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Lerer Hippeau Ventures’ Eric Hippeau gives his take on how investors should respond to the development of AI on ‘The Claman Countdown.’
The rapid adoption of powerful new generative artificial intelligence (GenAI) tools like OpenAI’s ChatGPT is creating a lot of buzz, but some tech-driven businesses are holding off jumping on the bandwagon until they can be more assured any existing bugs and risks are worked out.
One of those companies is hospitality giant Choice Hotels, which has utilized AI and machine learning in its operations for years and has a history of showing it is not afraid of being an early adopter.
Choice Hotels has used AI for years across its brands, but it is not yet ready to utilize generative AI. (Choice Hotels)
Choice, which owns upward of a dozen brands with more than 7,100 locations worldwide, has a lot of firsts under its belt.
The company founded in 1941 was the nation’s first hotel chain, the first to offer 24-hour toll-free reservations over the phone, the first to release a global marketing and reservation system and the first to have a hotel website with real-time rate and availability information.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CHH | CHOICE HOTELS INTERNATIONAL | 113.93 | +0.08 | +0.07% |
It was the first to develop a cloud-based property management system, developed the first hotel app for iOS and was the first hotel company to offer instant booking on TripAdvisor.
Choice was also the first to have a cloud-based reservation system and the first hotel company to go “all in” on Amazon Web Services.
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Choice uses AI for all sorts of applications across its business, from predicting booking patterns, peaks and cancellations; helping owners and developers identify new locations to build; and providing franchisees with AI tools to manage property operations and revenue.
Yet, while the company is watching GenAI tools closely, it is not yet ready to pull the trigger on integrating it into its systems — at least for now.
Choice Hotels CIO Brian Kirkland (Choice Hotels)
Brian Kirkland, Choice Hotels’ chief information officer, says GenAI is “a lightening rod” that has the potential to change consumer decision-making. He acknowledged the media attention the technology has garnered and the fact that everyday people are trying it out and exploring its capabilities before telling FOX Business, “What we’re realizing is the systems are very early on” and “the technology is not ready yet.”
Kirkland pointed to several issues with Gen-AI tools, noting that the systems’ answers can be inaccurate, they often hallucinate and there are risks associated with protecting intellectual property.
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“We’re cautious,” he said, but “we’re invested in paying attention to it because when it does solve some of these problems – when you can take the power of generative AI and tie it to a curated set of data … and you can also merge it with private datasets that you don’t want exposed to the broader community, but you want to leverage within that power – you’re going to have a great opportunity to leapfrog.”
Choice Hotels is exploring GenAI tools for integration into its systems but says the new technology is not ready for primetime. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images / Getty Images)
The CIO expects GenAI ultimately to change how guests plan their travel, provide opportunities in myriad ways for people to interact and even solve problems like fraud analysis.
Kirkland says there are all kinds of things Choice will be able to do with the power of GenAI “when it matures a little bit farther than where it is today.”
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“We’re actively monitoring it, and, in our world, that involves exploring with it,” he said. “But it’s not yet ready for commercial use with consumers.”
