Chapter Two

Literature Review

Consumer retention, service efficiency, and value have all been validated as prerequisites for

customer loyalty creation in previous studies. Hotel companies are attempting to concentrate

on the satisfaction of consumer demands as technology advances. However, companies face

many obstacles in providing high-quality services. By combining both customer brand

identity and customer experience, the implementation of an AI-based hotel reservation

system would assist in the development of customer loyalty. Artificial intelligence holds the

potential of bettering service efficiency. Artificial intelligence opens the gates to a slew of

innovative ideas that have the potential to improve the hotel industry's service efficiency. By

introducing an intelligent system with attributes including of Voice-activated assistants,

Concierge robots, Digital assistance, Guest Preferences, answering customer support/ queries

on the spot, will provide an awesome user experience.

AI-enabled Chatbots for improving Customer Service quality:

A chatbot is a software that allows you to send messages and get them answered to in a

manner that mimics a real conversation — but without the need for another person on the

other end.

Chatbots can be used on a variety of websites, including Booking.com and Kayak, where all

provide travel services. However, several hotels also sell chatbots to their visitors. Guests at

Aloft Boston Seaport can use a ChatBotler app to order facilities or get answers to questions

about the hotel.

In the hospitality industry, chatbots and artificial intelligence are transforming the way
booking requests are treated and guests are turned into loyal customers (Buhalis, &

Moldavska, 2021). Conversational bots may potentially replace front-desk hotel employees

who are usually in charge of answering booking-related questions. These intelligent chatbots

build virtual communications by using natural language processing and natural language

generation (text/voice) in native language, allowing humans and computers to communicate

in a regulated, concise, and productive way (Parmar, Meshram, Parmar, & Desai, 2019).

Chatbots will assist with this. Guests will ask these virtual assistants questions and get

information about hotel facilities, city advice, review current prices, and book a bed. And you

can do it when talking with the hotel on Facebook Messenger or WhatsApp, for example. If

the chatbot is unable to answer a comment, it is sent to a member of the hotel team. Through

automating orders, hotels would be able to provide instant customer support on a website that

customers are already familiar with. As a result, conversion rates could increase, reducing

workload in the already overburdened reception area.

Voice-Enabled Virtual Assistants for awesome User Experience:

Many hoteliers claim that AI-powered voice solutions can revolutionize the industry (Ivanov,

Webster, and Berezina, 2017). AI-powered voice-activated assistant is tailored to the needs

of hotels and answers one of the most common questions around voice-activated technology:

as recordings are deleted after 24 hours, ensuring privacy.

For a long time, speech recognition has existed. Apple Siri premiered in 2010, with

Microsoft Cortana following in 2013, Amazon Echo in 2014, and Google Assistant following

in 2016. (Paraskevas, Katsogridakis, Law, Buhalis, 2011).

Conversational AI is used in today's voice-activated applications, allowing users to converse

with robots in the same manner they do with other humans (Buhalis & Moldavska, 2021).

Conversational AI employs techniques such as automated speech recognition (ASR), natural

language processing (NLP), and text-to-speech (TTS). ASR records the audio stream, which

is then transcribed into text and sent to the NLP and its parts to be interpreted (Budzinski,

Noskova, Zhang, 2019). In contrast, NLP is a method of searching for the meanings of

speech inputs in a given context using human natural language perception (Chowdhury,

2003). TTS then uses a number of vocabulary choices to turn a text into synthesized speech.

AI’s analytics tool for improving guest experience:

In order to support hotel visitors and mold their practice, AI programs are widely used in the

industry. For example, at Hilton Hotels & Resorts, Connie (an AI entity similar to Apple's

Siri) can welcome visitors in a number of languages, suggest fascinating places and

attractions, respond to customer questions, customize answers based on occurrence of

encounters, and assist with check-in (Solomon, 2016). From check-in to check-out, hotel

guests are pampered with tailored reviews that maximize their travel and post-arrival options

(dining, drinks, breakfasts, on-property activities, etc.). Hotels will make assumptions about

what consumers are most likely to select after gathering a vast volume of consumer data

using machine intelligence and business-specific algorithms. The analytic capability of AI

will help hotels keep ahead of the curve when it comes to recognizing the next wave of

product or service offerings. It may be used to assess a guest's or customer's identity in order

to pair them with appropriate hotel facilities or packages.

Hotels can predict potential demand and delight customers by imagining just what they

would be asking for before they even ask for it, due to the brilliance of predictive forecasting

and personality branding (Prentice, Dominique and Wang, 2020). The Red Roof Inn hotel
chain in the United States used to read about flight cancellations, atmospheric forecasts, and

flight data in 2013–14. They then unveiled a predictive analytics-based ad campaign, which

attracted mobile device users in the impacted regions, resulting in a substantial rise in

business.

Thanks to the use of GPS features in smartphone devices, the idea of delivering extremely

customized tips based on an individual's needs is gaining popularity. Hotels will be able to

perform such operations with limited effort and without worrying their customers if they

combined predictive analytics with consumer geolocation data.

Intelligence Heuristics in Hotel Revenue Management:

Data-driven modeling and optimization approaches are used for Revenue Management to

identify what you want to sell, where you want to sell it, who you want to sell it to, and how

much you want to sell it for. Customer demand is characterized by nonlinearity, a broad

number of constraints and parameters, and randomness, are all characteristics of hotel

revenue management (Abad, De la Fuente-Cabrero, C, González-Serrano, et al. 2019). It

suffers from the dimensionality curse (Bellman 2015): as the number of variables increases

as the number of variables (number of rooms, expected prices, and capacities) increases. Due

to the large number of reservation rules and constraints, exact implementations using

dynamic programming or alternate global optimization methods are not possible (van Ryzin,

Vulcano, 2008). Intelligent heuristics, or approaches that can strengthen existing solutions

but do not have formal guarantees of optimality, must be used. "Learning" ("reactive")

schemes that change protocols based on the system's experience, prior reservations obtained

up to a moment in time, and the iterative optimization method' previous measures are several

examples of effective heuristics (Brunato, and Battiti, 2019). The paradigm being used, the
 pricing approach as a management method (stochastic demand, and hotel rules), and separate

methods may be defined for the optimization techniques used to figure out how to improve it

or find the best solution. In more constrained instances, it demonstrates the supremacy of

intelligent heuristics over exact optimization methods such as dynamic programming, where

the problem was created using simplifying assumptions critically correctable do not apply,

(cases where demand continues to saturate hotel room availability.

Reference Method Pros Cons

(Parmar, Meshram, Parmar, & AI-enabled Chatbots for
Desai, 2019). improving Customer
Service quality:
(Buhalis, & Moldavska,
2021). Using Natural Language
Processing, an AI-powered
intelligent chatbot can
search keywords and
answer with keywords
from the learning database
(NLP)
(Ivanov, Webster, and Voice-Enabled Virtual
Berezina, 2017). Assistants for awesome
(Budzinski, Noskova, Zhang, User Experience:
2019). TTS translates a text into
Cain, Thomas, Alonso (2019) synthesized expression to
provide relevant results
using a wide variety of
vocabulary choices.
An 'intelligent personal
assistant' that
communicates with visitors
and recommends facilities, To make feedback and
complaint management
deals, travel suggestions,
advice, and alternate plans. efficient.
(Solomon, 2016). AI’s analytics tool for
and improving guest
(Prentice, Dominique
experience:
Any incident that Inaccurate results
occurs around the in case of
visitors, including inappropriate and
environmental causes, poor search word
will be registered, input.
processed, monitored,
and learned by the
system.
AI-enabled chatbot will
eliminate the use of call
centers and will often
provide hyper tailored
self-service.
Without signing into Unclear voice will
specific devices, voice result in poor
enabled virtual information
assistants can have processing and
access to information search results.
about visitors,
schedules, service
status, loyalty,
seat/room capacity, and
checks, among other
things.
AI can help create and Irrelevant
refine hyper preferences caused
personalized campaigns some situation will
Wang, 2020).
(Bellman 2015)
(Brunato, and Battiti, 2019).
(van Ryzin,, Vulcano, 2008):
Allow to match guests’ to maintain customer decrease the
tastes with the hotel’s retention. customer retention
specific facilities or and hotel.
This would assist
bundles. enterprises in collecting
statistical data,
recognizing trends
within vast collections
of data, and analyzing
consumer behaviour in
order to address
common issues.
Intelligence Heuristics in Artificial intelligence is Complex process
Hotel Revenue capable of detecting depending upon
Management: market trends and the demand of the
predicting associated customer limited
Use data-driven and data
values. by number of
modelling approaches to
parameters,
predict the number of It assists in the
constraints,
different variables. automatic
nonlinearities.
categorization of
invoices.

References:
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intelligent chatbot: A review. International Journal of Scientific Research in Computer Science,

Engineering and Information Technology, 5(2), 823-829.

Budzinski O, Noskova V, Zhang X (2019) The brave new world of digital personal

assistants: benefits and challenges from an economic perspective. Ilmenau Economics

Discussion Papers 24(118).

Chowdhury G (2003) Natural language processing. Ann Rev Inf Sci Technol 37:51–89

Paraskevas A, Katsogridakis I, Law R, Buhalis D (2011) Search engine marketing:

transforming search engines to hotel distribution channels. Cornell Hotel Restaurant Adm Q

52(2):200–208

Buhalis, D., & Moldavska, I. (2021). Artificial Intelligence-empowered Voice Bots in

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Publishing.

Ivanov, S. H., Webster, C., & Berezina, K. (2017). Adoption of robots and service

automation by tourism and hospitality companies.

Buhalis, D., & Moldavska, I. (2021). In-room Voice-Based AI Digital Assistants

Transforming On-Site Hotel Services and Guests’ Experiences. In Information and

Communication Technologies in Tourism 2021 (pp. 30-44). Springer, Cham.

Solomon, M. (2016, March 18). Technology invades hospitality industry: Hilton robot,

Domino delivery droid, Ritz-Carlton mystique. 

Prentice, C., Dominique Lopes, S. and Wang, X., (2020). The impact of artificial

intelligence and employee service quality on customer satisfaction and loyalty. Journal of

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Abad, P, De la Fuente-Cabrero, C, González-Serrano, L, et al. (2019) Determinants of

successful revenue management. Tourism Review 74(3): 666–678.

Altin, M (2017) A taxonomy of hotel revenue management implementation strategies.

Journal of Revenue and Pricing Management 16(3): 246–264.

Brunato, M. and Battiti, R., (2019). Combining intelligent heuristics with simulators in

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Cain L, Thomas J, Alonso Jr M (2019) From sci-fi to sci-fact: the state of robotics and

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van Ryzin, G., Vulcano, G., (2008): Computing virtual nesting controls for network

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