Hospitality Technology 2020 By Karthik Namasivayam

Fri, 19 May 2017

The Hospitality Management department at the Rochester Institute of Technology is housed in the College of Applied Science and Technology. I cannot imagine a more appropriate home for a hospitality program today, given the rapid incursion of technology in a historically tech-shy, high-touch oriented industry. Technology is everywhere: Josh Bersin notes that business models are being rapidly disrupted and organizations have to respond to the growth of artificial intelligence (AI) and robotics. Platform technologies and business models are displacing established ways of doing business. The hospitality industry is not immune to these developments – witness Airbnb, a prime example of the platform revolution and its impact on legacy hospitality (if only at the peripheries at this point). Other technologies are advancing as well and as Carson Booth, Vice President Global Property Technology at Marriott International, notes, technology such as "AI will become embedded and ubiquitous" in the hospitality industry.

The purpose of this essay is to understand some technologies that will impact the hospitality industry in the near future – the year 2020 is arbitrary, I had first titled the article as 'Hospitality Technology 2025' but the pace of technological developments shifted the horizon! In a survey of the rapidly growing commentary stream on technology, it appears the following will have a great deal of impact on the hospitality industry: robotics, 3-D printing, internet of things and data, artificial intelligence, and "trust-through-algorithms-and-ratings". Each of these is elaborated in the next paragraphs. Caveat: This is a very quick overview. Each of these technologies is complex and is associated with a number of 'human' and moral questions. For example, who is responsible for a death if the vehicle causing the accident is a self-driving car? Are consumers ready to accept a high-tech, low touch hospitality environment? Is society ready to support displaced employees? And there are, of course, other technologies not covered here.

Robotics has the potential to be a big disrupter of current hospitality industry models. A number of trends – advances in robotics, the ability of robots to 'empathize', to touch, feel, the development of sensor technologies, and demographic and societal changes that accept robotics as a given in many service jobs means that robots will become increasingly common in the industry,. Already a number of hospitality organizations both large and small are 'proof-of-concept' testing robots in their front office and check-in operations – for example Hilton (McLean, VA), and the Henn-Na Hotel (Japan). Other applications include in housekeeping and in the kitchens. Currently, Asian consumers appear to be more readily accepting of service and humanoid robot servers and support staff than in the West. The International Federation of Robotics predicts strong growth in a variety of applications to the end of this decade. This trend towards greater number of robots becoming inserted into the service-value chain is likely to grow stronger with advances in artificial general intelligence, deep machine-learning, and neural networks.

3-D Printing is another area that may have profound effects on a number of hospitality operations areas including in the kitchens, engineering, guest amenities and related areas. If spares can be printed on-demand, associated costs will probably change. On a larger scale, even complete hotel buildings can be 3-D printed – an extension of the modular construction methods adopted by a number of hotel companies in Europe and in the US. A number of companies are experimenting with 3-D food printers for the domestic markets. How much longer before 3-D printers render room-service obsolete? When 3-D printed foods gain wide acceptance in the domestic markets, it has implications for take-away and eat-in restaurants alike. Together with robot kitchens that produce chef quality meals, 3-D printing will transform the F&B industry.

Data Mining and the Internet of Things (IoT) is increasingly becoming important in industry. John Keller notes that "billions of sensor-driven devices [connected] to each other, the Internet, national networks and distant cloud-based applications" carry large amounts of data "that can be captured and analyzed" to enhance business operations. He identifies the hospitality industry as one that depends on the IoT to personalize the guest experience. Mobile devices are used by guests to check in and enter their rooms, sensors adjust room temperature and lighting to guest requirements and help provide the guest a unique experience. Data collected from guest stays help rationalize the use of power and utilities in hospitality operations. Some utility companies can now remotely manage home thermostat settings to reduce the consumption of fuel and provide economies to both homeowners and the utility. The data generated from the various devices that guests and hospitality associates use can provide valuable insights that will enhance guest experience; customized, individualized experiences will be only a button away.

Artificial Intelligence (AI) appears to be the lifeblood of the advancements in robotics and IoT. Experts distinguish between generalized and specialized AI. Specialized AI is about using algorithms to figure out increasingly complex but narrow set of tasks; generalized AI refers to the ability to discern actionable patterns out of masses of data using neural networks and deep learning. The driverless car, IBM Watson's abilities, and Google's DeepMind project are examples of generalized AI. As AI becomes more sophisticated, a number of tasks in the service value chain can be replaced with AI driven robots – for example, hotel room pricing decisions or inventory management. Already concierge services, room service delivery, and housekeeping operations are supported by AI. For the hospitality industry, simultaneous translation capable robots may replace consumer contact service individuals.

Trust through algorithms and ratings is an area that has great significance for how hospitality operations are managed. EBay and Airbnb are examples of this: both buyer and seller rate each other and this defines the level of trust and propensity to do business again. It also defines the ability of the seller to attract new buyers. In an increasingly algorithm and ratings mediated business environment, organizations have to perhaps reimagine their customer relationship models – how is trust in a brand generated? The ability to build trust through algorithms and the advent of the 'gig' economy may change the employer-employee relationships and have an impact on hospitality industry employment practices.

Conclusion

Hospitality organizations will have to respond as these various technologies are adopted at a higher rate in the general organizational environment. It is important that they adopt a proactive and strategic stance and fundamentally (re)design themselves as technology-centered organizations. Technology-driven transformations will impact the structure of the industry as well: in some organizations, technology will be used visibly front and center (for example, service robots) in guest interfaces and back-of-the house operations with the aim of economizing. In others, technology will be used in back-of-house and support operations but have human guest relations experts at the guest interface to provide the 'high touch' experience that those willing to pay premiums for it will demand. Back of the house operations such as inventory management, room pricing decisions, or human resource management are likely to be equally technology driven. The choices made about technology and human interfaces with guests will distinguish groups of organizations.

Thus, it appears that the industry is on the cusp of a very big transformation driven not only by technology but also demographic and economic changes.

References

  1. Namasivayam, K., Enz, C. A., & Siguaw, J. A. (2000). How wired are we? The selection and use of new technology in U.S. hotels [Electronic version]. Cornell Hotel and Restaurant Administration Quarterly, 41(6), 40-48. Retrieved12/19/2016, from Cornell University, School of Hospitality Administration site: http://scholarship.sha.cornell.edu/articles/490/
  2. https://www.linkedin.com/pulse/business-talent-hr-predictions-2017-everything-becoming-josh-bersin
  3. https://www.accenture.com/t20160804T100550__w__/us-en/_acnmedia/Accenture/Omobono/TechnologyVision/pdf/Technology-Trends-Technology-Vision-2016.pdf#zoom=50
  4. http://www.hotel-online.com/...gence-ai-is-checking-into-your-hotel?utm_medium=email&utm_source=Offer&utm_campaign=10-18-2016#[10/18/2016 4:10:07 PM]
  5. Alec Ross (2016). The Industries of the Future. New York: Simon & Schuster, (p. 92).
  6. Scott Dadich with President Obama and Joi Ito. (November 2016). Wired: Frontiers, pp. 125-
  7. Alec Ross (2016). Ibid.
  8. http://intothefuture.eiu.com/robots-smart-and-getting-smarter/[11/16/2016 1:36:17 PM]
  9. http://www.intellibotrobotics.com/
  10. http://www.moley.com/
  11. www.ifr.org/fileadmin/user_upload/downloads/World_Robotics/2016/Executive_Summary_Service_Robots_2016.pdf
  12. https://intelligence.org/2013/08/11/what-is-agi/
  13. Anonymous (1974). DOI: https://doi.org/10.1177/001088047401400412
  14. https://3dprint.com/129130/foodini-food-3d-printer/
  15. http://cbcommunity.comcast.com/browse-all/details/mining-the-internet-of-things
  16. https://www.ibm.com/blogs/internet-of-things/smart-meter-grid/
  17. Alec Ross (2016). Ibid.

Karthik Namasivayam, Ph.D.

Karthik Namasivayam, Ph.D. is Chair of the HTM Department at Rochester Institute of Technology. He has over 30 years of experience straddling industry and academia in consulting and organizational design. He has lived and worked on three continents as Operations Manager, Project Consultant, Entrepreneur, Educator, and Education Administrator. His current interests include the intersection of technology and hospitality, technology driven organizational design and strategy, and hospitality pedagogy. He welcomes conversations about technology and its strategic impact on organizations of the future. He can be contacted at kxnism@rit.edu

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