HOSPACE 2024: NIC, optimistic outlooks and the secret to successfully implementing AI

By Fourth|Nov 18, 2024|10:40 am GMT

HOSPACE 2024 took over the Royal Lancaster London last Thursday. The annual conference for senior hospitality professionals boasted exhibitors from across the industry and a host of high-quality speakers.

The Autumn Budget featured prominently in discussions, and several speakers highlighted that the industry outlook isn’t quite as bleak as the media would have you believe. The Fourth team was in attendance, and our very own Adam Dattis hosted a workshop on how to integrate AI into hotel operations successfully. Here, we share some of the top insights from the day.

Optimism, NIC and growth

Mark Edwards, Leisure and Hospitality partner at BDO, warned that a prolonged period of challenges and the resulting burnout meant a change in strategy and leadership was about to hit the industry. However, he highlighted that the picture for hotel operators is far rosier than most believe. The hotel sector grew in 2024, and the UK travel market is back to pre-pandemic demand levels.

Hotstats COO Michael Grove was similarly optimistic. He pointed out that hotels can offset higher costs thanks to very profitable bedrooms, something restaurants and pubs are struggling with. He sees a trend towards high street F&B outlet hotels becoming destinations for food and drink as pure-play restaurants struggle to remain competitive.

Economist Thomas Pugh of RSM noted that household income grew in H1, but cautioned that people are spending their money on necessities rather than recreational and leisure pursuits. He expects additional government spending to boost growth and has a positive outlook for 2025, stating that food and beverage inflation will likely remain flat.

The lower threshold and increased National Insurance Contributions (NIC) for employers introduced in the Autumn Budget were prominent themes of the event. Thomas believes the cost will eventually be passed on to workers, making wage growth look stagnant in 2026 data.

Kate Nichols, the CEO of the trade body UKHospitality, also discussed the budget in an interview with The Caterer. She cited lowering the threshold as the most controversial change to NIC and suggested it will ultimately lead to employers cutting hours, passing on increased costs to customers and reducing opening hours.

The buzzword of the day: AI

AI was a big topic of conversation. As Fourth’s Adam Dattis joked at the start of his workshop, ‘The New Symbiotic Partnership: How AI empowers human decision-making,’ half of the day’s events featured artificial intelligence (AI) in the title—including his.

Adam is the Director of Customer Success for Global Hotels. His session focused on sharing his experience strategising with customers in the sector.

He opened by observing that, “Everyone wants AI, but few know what it is or how to use it.” While AI offers immense potential, Adam underscored that the hospitality industry will always require human involvement to deliver the emotional intelligence and adaptability that machines lack.

He explained that the key to leveraging AI lies in freeing up people to focus on what they do best — building genuine connections with guests. While AI excels at analysing and organising vast datasets, it is humans that are best placed to apply this insight to nuanced, context-specific decisions.

“We must rely on the machine to prepare and suggest information that enables us to make the final choice,” Adam explained. “Forecasting was once the alchemy of Finance Directors. Now, real-time data is the science.”

In his experience, the highest-performing operators follow three guiding principles when successfully implementing AI:

1. Embrace and embed the technology.
2. Enforce compliance.
3. Empower all team members.

Embracing and embedding technology

Technology isn’t new to the hospitality industry, but untapped opportunities still exist to transform operations. Ahead of any new technology project, Adam suggests operators ask themselves a few critical questions:

• Does it outperform a human? How quickly and accurately a task can be completed? If a machine can complete it better, why burden your team with it?
• Does it eliminate inefficiencies? Can you streamline operations by replacing duplicated tasks and aggregating results?
• Does it empower your team and guests? Technology should make interactions smoother — whether that’s a guest adjusting their room temperature via an app or a team member accessing their payslip or swapping shifts, every implementation should make life easier for end users.

In Adam’s eyes, AI integration is successful if it frees up your team to be more present with your guests (which technology can’t do) and gives managers more time to spend with their staff and guests.

Enforce compliance

Adam used words like “ruthlessly” to describe the need to enforce compliance. He pointed out that operators who invest significantly in a new platform won’t reap the benefits if their teams don’t embrace new processes and engage with the tech.

As Adam highlighted, “If you’ve paid a technology company a small fortune, the least you can do is ensure the system is used properly. Otherwise, you’re leaving ROI — and critical insights — on the table.”

Technology can’t deliver results if used incorrectly, which means compliance becomes the backbone of AI success –– and that starts with leadership. A culture of data accountability, where everyone understands why they need to enter data accurately and timely and how that impacts decision-making, means organisations have access to correct information when needed. “That’s where the true transformation starts,” Adam said.

Empower all team members

The final phase of high-performing operations is leveraging AI to free up humans for what they do best –– connecting with people and making creative decisions. AI doesn’t replace human instinct; it enhances it by presenting actionable insights in real-time.

Adam shared an example where a sudden train cancellation sends room reservations skyrocketing. This could prompt an effective AI platform to forecast how occupancy rates will change in response and suggest adding two additional agency staff and increasing the breakfast order from the supplier, all before a single check-in. Staff can assess this prompt, change or amend the levels based on their experience, and action it with one click. In short, the business is prepared to meet extra demand without burning out staff or jeopardising the guest experience.

AI can also uncover trends you might not notice otherwise. “We are in a season of stupendous creativity with Festive Decorations attracting commentary, social media buzz, and, more importantly, physical traffic to your sites,” Adam said, highlighting that AI can flag if your seasonal decorations have gone viral on social media and your bar tills are reporting a three-fold increase in liquid nitrogen floating cocktails. That allows your team to get creative and maximise the Tik-Tok buzz this season, rather than analysing the data after the fact and trying to replicate it next year.

“AI lets machines do the heavy lifting so humans can focus on what they’re uniquely good at,” Adam highlighted. “It’s not about replacing people — it’s about enabling them to shine.”

Adam ended his session by inviting attendees to challenge their technology partners to help shape and embrace this symbiotic relationship between AI and people. “Re-think your attitude to profit generation, re-awaken the creative potential in your people, and create space for uniquely human endeavours: real-world connections, live and unprogrammed.”