Don’t look now, but budget season is around the corner, and hoteliers will soon have to decide how much time and resources to dedicate to Artificial Intelligence in 2024.
To help understand where AI adoption is heading, I’ve rounded up a few key stats on the impact of AI on work and the labor market.
1) Generative AI is now used by 65% of organizations.
In 2024, generative AI tools like ChatGPT, Gemini, and Claude went mainstream. According to a global survey from McKinsey, almost two-thirds of organizations now use them, nearly double the percentage from ten months prior.
The most common applications are in sales and marketing and product and service development, but use cases are proliferating across organizations. Three-quarters of respondents predicted that generative AI will lead to significant or disruptive change in their industries in the years ahead.
Source: McKinsey, Global Survey on AI, March 2024
2) AI is poised to contribute up to $15.7 trillion to the global economy in 2030.
The potential financial impact of AI is enormous. PwC predicts that global GDP (gross domestic product) will increase by as much as 14% in 2030 as a result of AI – the equivalent of an additional $15.7 trillion.
Growth will be driven by productivity gains and increased consumer demand, as organizations utilize AI to augment labor productivity and automate roles and tasks.
Source: PwC, Global Artificial Intelligence Study, 2019
3) AI will affect almost 40 percent of jobs around the world.
Historically, automation and information technology have affected routine tasks and low-skilled jobs. “One of the things that sets AI apart is its ability to impact high-skilled jobs,” reports the International Monetary Fund (IMF). “As a result, advanced economies face greater risks from AI—but also more opportunities to leverage its benefits.”
In advanced economies, about 60% of jobs may be impacted by AI, with roughly half of jobs benefiting from enhanced productivity and half of jobs being reduced or replaced. In contrast, AI exposure is expected to affect 40% of jobs in emerging markets and 26% of jobs in low-income countries.
Source: IMF, Gen-AI: Artificial Intelligence and the Future of Work, January 2024
4) 79% of business leaders believe AI adoption is critical to remain competitive.
Many employees have gone all-in on AI, reporting that it saves time, boosts creativity, and allows them to focus on their most important work. Yet company leadership is lagging, according to a global survey from Microsoft and LinkedIn.
Sixty percent of business leaders said their company lacks a vision and plan to implement AI, and only 25% of companies plan to offer AI training this year. Yet 66% of leaders also said they wouldn’t hire someone without AI skills.
Not content to wait for their employers to catch up, employees are learning and upskilling in AI on their own. Of the AI users surveyed, 78% said they bring their own AI tools to work.
Source: Microsoft and LinkedIn, 2024 Work Trends Index Annual Report, May 2024
5) 56% of executives believe their roles will be completely or partially replaced by AI.
Much of the discussion about the impact of AI revolves around entry-level employees and mid-level managers. Yet it appears that senior-level positions are also at risk of being displaced or at least heavily augmented by AI.
That’s according to a survey of 800 C-suite executives (including 500 CEOs) from edX, the online learning platform created by administrators at Harvard and M.I.T.
A few more of the survey’s findings:
- 77% of executives say AI is disrupting their business strategy
- 87% are struggling to find talent with AI skills
- 81% feel they have no choice but to learn how to use AI
- 82% believe workers skilled at using AI should be paid more
Source: edX, Navigating the Workplace in the Age of AI, September 2023.
6) 70.1% of short-term rental operators use AI.
Statistics on AI usage in the lodging industry are scarce, but I did unearth a survey of 500 short-term rental (STR) property owners and managers from Hostaway.
The survey indicates that AI isn’t just for big hotel companies with big budgets. Just over seventy percent of STR managers report using AI tools, and 61.8% believe AI represents a competitive advantage in the marketplace.
Currently, STRs are primary using AI tools for:
- Price optimization
- Customer service
- Operational efficiency
- Marketing
- Energy management
Of respondents, 35.0% said they’re on track to save an equivalent of four workdays this year, or at least two hours per week. For managers of 26 properties or more, the number jumps to 46.6%.
Perhaps it’s no surprise, then, that more than three-quarters of the property managers surveyed are optimistic about AI, whereas only 7.2% expressed a pessimistic view.
Source: Hostaway, 2024 Report: AI in the Short-term Rental Industry, May 2024
7) These Are the 8 Most Popular AI Tools in 2024.
So, exactly what generative AI tools are people using? According to Quartz, these are the visitor volumes for the top tools for just a three-month period this year, from March to May.
- ChatGPT — 2.5 billion
- Gemini — 1.27 billion
- DeepL — 810.5 million
- Character — 723.6 million
- Perplexity – 217.4 million
- Claude — 186 million
- Poe — 148 million
- Copilot — 104.1 million
Source: Quartz and Similarweb, June 2024
What Does This Mean for the Hospitality Industry?
The data indicates that it’s time for hoteliers to stop dabbling in AI and start getting serious. While the hospitality industry is primarily a people-driven business, the AI use cases are piling up.
AI has the potential to transform roles in virtually every department. But it’s not physical jobs in housekeeping, F&B, and guest services that will be most affected, it’s white-collar jobs in sales & marketing, revenue management, operations, finance, and human resources.
To stay competitive, hoteliers need to figure out how to leverage AI to increase efficiency and productivity across the property or group, enhance the guest experience, and upskill employees for the future.
8 Key Steps to AI Planning for Hospitality Businesses
As a starting point, consider the following steps:
- Assemble an AI committee
- Identify AI use cases across departments (think big, start small)
- Talk to tech vendors about how to leverage AI
- Familiarize yourself with AI-related ethics and regulations
- Develop an AI plan with objectives, a timeline, and performance metrics
- Incorporate AI into company policies and procedures
- Provide training, exploration, and upskilling opportunities to team members
- Be transparent about how AI will impact the workplace
No sweat, right? There will be winners and losers in the AI race. Rather than wait until your 2024 budget kicks in, start implementing these initiatives now to help ensure your company—and your career—come out on the winning side.
Daniel Craig
Founder
Reknown Marketing