The key to AI success in hospitality? Building trust

AI is transforming industries worldwide, with the market for this transformative technology expected to skyrocket from USD $200 billion (~AUD $310 billion) today to over $1.8 trillion (~AUD $ 2.8 trillion) by 2030. Yet, while businesses' investment in and focus on AI is skyrocketing, public trust lags. In Australia, 86% of consumers have low trust in how businesses use AI – nine percent higher than 12 months ago – making us one of the most sceptical nations globally. 

As AI becomes increasingly integrated into operations, it's already playing a critical role in reshaping industries like hospitality. In fact, 85% of hospitality operators in major cities like Sydney, Brisbane, Melbourne, and Perth leverage AI in various ways. From personalised guest experiences to predictive analytics for staffing and inventory management, AI is transforming how the industry operates.

In sectors like hospitality, where personalised service and guest experiences are non-negotiable, this trust gap creates both a challenge and an opportunity. For AI to reach its full potential, hospitality brands, as they continue to embrace AI, must address the trust factor head-on, building transparency, ensuring data sovereignty, and reinforcing human interactions at every turn.

So, how can hospitality brands leverage AI to enhance guest experiences without losing customer trust?

Transparency and trust
In hospitality, guests trust operators with their sensitive personal information – from payment details to allergies – and this trust must extend to how AI manages that data. For AI to be effective and ethical, it must operate transparently. Operators must be clear about how they collect, use, and safeguard customer data, particularly concerning AI-driven processes.

Just as privacy is non-negotiable at the dinner table, it must be treated with equal seriousness when AI systems are at play. Guests need to also know why their data is being collected and how it will be used to improve their experience. Whether it's personalising a menu or streamlining reservations, guests must feel confident that their privacy is protected every step of the way. Being transparent about these practices fosters a sense of security and establishes trust, encouraging customers to engage with AI-powered systems without fear of exploitation.

By taking a proactive approach to data transparency, hospitality businesses can build long-lasting relationships with their customers, who will know that their privacy concerns are respected. This clarity allows guests to interact with AI systems confidently, knowing their data is being handled ethically, securely, and responsibly by a venue they're more likely to trust.  Notably, 36% of these businesses are utilising AI for data analytics, highlighting the growing importance of transparent, responsible data management. 

Data sovereignty
The concept of data sovereignty, whereby guests are granted full control over their personal information, is another key pillar in establishing trust. In the hospitality industry, where personal preferences and sensitive data are frequently shared, businesses must ensure that guests can decide how their data is retained, accessed, and deleted. Guests must have the option to actively opt-in to share their data rather than being auto-enrolled by a venue, and they must also be able to remove their data. When they have control and authority, this builds trust.

When venues prioritise data sovereignty, they empower their customers to take charge of their data. The personal information doesn't belong to a venue or the AI; it belongs to the customer, who entrusts the venue to use it for good. This not only builds trust but also demonstrates respect for customers' autonomy. 

Guardian of guest experiences
AI should never be viewed as a replacement for human hospitality and service. In hospitality, human interactions are what make the guest experience memorable – they're why we visit restaurants and enjoy special moments with our loved ones. AI, when used correctly and underpinned by trust, can enhance these human elements without replacing them. The key is ensuring that AI supports the guest experience by streamlining operations behind the scenes so operators can maintaining the authentic, human touch that guests expect.

Hospitality is a time-consuming profession. AI, however, gives operators and their staff more time back, time they can dedicate to their craft, their personal lives and their customers. In this way, AI isn't replacing the personal connections and meaningful guest experiences that our industry is renowned for, it's becoming the guardian of them. When the priority is creating ethical frameworks, removing bias, ensuring accountability, and safeguarding privacy behind the scenes, we can create the foundation on which AI drives value not just for business, but, more importantly, customers. 

AI can't take your coat, pull back your chair, or discuss the local produce in detail, but it can optimise operational efficiency. In fact, according to SevenRooms, 85% of operators are already leveraging AI to automate time-consuming tasks like inventory management and data analytics so that they then have time to take your coat, pull back your chair, or discuss the daily specials. 

The future of AI in hospitality
The hospitality industry stands at the threshold of a game-changing technological revolution. AI has the power to reshape the sector, enabling restaurants to break free from the "rat race" of slim margins and high turnover. With the right approach, businesses can leverage AI to create unforgettable guest experiences, streamline operations, and achieve lasting profitability, paving the way for a more vibrant and resilient industry.

With 36% of Australian venues already using AI to analyse their data and turn it into actionable, growth-generating strategies, the potential applications are plentiful. For example, AI-powered voice assistants can enable operators to automate the repetitive yet critical booking process, generating significant time savings that can be invested into more in-person interactions. With AI, venues can also accurately manage stock levels and purchasing based on everything from their reservation data to popular seasonal produce.

Yet, the key to unlocking this potential lies in trust. By prioritising transparency, championing data sovereignty, and preserving the uniquely human touch that defines hospitality, businesses can establish a solid foundation for AI adoption – one that delights guests, empowers staff, and boosts the bottom line. Only by making trust the core of AI adoption can businesses unlock the true value of these technologies, ensuring that AI serves as a trusted partner in delivering exceptional, personalised, and human-centric experiences.