Speak to any experienced marketer and they will be able to reel off the famous “seven Ps” that define the profession: Product, Price, Place, Promotion, People, Process and Physical evidence. This is a good place from which to begin a journey towards understanding the present and future impact of Artificial Intelligence (AI) on hospitality marketing.
Types of AI involved in marketing
You cannot think about marketing without going all the way back to the first of the seven Ps: the product; and this is the first area where we can see the impact of AI in marketing.
Already, the technology has proven itself an efficient and effective tool for data mining in order to generate consumer insights. That is incredibly useful in an era where companies are data rich to the point of being overwhelmed. Without the speed of analysis provided by AI tools, marketers can run the risk that by the time they have developed consumer insights at a granular level, the market has already moved on.
Of course, any time we speak about consumer data we must also acknowledge data protection. Companies have a duty to continually reassure consumers that data will not be gathered against their wishes; also that any data they consent to share is handled correctly. As the use of AI for data mining becomes more widespread, demands for consumer protection and data security are sure to become louder.
From a content marketing perspective, we know that brands are already using generative AI platforms such as ChatGPT to produce marketing content. While these systems still have their limitations, for smaller businesses – a standalone boutique hotel, for example – which may not have the capabilities in-house, using generative AI can be cost effective (even when outsourcing to a marketing specialist) as well as offering benefits in terms of speed to market.
Communication relating to your brand is, of course, a two-way process. And on that topic, we are already seeing AI-powered tools being used to enhance searches for a brand’s media coverage. It is not so long ago that one or more members of a marketing team would have to read all the day’s newspapers and take physical cuttings of any instances where their company was mentioned. Now this can be done almost instantaneously – and across a vast array of media – by AI-powered search bots.
Benefits of leveraging AI in marketing
Another of the seven Ps in marketing is promotion. And here the most interesting development is the migration from an advertising-led ‘tell and sell’ approach to one where the focus is on facilitating a conversation between brand and consumer.
However, before you can converse with a consumer, you must first locate and identify them. AI technology can help a brand spotlight its customer segment more precisely, and this is especially important in the luxury hospitality sphere, where premium brands do not need to speak to everybody. I believe luxury brands will invest more in identifying their key consumer group(s), understanding where those people receive their information, and how best to engage with them in a targeted and appropriate fashion.
Of course, conversations with consumers are not just taking place in the online world. Hospitality is all about people, another of the seven Ps. In our industry, the face-to-face element means the emphasis will remain on other, more human skills: emotional intelligence, cultural intelligence, and so on. These have far more impact than artificial intelligence when it comes to day-to-day customer interactions.
Where AI can support hoteliers is by equipping them with useful, actionable information about the customer. A good example from the luxury hospitality sphere is Dorchester Collection, which deployed a machine learning AI platform to analyse customer reviews, subsequently using what it discovered to invest in its breakfast product as this was the guests’ most favoured meal. This is important, as in the business of hospitality the guest experience is inseparable from marketing given how the impression we leave on our customers is so crucial to our brand.
Another area in which AI can benefit the hospitality industry is through automating repetitive, menial tasks that are part of hotel operations. This not only removes some of the drudgery from certain hospitality roles; it can also significantly enhance the guest experience, with employees freed up to interact more with guests. From a hiring perspective, it means hotels can focus less on process-oriented skills and more on individuals with genuine ‘people skills’.
Challenges of using AI in marketing
Aside from the data security aspect I touched upon, another challenge for AI in marketing – and one which can be applied across the digital marketing space – is in the area of retargeting.
As a marketing tool, this remains something of a blunt instrument. I am sure everyone reading this piece will have experienced the phenomenon of visiting a consumer website (or similar), which then seems to follow them around the internet through programmatic advertising. It can be immensely off-putting and it is something which I feel companies need to tackle in order to avoid alienating their consumers. The algorithms need to become smarter and more intuitive, so they can actually create value for the consumer.
Another challenge for me is more of an ethical nature. It relates to the ‘P’ of price, and in particular the manipulation of prices based on consumer searches of online travel agents (OTAs) and aggregators, which are themselves representatives of the ‘P’ of place. What I am referring to is the phenomenon whereby you can go on a site and search for, say, flights from London to New York. That activity will be tracked by an algorithm; then, if you leave the site and return to do the same search later that day, the prices you see can sometimes be artificially hiked because the system thinks you must be a committed buyer. Is this ethical?
Opinions vary and some might call this merely a form of supply and demand management. But we are in an age when brand reputations can be shredded in moments if something negative goes ‘viral’ – and with that in mind, some are playing a risky game.
For those not immersed in the world of marketing, it can often be seen purely through the prism of promotion. These are all very visible aspects; but in reality, marketing is a discipline which is extraordinarily diverse. And many of the different facets of marketing can be supported and enhanced by AI technology.
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