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WHATT
13,2 The impact of artificial
intelligence and machine learning
on the global economy and its
252 implications for the hospitality
sector in India
Sudhanshu Bhushan
Department of Management, Vedatya Institute, Gurgaon, India

Abstract
Purpose – The purpose of this paper is to explore and evaluate the existing and future impact of artificial
intelligence (AI) and machine learning on the global economy. It includes viewing the inclusion of AI in
different sectors, its impact on industries, the trends of the forerunning companies that are capitalizing on AI
and the idea of crystalizing exponential growth while maintaining a balance between the understanding of
humans and the subsequent possibilities of AI.
Design/methodology/approach – This paper is based on secondary research, reviewing literature
based on different industries and perspectives.
Findings – The global potential of AI is exponential; the development of AI should be effective. Globally, we
see contrasting views, defining the consequences of AI. Hence, the balance between humans and AI, protocols
and a global regulatory system needs to be established to prevent catastrophic results soon.
Practical implications – The benefits of AI are enormous. The rising incorporation of AI must take into
consideration the basic safety fundamentals for a better future.
Social implications – This paper will enable readers to understand the importance of AI in the global
economy, its current involvement in major industries and the subsequent need for balance in technology.
Originality/value – This conceptual review is by its nature and original contribution and, specifically, an
interpretation for India.
Keywords Humans, Economy, Artificial intelligence, Hospitality industry, Machine learning
Paper type Conceptual paper

Worldwide Hospitality and
Tourism Themes
Vol. 13 No. 2, 2021
pp. 252-259
© Emerald Publishing Limited
1755-4217
DOI 10.1108/WHATT-09-2020-0116
1. Introduction
Artificial intelligence (AI) and machine learning (ML) is changing the way economic value is
being created across industries. There is a paradigm shift toward simulated human
intelligence, which enables machines of all kinds to interconnect, embed learning while
working within their existing intelligence pool and deliver solutions with minimal error.
Such human like intelligence is processed through ML, working through algorithms and
statistical models to deliver solutions. Let us define these terms to understand their intrinsic
meaning, before we delve deeper into their varied applications and implication for the
hospitality sector in India.
2. Defining artificial intelligence, machine learning and internet of things
AI refers to the ability of machines to rationalize and take actions just as human beings,
based on data to achieve a specific goal, stated Frankenfield (2020). Such machines exhibit
abilities such as learning, reason, perception and problem solving, similar to human minds. Global
AI is an evolving field. Machines that calculate basic functions or recognize text through economy
optimal characters are considered basic computing tools built into computers and not
embodiments of AI. Neither are AI applications necessarily huge robots as portrayed in
movie screenings.
ML is the scientific study of algorithms and statistical models that computer systems use
to perform tasks, without explicit instructions by humans. They rely on patterns and
inference instead, Wikipedia (2020). It is a current application of AI, based on the premise 253
that machines should be able to learn once given access to data deduced Marr (2016).
Internet of Things (IoT) was defined by Alexander Gillis, Linda Rosencrance, Sharon
Shea and Ivy Wigmore (2020), as a system of interrelated computing devices, mechanical
and digital machines, objects, animals or people that are provided with unique identifiers
(UIDs) and the ability to transfer data over a network, without requiring human-to-human or
human-to-computer interaction.
Usually AI systems fall into two categories, weak and strong AI systems. Weak AI
systems are built to carry out a particular job, seen in video games, or in personal assistants
of Amazon’s Alexa or Apple’s Siri. These personal assistants answer specific queries posed
by the users. Strong AI systems address more complicated tasks and are programmed for
problem solving without the involvement of a human being. These systems are found in
robotic surgeries, self-driving cars, detecting bank frauds, etc. Tesla owes its success to such
advance, strong AI systems.

3. Market analysis and size of the global artificial intelligence market

The applications of AI are wide spread and have been significant game changers to how
products are designed and delivered. According to published reports by Fortune
Business Insights (2020), the global AI market was valued at USD 20.67bn in 2018 and is
projected to reach USD 202.57bn by 2026, showing a CAGR of 33.1%.There are few
distinct market trends visible in the AI space. Firstly, there is an increasing adoption of
cloud based applications and services, as AI require the use of complex mathematical
models and large amounts of data. Major players like Amazon, Google are integrating AI
with cloud computing. For example, Amazon AWS AI, Google Cloud ML. These cloud
computing services are backed by Analytics As A Service (AaaS), allowing users to
develop and run intelligent applications efficiently. The second major trend is adopting
big data enabled AI. Big data allows users to handle gigantic amounts of structured and
unstructured data, enhance and automate complex descriptive and conduct predictive
analytical tasks.
Some key market opportunities for application of AI include improvement of
operational efficiency in the manufacturing sector, improving customer service in the
retail sector and the demand for customized industrial robots. The New World Robotics
report published by the International Federation of Robotics (2019), shows an annual
global sales value of USD 16.5bn in 2018. A total of 422,000 units were shipped globally
in 2018, an increase of 6% compared to the previous year. IFR Press Release (2019)
forecasts shipments in 2019 will be lesser than those in 2018, but expects an average
growth of 12% per year from 2020 to 2022. The automobile sector remains the forerunner
in adoption of industrial robots with a share of 30% of the total supply, followed by the
electronics industry and then the metals and mining sector accounting for 10% of total
demand in 2018.
The AI market offers hardware, software and services as its main components. The
software segment accounts for the highest market share. In AI-based services, the initial
WHATT investment is low compared to the gains accrued. For instance, Netflix by the use of AI,
13,2 improved search results, resulting in low cancelation of subscription services and saved
around USD 1bn in potential losses.
Challenges being faced by the AI industry include unreliability of AI algorithms, lack of
skilled manpower, data privacy and inability to perform automated labeling for underlying
data and low implementation in applications requiring extensive explanatory features,
254 outlined Fortune Business Insights (2020) report. Technologies included in Ai are computer
vision, ML, natural language processing, etc.

4. Application of artificial intelligence in industry interfaces

The application of AI can be found in many different sectors and industries. End users
industries include healthcare, BFSI, manufacturing, retail, automotive and transportation,
government and others. Advertising, media, retail and BFSI form half the market share of
end users of AI. The application of AI is varied. Its use in the healthcare industry can be seen
in robotic surgeries, drug, dosing and R&D to name a few. AI lies at the core of self-driving
cars, where humongous amount of data is being analyzed and interpreted every nano
second to avoid collisions. In banking, the technology is used detect black money
laundering, large deposits, credit card frauds. In stock markets, AI is used to execute
transactions and price securities more efficiently, incorporating the effects of various
parameters globally affecting equities, futures and commodities traded on stock and
commodity exchanges.

5. Application of artificial intelligence technology in health care in the USA

The service industry seems to be the beneficiary of Ai tech, application of AI and ML, in the
healthcare industry can be showcased to illustrate, how such technologies are playing
the role of game changers. We look at a few examples outlined by Daley (2020) that show us
the phenomenal changes occurring in the AI space in the USA.
AI is being used to diagnose diseases with minimal human error. An apt example is
PathAI through a ML technology is assisting pathologists make accurate diagnosis for
cancer and then customizing the medical treatment administered. This Cambridge,
Massachusetts, based company works with drug dealers such as Bristol-Myers Squibb
and the Bill and Melinda Gates Foundation to expand its offerings to other healthcare
industries.
Another example in this category is Enlitic. This company develops medical tools
through deep learning to precision radiology diagnosis. Its deep learning program analyses
medical data such as radiology images, blood tests, EKGs, genomics, patient medical
history, to enable doctors understand better a patient’s real-time needs. This company was
named the 5th smartest AI company in the world by MIT.AI is being used to discover and
commercialize drug production in a cost efficient manner. It costs $2.6bn to put each drug
through clinical trials and only 10% of those drugs are successfully launched on the market.
For instance, Bioxcel Therapeutics, US-based company, uses AI to develop new medicine in
immuno-oncology and neuroscience, along with finding new applications for existing drugs.
The company was named as one of the “Most Innovative Healthcare AI Developments of
2019.” Another example in this category is Berg Health. This is a clinical stage company
that maps diseases by combining interrogative biology along with R&D to develop robust
medicines to fight rare diseases.
Another San Francisco based company called Atomwise uses neural networks for
clinical trials. Their AI technology screens between 10 and 20 million genetic compounds
each day and deliver results 100 times faster than traditional pharmaceutical companies.
Data is being mined and managed through AI technologies. The industry loses over Global
$100bn a year owing to loss of trillion of data points. This also leads to disconnect which economy
slows down the development of new drugs and cures. A company called Tempus is using
AI to sift through the world’s largest collection of clinical and molecular data to
personalize healthcare treatments. The company collects and analyzes data from genetic
sequencing to image recognition, to give better patient insights and is used extensively in
the field of cancer. Another company called KenSci is an Ai tool used for hospital risk
prediction. They combine AI with Big Data to predict clinical, financial and operational 255
risk by taking data from existing sources to foretell everything from who might get sick
to what’s driving up a hospital’s healthcare costs. Their partners include GE, KPMG,
Allscripts and Microsoft.
The experience and impact in one sector is often a starting point, the tools are finding
broad acceptance in the massive hospitality and tourism sector globally and India is no
exception. The years to come will see more of this play out in the Indian landscape, though
the use will we quite different from the healthcare sector discussed above.

6. Application of artificial intelligence in the Indian hospitality industry

AI is being used very strategically in the travel and hospitality industry to capture essential
information. Keeping customers satisfied and ensuring repeat business depends on, how
well the hoteliers understand their customer behavior, preferences in consumption,
important touch points, payment methods, cuisine preferences, etc. Here, AI plays an
important role in capturing and storing this information, to ensure excellent service quality
offered tailored to individual customers. The use of AI in this industry is not widespread yet,
and there is a reluctance to adopt them. However, outlined are few examples of industry led
AI systems.
Connie is the AI based Concierge at Hilton Hotels, a two-foot bipedal robot which guests
could interact with while arriving at the hotel. Anil Kumar Prasanna, CEO, at AxisRooms
stated, “Through the Dynamic Pricing Engine, we have been working on AI and ML to
develop our Revenue Management Systems, there is a dearth of capable revenue managers
in the industry. The system learns from data of budget, demand and supply, competition
pricing, season, events and festivals, etc., predicts the right pricing and also reads the impact
of the predicted pricing like booking value, no. of bookings, no. of room nights, price point,
etc.” stated Nayak (2018). MakeMyTrip has already invested heavily in AI and ML enabled
Chatbots, Voice based booking tools, etc. to enable the vernacular market to book travel in
their regional language. “Conversational e-commerce is going to be the next wave in travel e-
commerce,” said Rajesh Magow, CEO, MakeMyTrip observed Nayak (2018).
“Many hotels worldwide use Ivy, a Direct Messenger, which automates all guest
interaction and handles almost 90% requests in real-time. Rose is a personal assistant
used by The Cosmopolitan in LA, while you have Mario at Marriott. It is evident that AI
and ML is going to have a huge impact on the hospitality industry and, the evolution and
adoption are only going to grow exponentially.” stated Mhaskar, observed by Nayak
(2018).
The coming years will increasing see the adoption of AI and ML in hospitality services,
as these technologies become imperative from the cost benefit point of view. The customer
benefit is already proven here. However, the hoteliers and staff need to transition toward a
gradual adoption of the technologies, to ideally integrate it seamlessly with the existing staff
operations.
As cloud based point of sales (POS) platforms become popular the data available for
analysis and decision-making purposes will expand further, the hospitality industry is
WHATT learning that new technology is available, it is for them to keep pace and benefit like many
13,2 other sectors are. Business analytic tools being offered by Google, Zoho and others are being
slowly adopted by hotel and restaurant businesses in India by layering these tools alongside
the data being churned out by POS for more meaningful and data driven decision-making,
Rista a relatively new POS is finding customer interest, so are many other cloud based
applications.
256
7. 15 forerunning companies across the globe in artificial intelligence
In Section 7, we review the top 15 companies globally who are forerunners in AI
technologies . These companies are investing intensely in ML applications, an AI tool
allowing computers to function without human intervention. These companies hold are
spending on research and development of advanced AI tools, technological up-gradation,
operational efficiency and innovative partnerships and acquisitions. The objective of these
players is to create specialized smart AI systems using ML and neural networks. Botha
(2019) in toward data science profiles these companies and their activities in AI. An account
is described below:
 Apple Inc. has adopted the route of acquisitions, to enhance their AI capabilities.
In June 2019, they acquired the startup Drive.ai for its autonomous car driving
project. In November 2018, they acquired AI software Silk Labs to provide
lightweight Ai for connected hardware products such as speakers and camera to
achieve audio visual intelligence. In April 2018, Apple hired John Giannandrea
poaching him away from Google. During his eight years with Google,
Giannandrea led AI integration into every Google product, observed Markman
(2019).
 Amazon has invested in AI applications for companies, as well as for customers.
Alexa, the AI language assistant, is a well-known innovation used across the world.
Amazon Web Services (AWS), a set of ML programs and pre-trained AI services for
businesses, has not yet garnered sizeable users, with more than 10,000 customers,
including Siemens, Netflix, Tinder, NFL and NASA.
 Banjo uses AI to search social media to identify real-time events and situations,
critical for emergency services and other organizations to operate faster and
smarter. The company has raised more than $120m in funding, from Softbank and
other investors and was founded after the tragic Boston bombings of 2013.
 DJI, the Chinese company a start-up valued at $15bn, having a market share of more
than 70% in the global drone market is increasingly entering the AI space. The
latest drones use AI and image recognition to avoid objects. They have recently
entered into a partnership with Microsoft for a drone-to-computer streaming project.
They are expected to enter into autonomous vehicles and robotics
 Facebook’s AI research group FAIR, is committed to advancing the field of machine
intelligence and developing new technologies to provide better ways of
communication. Mark Zuckerberg and Co. worked on a negotiation platform with
two AIs called Alice and Bob. They halted the project after the couple began
communicating in their secret language, unknown to the founders.
 Google is largest and most important AI company. Google has acquired AI start-ups
to build capabilities. They have created 12 new AI companies. The most important
purchase was the $400m deal for DeepMind, the board game playing Go champion.
Google’s machine system TensorFlowfree for all, and the ongoing Tensor AI chip
 project for ML on the device. Google’s CEO Sundar Pichai has defined the growth Global
path ahead as “evolving from a ‘mobile first’ to an ‘AI-first’ world in the computer economy
industry.”
 HiSilicon Huawei’s chip manufacturer introduced the Kirin 980 in 2018 in Berlin. It
has significantly enhanced the second generation of the world’s first AI smartphone
chip. The Kirin 980 can do tasks like face recognition, object recognition, image
segmentation and intelligent translation at high speed. 257
 IBM has been active in AI since the 1950s and was involved in the birth of AI. With
Watson, IBM has created a ML platform that can integrate AI into business
processes, such as building a chatbot for customer support. Their customers include
KPMG and Bradesco, one of Brazil’s largest banks.
 Intel has acquired both Nervana and Movidius as well as smaller AI start-ups.
Nervana enables companies to develop specific deep learning software, while
Movidius was founded to bring AI applications to devices with deficient
performance. Intel is working with Microsoft to provide AI acceleration for their
Bing search engine.
 Microsoft’s AI portfolio includes products for both consumers and businesses .
Cortana, Microsoft’s AI digital assistant, is in direct competition with Alexa, Siri
and Google Assistant. The company’s Azure Cloud service, provides chatbots and
ML services to some of the biggest names in the business based on AI. Microsoft
also acquired five AI companies in 2018 alone.
 Nvidia is one of the longest established AI companies . Nvidia’s graphics processors are
the be-all and end-all for ML and AI. They are active in healthcare, higher education,
retail and robotics. With deep learning and GPU development, Nvidia i integrating AI
into every level of the vehicle, manufacturing and autonomous driving processes.
 OpenAI, the nonprofit research group is involved in the development of AI for the
benefit of all and operates on the principle of open source mentality. Significant
finance has been raised through investments and some through acquisitions. Some
of the prominent names in AI currently work at OpenAI, including deep learning
expert Ilya Sutskever. Their sponsors include Microsoft, Amazon and Elon Musk.
 Qualcomm the chip manufacturer is committed to AI. AI plays a crucial role in the
Snapdragon 855 mobile platform. The chip uses a signal processor for AI speech,
audio and image functions and power popular smartphones on the market.
 SenseTime is the tool of the Chinese Government, who uses face recognition to track
citizens. Their image recognition technology is way ahead of what Google and
Facebook can do. Autonomous driving is currently SenseTime’s number one
priority.
 Twitter has entered Ai through the acquisition mode. Four AI companies have
already been acquired, with Magic Pony for $150m. The Australian company is
developing ML approaches for visual processing on the Web and mobile devices.
Twitter will uncover systems for recommending specific tweets in users’ timelines
with AI in the near future.

8. Conclusion
There are varied views on the increasing role of AI in the global economy. Legendary
physicist Stephen Hawking shared this ominous warning: “Success in creating effective AI
WHATT could be the biggest event in the history of our civilization. Or the worst. So we cannot know
13,2 if we will be infinitely helped by AI or ignored by it and sidelined, or conceivably destroyed
by it.”
The predictable risks are valid and can be broadly outlined as follows. There are privacy
concerns that can be easily breached to serve the purpose of a few powerful humans. There
could be inbuilt human biases in the intelligence developed, skewed to the benefit of the
258 creators. To mitigate this diversity in AI creation teams needs to be encompassed. Also, the
reality is that humans can never become as specialized as AI powered machines, resulting in
human labor being at jeopardy. People will lose their jobs, which can be performed with
almost zero error by intelligent programs.
For instance, as autonomous cars become commercialized, they will make drivers
redundant. This could lead to massive unemployment, as such vehicles will be able to
deliver the fastest service at minimal error. The same scenario can be seen in customer care
services, resolution of banking queries, all areas of research and development concerned
with analyzing data.
To safeguard the balance between humans and AI, protocols and a global regulatory
system needs to be established now to prevent catastrophic results in the near future.
Industry leaders such as Elon Musk has been placing emphasis on defining controls and
implementing them, before it is too late to reverse.
The benefits of AI are tremendous, and this new wave of advanced technology has
already proven its capabilities to unlock economic value unparalleled by anything we have
seen yet. It would be wise as with anything else, to use its advantages within basic safety
fundamentals.
For the hospitality and tourism space in India, it is early days, but with billions of USD in
investments by Google, Facebook, Amazon through joint ventures with Reliance and other
such investments, it is quite clear that the digital landscape of hospitality is going to find AI
and ML as the next frontier of innovation, technology adoption and strategic advantage.
From Robots in Kitchens to marketing tools being used, the industry is at the threshold of
the next level of tech-driven shift.

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Corresponding author
259
Sudhanshu Bhushan can be contacted at: sudhanshusb@gmail.com

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