Why hospitality should care about artificial intelligence

May 22, 2024
Jane Louise

Our previous story on artificial intelligence’s role in hospitality looked at the benefits and challenges of using AI, including training, ethics and standards.

This article focuses on the importance of governance and strategies, policies and regulations and how these will affect the hospitality industry in Australia.

As AI systems advance, it’s crucial that they remain under human control and aligned with ethical values. If not properly designed and monitored, there is the possibility of significant risks of AI misuse or unintended behaviour.

Risks that need to be mitigated include bias, job replacement, disinformation, safety and security, and existential risk (which includes the fear that AI systems become so intelligent they move away from human control).

Recent high-profile media stories have highlighted AI’s risks, with a Goldman Sachs study estimating AI could replace 300 million jobs in the next decade but boost global GDP by nearly $7 trillion.

This job loss is comparable to the entire pre-pandemic global Travel and Tourism sector.

Workers’ unions are calling for updated employment laws and AI regulations. Historically, automation has created new jobs, but AI is expected to impact skilled white-collar workers more.

In early 2023, the Future of Life Institute, supported by figures like Elon Musk, called for a six-month pause on AI development. This was deemed impractical.

The Center for AI Safety, supported by leaders like Bill Gates, emphasised AI’s existential risks.

Conversely, the UK Chartered Institute for IT advocated viewing AI as a force for good and called for international collaboration and robust regulation. In July 2023, the UN Security Council discussed AI for the first time, highlighting its significance.

The UK announced a global summit on AI Safety for November 2023, and UN Secretary General Antonio Guterres initiated a High-Level Advisory Board for AI.

Additionally, the US National Institute of Standards and Technology (NIST) released a voluntary AI Risk Management Framework to promote responsible AI development and use.

NIST developed seven characteristics for responsible and trustworthy AI, aiming to reduce negative risks.

These characteristics are:

  • Safe
  • Secure and Resilient
  • Explainable and Interpretable
  • Privacy-Enhanced
  • Fair – with Harmful Bias Managed
  • Valid and Reliable
  • Accountable and Transparent

This, along with similar frameworks developed by Microsoft, IBM and Google, should inform the basis of responsible and ethical AI use in hospitality businesses.

As AI becomes increasingly integral to businesses, adopting responsible AI principles is crucial for several reasons:

1. Managing Risk & Reputation: To avoid lawsuits and mistrust from customers, stakeholders, or employees due to incorrect or biased AI actions, which could harm the organisation’s reputation.

2. Maintaining Corporate Values: Ensuring AI systems align with evolving corporate values and strategies, potentially requiring ongoing monitoring and adjustments.

3. Complying with Government Regulations: Adopting responsible AI principles helps organisations stay ahead of rapidly changing AI regulations, avoiding costly non-compliance penalties.

A May 2023 survey highlighted a significant gap between perceived and actual responsible AI practices, indicating businesses struggle with practical implementation.

To address this, universities around the world are offering training for business leaders, including the University of Helsinki’s two free online courses on the basics of AI, and AI ethics.

As the interest in and use of AI has increased world-wide, governments and organisations are developing ethical principles and frameworks, yet there is no global standard at this time.

While the Organisation for Economic Cooperation & Development (OECD) has issued recommendations that are based on principles of responsible stewardship of trustworthy AI, the UN Educational, Scientific and Cultural Organisation (UNESCO) has focused on protecting human rights and dignity with AI, recommending core values and guiding principles.

UNESCO has further given practical strategies to implement these values and principles. More information on UNESCO’s work can be found here.

While work is being done globally to safely develop AI, there is still a ‘responsibility gap’, where it is unclear who is responsible for safe AI, as well as the issue of liability around negative consequences from the use of AI. This is yet to be resolved.

The WTTC believes “the future of AI will depend on the future regulation of AI”. 

Governments worldwide are exploring existing legal frameworks and considering the need for new regulations to address AI’s risks.

Nationally and regionally, governments seek to balance the economic and social benefits of AI with risk management through voluntary guidance and regulation.

Currently Australia has AI specific legislation at a state level. It has been regulated with existing laws using existing regulatory bodies, with no new office for AI oversight.

The Australian government aims to “position Australia as a leader in the global digital economy”, with New South Wales publicly campaigning on AI strategy, implementing a voluntary AI Ethics Framework and establishing a ‘Responsible AI Network’.

For the hospitality industry in Australia, the rapid advancement of AI brings both opportunities and challenges.

While AI promises to enhance efficiency and customer experiences, it also poses significant risks if not properly governed.

Overall, navigating the opportunities and risks of AI requires collaboration between governments, businesses, and academia to ensure ethical and responsible AI use in the hospitality sector and beyond.

Hospitality businesses should position themselves at the forefront of this technology to ensure they remain both viable as a business as well as compliant with changing regulations.

This article was written with assistance provided by OpenAI’s ChatGPT. For further information, including free downloads of the World Travel and Tourism Council’s research, visit https://wttc.org/.


AI, Artificial intelligence, ChatGPT, hospitality

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