospitality industry during its first quarter ending April 30, compared with the same period a year earlier.

At RLH, “We’ve prioritized anything that has to do with automation,” Mr. Edwards said.