Matt Ho, the owner and operator of Bodega SF, uses artificial intelligence (AI) – a system called Maitre-D AI – for his San Francisco-based restaurant’s phone service. The system helps guests when they call, so Ho and his team can focus on the guests in front of them.
“Staying up to date with industry trends is crucial, and AI has made significant advancements that streamline day-to-day operations,” explained Ho, whose restaurant offers high-quality Vietnamese cuisine with a modern and casual atmosphere. “For example, AI has helped us reduce the volume of phone calls at our restaurant, enhancing the overall guest experience.”
Ho said he encourages the bar, restaurant, and hospitality industry to explore AI, especially if it makes financial sense, because it can deliver convenience and automate certain tasks. “Not all AI solutions fit every business, but we’ve had success using an AI host, which has helped improve efficiency without compromising service,” he said.
On the flip side, Ho doesn’t want to see AI replace jobs or diminish the identity of a restaurant or hospitality business, which is ultimately built by the team behind it. “While technology can support operations, it’s important not to lose the human touch that defines a restaurant’s unique character,” he said.
Ho believes that losing the “human touch” might not appeal to everyone when it comes to AI, but if guests are aware that they're interacting with a virtual assistant or that parts of their meal are prepared by an AI, he doesn’t see an issue, as long as it enhances the customer’s overall experience.
“It’s important for guests to understand that these technologies are in place to elevate convenience and improve their dining experience,” shared Ho.
AI on the Rise, from Marketing and Customer Service to Operations and More
AI is certainly on the rise in all industries, including the bar, restaurant, and hospitality sector, and many AI-driven solutions are rapidly becoming available.
According to “The State of AI in Restaurants” report from Raydiant, it’s clear that the restaurant industry is paying close attention to AI and its possibilities.
For the new report, Raydiant – which supports restaurants and other businesses with digital signage, employee experience solutions, and location insights powered by AI – surveyed 175 restaurant technology leaders and discovered the following:
- 62 percent of restaurant leaders believe that AI offers a significant competitive advantage to restaurants that adopt it, with 67 percent feeling well-positioned to leverage AI for market differentiation.
- The top benefits of AI in restaurants, per the report, include effective staff scheduling (38 percent), increased sales and revenue (37 percent), personalized marketing and promotions (36 percent), and efficient inventory management (34 percent).
- Restaurants are experimenting with various AI use cases, such as chatbots for customer service (41 percent), customer preference analysis for tailored experiences (39 percent), inventory management (38 percent), predictive analytics for demand forecasting (33 percent – a tie), and food waste reduction (33 percent – a tie).
Yet, despite the strong interest in AI, restaurants face challenges in AI adoption, the reports notes, including staff training and adoption, finding the right AI solution, cost, and customer acceptance.
The report also explains that to successfully implement AI, restaurants need a better understanding of its capabilities, access to superior AI technologies, stronger leadership buy-in, and increased budget allocation.
How Important Is It That Operators Pay Attention to AI?
Courtney Blake, owner and CEO of California- and North Carolina-based Pilot Light Consulting, which helps hospitality owners with strategy and launching a new operation, said the hospitality industry is historically a late adopter when it comes to tech advancements. “I think that it’s important now, more than ever, to pay attention to technology like AI, which can help operators streamline backend operations and inform strategic decisions or opportunities,” she said.
Jacob Trevino, the founder and CEO of Cincinnati, Ohio-based Gorilla Cinema Presents, said much like the Internet, AI technology is on the verge of revolutionizing how people interact and conduct business – if it hasn’t already. “AI is a powerful tool that will impact industries far and wide,” he noted.
Trevino, who is also the owner of The Overlook Lodge in Cincinnati, among other top-rated bars, has specialized in bar consulting and developing cocktail programs for the past 17 years. “In the hospitality industry, where much of the work is public-facing and focused on consistency in service and experience, AI is likely to have an even greater impact than many operators and employees realize,” he said. “By staying informed about AI advancements, operators can stay ahead of the tidal wave of change that is set to transform the industry.”
Izzy Kharasch, a Chicago-based bar and restaurant industry expert and president of Hospitality Works, said AI will have substantial impact on labor costs, initially, and especially in the fast-food industry. “The voice-based technology will replace many employees who are handling the drive throughs,” he said. “AI already has a place in customer service by improving online ordering by streamlining how customers order, thereby improving customer satisfaction. AI also includes robots, which are becoming more popular in delivering food to the tables in full-service restaurants. This is another way that lowering labor will be addressed.”
Fredrik Carlegren, the vice president and head of marketing and communications at Toshiba Global Commerce Solutions, said the bar, restaurant, and hospitality industry should prioritize advancements in AI because these technologies can transform both operational efficiency and the guest experience.
A new report by Toshiba Global Commerce Solutions and Incisiv – “2024 State of the Industry Future of In-Restaurant Dining” – looks at the future of restaurants and how they’ll need to evolve in the future to succeed. Toshiba helps restaurants thrive by integrating smarter, more agile solutions that enhance operational efficiency and improve customer experiences.
“AI can streamline tasks like staff scheduling, inventory management, and customer interactions, enabling staff to focus on delivering exceptional service while ensuring smooth operations,” explained Carlegren. “It also enhances personalization, allowing restaurants and bars to tailor experiences based on guest preferences, order history, and dietary needs.”
In an industry where customer satisfaction is critical, AI-driven insights and automation provide a competitive edge by improving both operations and the dining experience, according to Carlegren.
Alison Lin – head of restaurants at Yelp, where they use AI to surface helpful information so diners can find the right restaurant for their needs – said deciding whether to adopt AI and new technologies can be a stressful decision for hospitality operators.
“While AI solutions may feel overwhelming to implement, we encourage restaurant operators to consider how helpful AI advancements can be in reducing operating costs and embrace the potential efficiencies it can create,” said Lin. “AI can help to optimize digital ads, draft web or social media content, and even help with social media promotions, freeing up staff to focus on customer service and experiences.”
In What Areas Could AI Support Bar and Restaurant Operators Right Now?
Carlegren, of Toshiba Global Commerce Solutions, said that operators who are using AI are seeing significant improvements, particularly in enhancing customer personalization and streamlining operations. He highlighted some of the key areas where operators are using AI now, including:
- Personalized Customer Experience: “AI can track customer preferences and suggest menu items, pairings, or specials tailored to individual tastes,” said Carlegren. “This not only enhances the guest experience but also increases sales opportunities.”
- Operational Efficiency: “Predictive [AI] analytics can optimize staff scheduling by forecasting peak times and aligning labor resources, accordingly, reducing costs while maintaining service quality,” explained Carlegren. “AI can also streamline supply chain management and monitor inventory, helping operators manage stock levels and reduce food waste.”
- Improved Order and Delivery Management: AI can synchronize orders with kitchen operations and streamline delivery logistics, minimizing wait times and enhancing coordination, per Carlegren, and real-time tracking also lets customers stay updated, creating a more transparent and satisfying experience.
- Enhanced Marketing: AI-driven analytics can help create targeted marketing campaigns by segmenting customers based on their preferences and behaviors. “This can help bars and restaurants attract new patrons and boost repeat visits,” said Carlegren.
Customer Feedback Analysis: Carlegren also said that using AI to analyze feedback, whether from online reviews, social media, or surveys, can provide actionable insights to improve customer satisfaction and adapt to evolving trends.
AI Is a Time-Saving Tool For Bar, Restaurant, and Hospitality Operators
Trevino, of Gorilla Cinema Presents and The Overlook Lodge, stressed that it's important to recognize that AI is, above all, a time-saving tool.
“There are free AI models available right now that operators and general managers can use to streamline their operations,” said Trevino. “For example, voice chatbots can answer common customer phone inquiries, and virtual hosts can assist with scheduling and optimizing reservations. Scheduling has always been a challenge, especially for larger staffs. Managers often spend hours each week handling time-off requests, shift trades, and call-offs. However, AI scheduling tools are emerging that will allow both operators and employees to maximize their time and earnings.”
Trevino said that, ultimately, the key is to harness the power of historical data and use AI to optimize time and resources. “I don't foresee a dystopian future, where hospitality workers are replaced by robots,” he revealed.
Instead, Trevino said he envisions an operator using AI more like this:
- Mike, the general manager of a local bistro, wakes up for another day of service. He checks his phone and sees that Sally has called in sick. The AI restaurant assistant has already sent text messages to available employees to see if anyone can cover her shift. The AI also offers suggestions for adjusting staff schedules in case the shift cannot be covered, using historical sales data to recommend staggered start and end times.
- As Mike makes his coffee, he gets another notification from the AI assistant: a delivery has arrived. The driver has scanned the items in, and the AI has processed the locations and quality of the products, updating the inventory. Mike plans to double-check everything when he gets in, but the AI system from the delivery company has become very reliable at screening out damaged or spoiled items before they even leave the warehouse.
- On his drive to work, Mike receives a weather update: Storms are expected in the afternoon. Based on this, the AI assistant sends out notifications to employees, letting them know that Sally’s shift no longer needs coverage due to the expected drop in customers.
- At work, Mike hands out AI-assisted earpieces to the opening staff. These earpieces provide real-time notifications about tasks such as fruit prep and opening checklist duties, all based on historical data. The earpieces are also linked to the restaurant's camera system, alerting servers when guests are seated, when refills are needed, or when signs of dissatisfaction appear. However, the system isn’t perfect – it sometimes confuses guest dissatisfaction with other situations, like a personal argument at the table.
- Hourly, the AI assistant updates sales data and makes staffing recommendations, taking into account various metrics to ensure fairness in hours and tips. While service errors have become rare, tipping still exists, as people continue to judge servers’ performance.
Overall, Trevino pointed out, the human connection and performance element of dining out remains central to the hospitality experience, despite the increased efficiency through AI. “The exciting part is that many of the predictions I've made [see above list] are starting to come true,” he noted. “While most of these innovations are still a couple of years away, AI assistants for handling reservations and frequently asked questions could become common in our establishments as early as next year.”
Are There Any Downsides to Using AI?
While AI certainly has its appeal, are there any downsides that the bar, restaurant, and hospitality industry should be aware of?
Blake, of Pilot Light Consulting, said AI is a pretty generalized term, but if the industry is looking at AI to advance operations, she’s generally open to whatever options are becoming available. If, however, operators choose to utilize AI in ways that inhibit hospitality, then she believes the industry could be getting in its own way.
“In most independent bars and restaurants, it’s the human interaction that makes the experience special, so I would caution against bringing in tech that compromises that important personal experience,” advised Blake.
Kharasch, of Hospitality Works, said AI development is moving so quickly that it’s hard to keep up with everything, and a downside is that there are many ethical issues. “Replacing humans with robots, implementing programs that utilize customer personal data, while effective for marketing, may step over the line in terms of privacy,” he said. “Losing that personal touch – which restaurants/bars count on for return business – can easily disappear.”
Carlegren, of Toshiba Global Commerce Solutions, explained that while AI offers many benefits, it must be adopted thoughtfully and strategically to avoid potential downsides.
“Initial implementation can be costly, especially for smaller operators needing help investing in advanced systems,” said Carlegren. “There’s also the potential for over-reliance on AI, which could decrease the human touch that many customers value. Additionally, AI systems must be carefully managed to ensure that they handle data responsibly and securely, particularly regarding customer privacy. Lastly, AI’s predictive capabilities are only as strong as the data collected. If the data lacks quality or consistency, it can result in flawed insights and decisions.”
Be Aware of Some These Key Downsides When Using AI, According to One Expert
Greg Provance, owner of GP Hospitality Partners and several restaurants in the San Diego area, distilled the downsides of using AI into three areas – initial costs, over-automation, and job displacement concerns.
Initial Costs: “Implementing AI systems can be pricey, especially for small businesses,” said Provance. “While AI saves money in the long run, the upfront investment can be a hurdle, depending on how deep down the rabbit hole you want to go. It is best to start with just one or two processes to implement AI tools and track the benefits before expanding into other needs.”
Over-Automation: Provance said everyone loves tech, but hospitality is about people. “Over-relying on AI could make the experience feel less personal if not balanced with genuine human interaction,” he noted. “After all, AI can’t replace the warmth of a friendly bartender or the smile from your favorite server.”
Job Displacement Concerns: “There’s the worry that AI could replace jobs,” said Provance, “but the good news is that it’s more likely to complement human roles by taking over repetitive tasks, allowing staff to focus on higher-value, guest-facing duties, like providing genuine, heartfelt hospitality.”
Carefully Evaluate Your Business Needs, Make Deliberate Choices
In the end, AI presents an enormous opportunity for restaurants, according to Carlegren of Toshiba Global Commerce Solutions, but there’s room for further adoption. “AI has the potential to transform the industry by automating routine tasks, enhancing customer personalization, and delivering insights that were previously unattainable,” he said. “However, operators must carefully evaluate their business’s specific needs and make deliberate choices about which AI tools to implement. As AI technology advances, it’s likely to become even more accessible and affordable, making it an increasingly valuable resource for enhancing efficiency, boosting customer satisfaction, and driving growth in these industries.
Trevino, of Gorilla Cinema Presents and The Overlook Lodge, said the industry will see a flood of companies with AI solutions that address the hospitality industry’s pain points, but owners and operators will need to sift through these options to determine the ones that are truly valuable.
And Kharasch, of Hospitality Works, concluded that operators should not rush into implementing a lot of AI solutions at once. “Be thoughtful and determine if being more efficient will cause you to lose customers,” he said. “Consider how AI will affect the employees as well.”
Mark Moeller, founder and president of The Recipe of Success, a national restaurant consulting firm, suggested that bar and restaurant operators find a partner who can best guide them through AI’s use, as he believes operators will have a strong interest in AI by Q1 2025.
“AI is an evolving technology that takes time to learn, and by having someone in your corner that understands the dynamics, they can help you get meaningful results,” said Moeller. “My clients are just beginning to embrace AI, and many are intrigued and very interested in seeing how it can benefit in real time in their business.”
Aaron Kiel is an editor, writer, and public relations professional in Raleigh, N.C., who’s worked in the beverage, tea, and coffee industries for two decades, as well as hospitality and technology. He’s a journalist at heart, but he also wears a PR and communications hat through his consultancy, ak PR Group. Aaron is a contributing writer/reporter for Questex’s Bar & Restaurant News and he’s a past editor of Questex’s World Tea News. In 2023, he was a finalist and honorable mention in the “Folio: Eddie & Ozzie Awards” for Range of Work by a Single Author – B2B,” and in 2024, he won a Gold Northeast Region Award in the American Society of Business Publication Editors’ (ASBPE) Azbee Awards. Aaron also received a 2024/2025 ASBPE Diversity Fellowship Award, which supports and recognizes diversity in the field of B2B journalism. Connect with him on Instagram: @adventurer_explorer or visit akprgroup.com.
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