Artificial intelligence for the hotel industry and other key trends for 2023

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2023 is looking more promising for the hospitality industry than at any point since 2019.

 However, the road to recovery won't be without bumps along the way.

With inflationary pressures and tight labor markets, hoteliers need to be proactive in finding ways to optimize their operations and stay ahead of the competition.

One tool that can help is artificial intelligence (AI) and machine learning.These technologies are quickly gaining traction in the hotel industry as a way to increase efficiency, reduce costs, and improve the guest experience.

Operating a hotel got a lot more expensive in 2022

2022 was a challenging  year for many hoteliers, as rising energy and staffing shortages persisted. In the UK, RSM and Hotstats data found that utility prices had nearly doubled since 2018 and had increased by 49% compared to pre-pandemic. The Irish Hotel Federation (IHF) found in a mid-2022 survey that electricity costs had risen by over 400% and gas by more than 300% for its members since 2019.

Meanwhile, the market for labor remains a consistent issue post-pandemic for the hospitality industry, with a huge number of unfilled positions globally, particularly in developed countries.

For example, as of the end of last year, the accommodation and food services segment had by far the highest vacancy rate of any sector measured by the US Bureau of Labour statistics. This is putting pressure on wages and therefore, hotel balance sheets bottom line.

2023 is a year of transformation in the hospitality industry. Hoteliers will need to prioritize efficiencies and embrace new, intelligent ways of working to maximize every resource the hotel has at its disposal.

Artificial intelligence (AI) can significantly impact hotel revenue management

Every year, you can count on new technological innovations featuring in numerous trend lists, with AI usually hovering at the top of the pile. But in 2023, their importance has grown exponentially and AI is front page news.

The buzz around Chat GPT is well-deserved, with the world’s fastest-growing application reaching 100 million active users just two months after launch. Chat GPT is an AI chatbot with myriad uses, but how can AI translate to a hotel setting?

With labor still at a premium and with no relief yet in sight AI and machine learning can be leveraged to lighten the load and generate value throughout a customer journey.

When it comes to guest communications, AI chatbots and virtual assistants will continue to mature and be able to easily respond to basic guest questions, reducing the need for staff members to answer and allowing them to focus on more strategic tasks.

You can also provide a superior experience for your guests by leveraging AI-powered smart room technology. This will enable you to maximize maintenance efficiency while effectively managing energy usage.

In the pre-stay phase, you can reduce the burden on commercial teams through the use of predictive analytics to give you a market breakdown and projection in seconds - rather than manually gathering data and working your way through spreadsheets for hours or even days to generate a demand forecast.

Market Insight, our predictive market intelligence solution, is powered by unique AI demand segmentation technology, which turns billions of forward-looking search data points per destination into real-time demand levels, all broken down by sub-location, stay pattern, and hotel type.

Demand and market occupancy forecast for Melbourne, Australia - March to August 2023

Melbourne demand occupancy

The graph above is a sample of the forward looking data that Market Insight can generate using AI technology. This looks at the demand level and market occupancy for the city of Melbourne up to September 2023. 

Take note of the huge spike in market occupancy on the 1st and 2nd of April - the time of the Melbourne Grand Prix - where it touches 91% market occupancy. AI can be used to spot early demand and occupancy trends for events in your market, so you can put the correct pricing and marketing strategies in place.

Armed with this advanced demand intelligence in a single dashboard, you can quickly grasp pre-booking market demand at your hotel and take advantage of potential revenue opportunities as demand shifts with the appropriate pricing and marketing strategies.

The guest experience gets more mobile

As guests increasingly use their smartphones to search for and book hotels, this device acts as a potential gateway to a greater array of hotel amenities; then it only becomes more central as both a mechanism to draw in valuable data and as a way to drive revenue and reduce costs.

 Mobile phone hotel booking

Consider a mobile app that connects to a Property Management System (PMS). With this app, hotels could deploy a contactless hotel check-in, and after arrival, those guests can then book a spa treatment directly from their device.

This reduces the workload for the front desk, helping to ease the staffing crunch while creating a channel for push notifications and gathering information on what hotel and room services are utilized. This data can increase profitability for the hotel and improve the connection with the guest. 

The rise of APIs in the hotel industry

Building a connected hotel needs systems to communicate with each other, which is where Application Programming Interfaces (APIs) will step in.

An API acts as an intermediary, allowing plug-and-play capacity for different software and applications, and as the ecosystem of hotel tools grows each year, APIs are only becoming more important for connecting and organizing hotel tech stacks.

We too have seen this trend growing, which is why there are more and more automated features available on our commercial platform. The Lighthouse platform consolidates data streams from across a property into a cohesive and customisable whole. This way a team can understand a hotel’s daily operations at a glance.

At a time of such constrained capacity, this clarity and ease of use is critical to getting more done with less. This is why APIs, with their ability to bring together teams and integrate elements in a hotel operation, are on the rise.

The return to business-as-normal means hotel rate parity is back on the table

One topic that had been pushed aside during the pandemic was rate parity. It has now made a return to hotel owners’ dashboards and will continue to do so in a big way in 2023.

As the accommodation sector gets closer and closer to pre-pandemic demand norms, there is a need to return to policing rates advertised for properties.

This is especially true when margins are being squeezed and when undercutting can have more significant ramifications than usual. Google’s continued focus on hotels as part of its Hotel Ads product provides an enhanced route to direct booking and also pushes the OTAs to be even more cutthroat to capture bookings through aggressive pricing.

A trend we expect to be realized in 2023 is a refocusing on rate parity and partner management. If this is a struggle for your business, try our Parity Insight tool (for chains and management companies) and Rate Insight+ (for all other properties) to receive real-time price checks across all platforms and configurable alerts that can help put an end to losing money to disparity.

Sustainability on the up to push hotel energy usage down

When it comes to cutting running costs for a hotel, few measures can stand up to the potential of investments into sustainability in 2023, which is why we believe it will be one of the leading trends this year. 

Sustainable practices and technologies can have an immediate effect and reduce the inputs required to run an energy-intensive operation, thus immediately reducing those all-important overheads and boosting profitability. 

What’s more, guests are increasingly environmentally conscious, giving this trend a further boost by increasing your property’s credentials to the consumer.’s large-scale, multi-country sustainability study revealed that the percentage of travelers that wanted to increase the time and effort they put into sustainable travel rose 10% from 2020 to 2021, while just shy of three quarters said they wanted to stay in a sustainable property at least once in that year.
Sustainable wind farm

This too comes back to the connected hotel, as the most effective way to cut overheads and become more sustainable is to reduce usage across a property, which can be done through the deployment of smart systems, with relatively low disruption and cost.

These range from being as simple as movement sensors to a more comprehensive system that monitors usage throughout a hotel using linked internet of things and smart metering to learn where energy is being used and to try and then reduce that through more closely matching true demand.

These are less time and cost intensive than major infrastructural upgrades, such as changing a heating system of cavity wall insulation.

However, the harsh reality of the last year has shown that hotels will also need to invest long-term into larger projects to make their properties more sustainable, so this is a trend we will continue far beyond 2023.

Hotel software is here to offer your hotel a helping hand in 2023

With hotels becoming more expensive and complicated to manage in 2023, ensuring that your team is equipped with the right tools to maximize efficiency and profitability is vital. 

At Lighthouse, we understand hoteliers’ challenges, and are committed to providing an innovation to help you stay a step ahead of shifting conditions, and your competition. 

So whether you’re struggling with labor shortages or deciding how to navigate this highly competitive market, contact us today to learn how we can help you optimize your commercial performance.

Do you want to unlock the power of AI at your hotel in 2023?