Mr. Greger

Human Resources, Recruitment & Training

Are Robots and Artificial Intelligence Real-Life Threats to Humans and Their Jobs?

By Ken Greger, Managing Director, AETHOS Consulting Group

Co-authored by Robert Rippee Director of the Hospitality Innovation Lab and also the Director of the eSports Lab at UNLV

A robot first appeared in a motion picture in 1919, The Master Mystery. The machine was called "the Automaton," as the term robot would not be used until 1920. Since then our imaginations have been led by humanoid machines capable of capturing our hearts (R2D2) to threatening our very destruction (Westworld, The Terminator). A common theme among these robots was an intelligence, sometimes sinister and sometimes benevolent, but always present. The movies implanted a mental image of a robot, but don't be unduly alarmed - C3P0 is not yet on the horizon.

Robots have reshaped manufacturing, technology, aerospace and online retail/warehouse supply chain structure and process. That same quantum leap is on its way to hospitality just as surely as the computer changed the front desk process late in the twentieth century. Robots entering the hospitality industry will be very different from their fictional counterparts and certainly won't possess the artificial intelligence of the sinister HAL Computer, at least not yet.

The rate of technological change is said to double every two years under an observation called Moore's Law.(1) This doubling of change brings significant implications for today's hotel executive not only about the speed at which robotics will become an integral part of your operation, but also the potential conflicts this will present with your human capital during the adoption phase of the new technology.

The authors, Robert Rippee, Director of the Hospitality Innovation Lab at UNLV and Ken Greger, a partner with AETHOS Consulting Group specializing in Hospitality & Leisure, collaborated on this article to elevate the discussion by raising what we consider to be the three key topics for hotel executives:

  1. Robotics & human capital in hospitality: Where will they be a complement and where will they diverge?
  2. The issue and impact of creative destruction on economic capital.
  3. What is the current state of robotics in hospitality?

Robotics and Human Capital in Hospitality - Where will They be a Complement and Where will They Diverge?

We begin our discussion with a question: Where will they (robots and human capital) complement each other and where will they diverge? Perhaps a good place to begin is to focus on the robotics side of the equation.

What will they (robots) do well? Ian Roderick in his research on the representation of robots as living labor said, "…robots blur the boundary between the tool and the living."(2) Martin Ford in his book, Rise of the Robots: Technology and the Threat of a Jobless Future said, "Computers are getting dramatically better at performing specialized, routine and predictable tasks, and it seems very likely that they will soon be poised to outperform many of the people now employed to do these things."(3) As a hospitality tool, robotics will be adept at our specialized, routine tasks; tasks where accuracy is essential; tasks that require large amounts of data processing; and tasks that may be unsafe or dangerous to humans. Secondly robots will blur service process boundaries and enable a redefinition of roles since they, by design, excel in a multi-tasking role. Maria Enrica Virgillito, in her scientific paper on the Rise of Robots, said they could present "…the fourth industrial revolution: robots and artificial intelligence".(4)

Robots could redefine the entire system of processes within hotels, disrupting and changing departmental and organizational structures. One obvious area will be the integration of language recognition and translation by machines into service processes. Although the current state is not perfect, language and linguistics applications are rapidly advancing. If you'd like to test the theory, just ask Siri how many languages she supports. Eugene Wong, CEO of startup RiCH Robotics(5) said in a conversation with the authors, "We believe that globalization of the hotel customer is driving the need for machine based language recognition and communication in robots."

Conversely, what will they (robots) do poorly? Robotics are not adept at processing our human emotions nor is the technology adept at creative, unpredictable and non-routine tasks; the technology cannot be programmed to care about a guest nor possess other human emotions, and most robotics have yet to be deployed in human/robot teams in a service environment. As Ford said, "There are also intricate interdependencies…"(6) These interdependencies that are so essential in a high customer service environment are for the most part, theoretical applications about robots. We simply don't know if and how well they will work on a team with humans nor how well humans will adapt to working with these machines.

So, what are the implications of this discussion to the hotel executive? Robotics will succeed in the service role when hoteliers themselves develop and define the level of control that should be granted to our robot intermediaries. However, "Progress is not always smooth and consistent; instead it often lurches forward and then pauses while new capabilities are assimilated into organizations."(7)

The hotel executive will learn during those pauses. Learn that perhaps the most efficient deployment of a robot will be in accounts payable during the day and then at the front desk in the evening; or cleaning cutlery in stewarding at night while moving a 250-pound housekeeping cart and supervising a guestroom attendant during the day shift.

The Impact of Creative Destruction on Economic Capital

Creative Destruction(8) is a term coined by Joseph Schumpeter at MIT in 1942 to describe the reallocation of resources that happens because of innovation or disruptive change. With robotics, economic benefits will not only be significant but sustained. A machine that would always have high productivity, never call in sick, never have a bad day, require no benefits and work nearly 24/7 would provide enormous economic savings. In addition, a machine that performs multiple tasks only compounds the economic effect. It's not hard to understand that because of this efficiency gain, economic capital is freed.

"Some skills will be rendered obsolete, while new skills may be required to implement the improved technology."(9)

What can be done with that free capital in a service industry? We believe this is a key question. The answer will lead companies to invest in experience over standardized service…attributes more valued by today's millennial than yesterday's baby boomer. In other words, the free capital will allow the savvy hotel operator to develop new and innovative experiences to provide a deeper engagement with their individual guest. Re-investing free capital in the guest experience and in many ways ~ redefining it.

With this assumption of creative destruction will come labor issues. There is no way of side stepping this significant obstacle - some jobs will disappear. Earlier this year one of the authors participated in a law school led panel discussion about robotics and labor. In his remarks, a panelist representing labor stated that the inevitability of technological advance was a given. What labor is requesting, he said, is a seat at the table in the implementation.

Some of the free capital can be reinvested in new roles. The development of new experiences and innovative service models will transfer human capital to more direct guest facing roles that ultimately drive competitive advantage and greater profits. Human capital can be reallocated into new and innovative roles that just might recognize a guest who is having a bad day and make it amazing; or create new benefits to help the business traveler become more productive; or function as the personal butler for that platinum loyalty card holder.

Other jobs will be absorbed into new infrastructure to support the technology. For those of you more "senior" in our executive audience, just remember the headcount of the IT department in 1980 compared to today. Free capital based on technological advancement can also help to redefine the organizational structure over the long term. Consider this simple contrast: Google's market capitalization is more than $550 billion with around 61k employees while General Motors' market capitalization is more than $55 billion with approximately 200k employees.

Our point is that the hotel executive needs to move beyond the robot technology, and begin to think about free capital. Imagining or redefining existing processes, organizational structures and roles.

What is the Current State of Robotics in Hospitality?

They are already here. We're not talking about the fictitious robots in the movies. In fact, if you expand the definition of a robot in hospitality only slightly, one might include a check-in kiosk: a machine that performs functions essential to a guest in a hotel.

Robot and technology startups focused on the hospitality industry are actively designing and deploying robots in operating hotels. Paul Oh, PhD, Lincy Professor for Unmanned Aerial Systems, Director of the Drones and Autonomous Systems Laboratory at UNLV said, "Costs versus benefits are shared concerns for hotel owners and guests. Robots that serve multiple purposes to enhance guest experiences and reduce hotel overhead would overcome concerns. The key obstacle stems from the lack of knowledge and urgency. But in a competitive market, one cannot afford complacency; robots in hotels are already here!"

Leading hotel brands are beginning to test artificial intelligence coupled machines as well. This past December, noted Las Vegas Icon Steve Wynn announced the integration of a customized version of Amazon's Alexa into all of his Las Vegas Hotel Rooms (merely 4,748 rooms). Alexa will give the guest control over lighting, temperature, television and other amenities with simple voice commands.

Aside from Wynn, companies like Savioke, RiCH Robotics (mentioned earlier), Maid Bot, Dishcraft and others are in early stage startup or beta test of actual robots in actual hotels. The disruptors will soon be knocking on your doors with their robots.

At UNLV's Hospitality Innovation Lab, one of the authors is working closely with the Colleges of Engineering and Architecture on a Guest Room of the Future project to explore these technologies and help guide the experiential design impacted by robotic, AI and other related technologies.

In summary, the integration of robotics and AI into the hotel industry will progress rapidly. The early beta tests will provide verification of the economic benefits, cost-effective investment and free human capital to focus on the guest experience. New jobs will be created to manage and support this technology, and, as mentioned, staffing structures will change.

The only thing to fear in this instance is failing to accept the inevitable. Embrace robotics and AI, commit to learning all you can about the current state and what else is just around the corner. Be proactive in thinking through and planning for this technology - and the appropriate human balance - so it doesn't end up as an invasion to your business or an advantage of your competitor.

References:

(1) Retrieved from http://www.intel.com/content/www/us/en/silicon-innovations/moores-law-technology.html
(2) Ian Roderick (2013): Representing Robots as Living Labour in Advertisements: The New Discourse of Worker-Employer Power Relations, Critical Discourse Studies, P. 392
(3)Martin Ford (2015): Rise of the Robots: Technology and the Threat of a Jobless Future, Basic Books, p. 71
(4) Maria Enrica Virgillito (2016): Rise of the robots: technology and the threat of a jobless future, Labor History, DOI: 10.1080/0023656X.2016.1242716, p. 1
(5) http://richrobotics.com
(6) Martin Ford (2015), p. 63
(7) ibid, p. 63
(8) Retrieved from http://economics.mit.edu/files/1785
(9) Stephen J DeCanio (2016): Robots and humans - compliments or substitutes, Journal of Macroeconomics, p. 280

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This article was co-authored by Robert Rippee. Mr. Rippee is the Director of the Hospitality Innovation Lab and also the Director of the eSports Lab at UNLV. The Hospitality Lab develops and designs applied innovations and intellectual property for global hospitality industry. The lab is a project oriented innovation lab focused on developing intellectual property. The scope of exploration in the lab includes robotics, big data, eSports, mobile, experience design and process innovation. The newly formed eSports Lab is the IGI's powerful new initiative to connect the phenomenon of eSports to the Integrated Resort. Through research and applied learning the eSports Lab will create the economic models that can help the gaming industry define the integrated resort experience for the millennial and future generations of customers.

Ken Greger is a Managing Director of AETHOS Consulting Group. He has spoken multiple times at The Lodging Conference, ALIS, The Global Spa & Wellness Summit and to other audiences. An author, Mr. Greger’s articles appeared in The Cornell H. R. A. Quarterly, Hotel & Motel Management, Hotel News Now and other industry media. Mr. Greger began his career with Deloitte & Touche and from there he entered the world of executive search and consulting. Mr. Greger later joined KPMG’s global search practice. He was also a member of the Entertainment Industry Practice Group. He later led executive search in the Western Region for Laventhol & Horwath. Mr. Greger can be contacted at 503-655-4100 or kgreger@aethoscg.com Please visit http://www.aethoscg.com for more information. Extended Bio...

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