The development of artificial intelligence is having a huge impact on many industries, and could shape the evolution of the UK hotel investment yields over the coming years.
Investors planning to enter a particular industry for the first time or commit to a new asset class have a lot to gain from researching that sector and finding out everything they can about current trends and future prospects.
In the UK hotel market, one concept that could prove increasingly significant over the coming years is artificial intelligence, an area of technological innovation that has the potential to transform industry practices and guest experiences.
The significance of AI
AI could have a transformative impact on numerous industries and economies all over the world in the next few years.
According to the International Data Corporation, worldwide spending on cognitive and artificial intelligence is set to reach $77.6 billion (£58.6 billion) by 2022, more than three times the $24 billion estimated for 2018.
IDC research director David Schubmehl said organisations using these technologies are “benefiting in terms of revenue, profit and overall leadership in their respective industries and segments”.
In the UK, AI will be a key part of the future of the hotel industry, according to PwC. The professional services firm released a report highlighting the various ways in which AI could be deployed in hotels, such as offering more personalised, convenient guest experiences.
Benefits for hotels and investors
PwC outlined a scenario in which, using AI-driven technologies such as facial recognition and voice assistants, hotels can make it much easier for people to check in, find their rooms and complete tasks such as reserving a table for dinner or booking a taxi.
This level of personalisation could prove increasingly important in the hotel industry, as businesses look for new ways to strengthen brand loyalty and maximise revenue generation.
PwC noted in its hotel investment report: “AI enables the creation of far more tailored, bespoke and convenient service experiences for guests, helping to increase their satisfaction and propensity to choose one hotel over another.”
For investors, the pace of innovation and adoption of new technologies in the hotel sector could be viewed as an encouraging sign that the industry is moving forward and securing future profitability.
UK hotel investment yields could improve through the adoption of new technology, if the use of AI-based technologies and services contributes to better guest experiences and more return visits.
UK hotel investment yields
Hotel room investors benefit from consistent and reliable returns and the market is currently offering a number of opportunities for investors, including Liverpool’s Epic Hotel and Residence, the first luxury hotel in the city’s fashionable Baltic Triangle.
UK hotel investment yields are traditionally higher than residential buy-to-let property, with Experience Invest’s latest opportunity offering investors 10 per cent NET per annum for an assured 10-year period.