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HSMAI ROC Toronto: Leveraging AI To Create a Customer-centric Experience

Once again, this year’s HSMAI ROC conference gave hoteliers the chance to discover the latest traveler trends in leisure, group, and business travel. From the growing demand for group experiences to the evolving needs of business travelers and the shift towards value-driven leisure trips, this year’s event, held in Toronto June 26-29, had plenty of talking points. Naturally, one of those was how generative AI can personalize experiences for leisure travelers.

Groups: Meetings & Events are Back

Group demand is on the rise across North America, with a particular focus on Phoenix, Tampa, and Las Vegas.

During the discussion led by Mike Dominguez at ALHI, it became evident that this increased demand translates into significant hotel industry investment. Year over year, hotel projects have seen a remarkable growth of 17.4%, while construction spending has surged by 41%. These figures highlight the positive trajectory of the industry.

However, it's essential to recognize the evolving nature of meetings and events. They are no longer confined to traditional models but have become purposeful and meaningful connections, particularly in light of the pandemic's impact. The need for these gatherings has been accelerated, as they play a critical role in fostering employee engagement and aligning business objectives. In 2022, internal company meetings accounted for 19% of all business travel expenditure, underlining their significance.

To meet the evolving demands of event planners, hotels must explore different formats and models for their programs. They should consider pricing every aspect of their property and services to maximize revenue opportunities, even offering unique experiences like hosting morning yoga sessions in the gym if desired by the group. Every inch of a hotel holds potential, and groups crave exciting and distinctive ways to connect that make leaving the comfort of their home office worthwhile.

While the short-term outlook for demand remains positive, it poses its own set of challenges for hotels, including issues of displacement. 

As the industry continues to recover and grow, hotels must adapt to changing expectations and leverage every opportunity to provide exceptional experiences for their groups. 

A Transformative Shift in Business Travel 

In recent years, the business landscape in North America has witnessed a significant surge in new ventures. While the average number of new businesses started in a calendar year stood at 3.5 million in 2019, this figure rose to an impressive 5 million in 2022. As a result, the needs of business travelers have also undergone a transformative shift, deviating from the traditional traveler archetype.

During the presentation by Suzanne Neufang, CEO of GBTA, she highlighted the current state of global business travel. According to the GBTA business travel index outlook, we are projected to reach 80% of pre-pandemic levels in 2023. However, even with this recovery, the overall size of the global and U.S. economies is expected to make business travel a smaller component in comparison. Notably, the Asia-Pacific region represents 50% of global business travel spend, with Finance and Insurance, along with Professional Services, emerging as the industries with the strongest business travel expenditure.

Looking ahead, GBTA is monitoring trends in two crucial areas: people and the ecosystem.

People: The travel industry continues to grapple with workforce challenges that have a significant impact on airlines, border controls, and handling staff. These challenges have led to increasing frustration among travel professionals and have even influenced their decision to travel in the first place. For hotels, the most significant opportunity lies in catering to the "bleisure" traveler, those who combine business and leisure during their trips. Creating a service offering that fulfills the needs and desires of both types of travelers is critical in capturing this market segment.

Ecosystem: All hotels must now consider sustainable business practices to meet corporate travel RFP requirements. However, this goes beyond mere compliance. Business travelers seek accommodations that align with their values and prioritize sustainability. By embracing environmentally friendly practices, hotels can attract and retain this growing segment of conscious travelers.

As the business travel landscape evolves, stakeholders must adapt and address the changing needs and expectations of business travelers. By embracing new trends and aligning with traveler values, the industry can forge a path toward a sustainable and prosperous future.

Leisure Continues to Lead the Way

During a travel sentiment study presented by Amir Eylon, President and CEO at Longwoods International, key trends for leisure travelers were highlighted. Notably, leisure travel continues to lead the way, with a significant focus on activity-based trips. Furthermore, 1 in 4 travelers are embarking on "different" types of trips, indicating a shift in purpose, and their priority is finding value rather than seeking discounts.

For hotels, this presents an excellent opportunity to shift their approach. Instead of solely relying on rate discounts to attract guests, they can emphasize the inclusion of benefits, ancillary services, and added-value items. By offering experiences rather than material things, hotels can capture the attention of travelers. Consider incorporating perks like spa access, free guided morning runs, and complimentary bike rentals as part of the overall package, rather than immediately reducing the Best Available Rate (BAR).

One challenge hotels may face is managing travel dissatisfaction stemming from low staffing levels. To mitigate this, setting proper expectations through effective communication becomes crucial. If housekeeping services are available upon request only, it is essential to inform guests in advance, emphasizing the significant environmental benefits of this approach. 

Transparent and positive guest communication is a powerful tool that hotels can leverage to address reduced staffing concerns. By proactively sharing information and maintaining open lines of communication, hotels can reshape the narrative and enhance guest satisfaction.

By embracing these strategies, hotels can align their offerings with evolving traveler preferences and create memorable experiences by prioritizing value, sustainability, and transparent communication.

Leveraging Generative AI

Finally, embracing generative AI can influence the above by designing personalized stays for the leisure traveler. Generative AI algorithms can analyze vast amounts of data, including travel preferences, past experiences, and online behavior, to provide personalized recommendations to leisure travelers. Hotels can leverage this technology to suggest tailored activities, local attractions, dining options, and even room amenities that align with the individual traveler's interests and preferences.

The travel industry is evolving rapidly, and hotels can thrive by embracing emerging trends and leveraging generative AI. From group travel to business and leisure experiences, the future holds exciting possibilities. Embrace trends, harness technology, and create a customer-centric travel industry.

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