The tech giant’s advances reach beyond one sector
Hospitality is changing beyond recognition. Consumer demand for efficiency has forced hotels, restaurants, and airlines to offer new products and services, moving towards an app empowered, customer centric, automated industry. While technology can deliver change, hospitality suffers from one of the biggest challenges in business: legacy infrastructure. This is especially problematic for large hotels that are both physically and strategically outdated.
As younger companies enter the lobby, hospitality incumbents have recognised that the existing model is under threat. But the threat is also an opportunity for companies willing to take it… Particularly when it comes to AI.
A warm reception
In December 2018, Chinese technology company Alibaba opened its first FlyZoo hotel. In each of FlyZoo’s 290 rooms, guests can control temperature, lighting, and order room service via voice. Instead of using keycards, guests access lifts and their rooms using facial recognition technology. Eating in the hotel is just as simple for digital natives – diners order via an app and are served by robots. Even the hotel’s bartender is a deft robotic arm. Payments, of course, are made using Alibaba’s online wallet Alipay, and guests are charged automatically when they leave.
Alibaba’s hotel has proved popular with guests, which is not surprising. First of all, the technology works. It makes the stay easier, more personal, and delivers a sense of novelty that other hoteliers don’t. However, it’s a novelty that doesn’t come cheap at 1,390 yuan ($205) a night. And it’s not all automated – there are human cleaners and chefs, as well as receptionists to provide face to face customer service for those that want it.
More than a hotel
Alibaba’s FlyZoo hotel isn’t a pivot – it’s a project. The company has made similar moves before in an attempt to test out tech. In 2015, for example, it opened an automated grocery chain called Freshippo (formerly Hema). Once Freshippo customers have ordered groceries via mobile, their preferences are stored and turned into recommendations using big data analytics. Freshippo and FlyZoo apply AI and other technologies to real world environments, seeing how they work and how well they are received. So while FlyZoo is certainly a feat in smart hospitality, it isn’t a serious threat to established hotels. That said, there are now 100 Freshippo stores in China, and Alibaba is planning to build at least two more hotels.
Room for expansion
Smart hospitality is clearly a global trend, but there are implications outside of the sector. FlyZoo has demonstrated great scope for AI integrations into business. FlyZoo and Freshippo also signify Alibaba’s aptitude for expansion and experimentation. The projects are by no means perfect though. Many of the services at FlyZoo, for instance, will only work for people with a Chinese national identity. It’s likely that Western expansion isn’t on the cards soon, but Alibaba should expect to cater to guests from the West.
Alibaba’s high tech hotel is a test bed for artificial intelligence. Not many companies are in a position to build a hotel to advance artificial intelligence, but the message remains the same: when it comes to AI, genuine human interaction is invaluable. Instead of keeping projects locked away in labs, Alibaba has taken advantage of real world environments. And, at the same time, it has tapped into industry trends that other hospitality companies are yet to take advantage of.
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