Singapore hopes artificial intelligence will help boost its tourism industry – CNBC

A tourist in Singapore taking in the iconic skyline with Marina Bay Sands and the Singapore Flyer in view.

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Singapore is gradually reopening its borders again after months of coronavirus travel restrictions.

As the city-state looks to salvage its battered tourism industry which contributes around 4% to its economy it's hoped that artificial intelligence (AI) can help the sector bring back visitors safely.

Official datashowsmonthlyvisitor arrivals were down by 76% between January to July, compared to a year ago. Visitor arrivals in July alone were down more than 99% year-on-year.

Even though the Southeast Asian nation remains closed off to most foreigners, officials are now considering lifting restrictions for select groups of visitors.

Local start-ups like Vouch and Travelstop are betting on their AI-powered systems as the country navigates new security measures.

Launched in 2017, Vouch sells an AI-enabled digital concierge that's designed to answer guest inquiries, make bookings and take room service orders. The company says its chatbots used by hotels including Andaz Singapore and the Pan Pacificin Singapore can conduct health declarations, facilitate contactless ordering for dine-in services and manage crowd control.

The Vouch app being used on a mobile phone.

Handout from Vouch

"Interestingly, Covid-19 has actually helped our business significantly," Vouch co-founder Joseph Ling told CNBC.

The company had to initially modify its in-room dining ordering system to allow for takeaways and deliveries a feature that it gave to hotels for free during Singapore's partial lockdown.

"Thanks to this, we were able to build great relationships," Ling said. "When hotels began to plan for the future around June and July, we signed up many of them." He said Vouch is now growing rapidly with "15 percent of the total Singapore hotel room stock on board."

Other AI-backed firms also say they're optimistic about the long-term outlook.

Two-year-old Travelstop aims to simplify business travel with the help of its serverless SaaS platform, that's designed to speed up the booking process, automate expense reporting and provide cost-saving insights.

"For the past few months, even though corporate travel revenues have been down, we are seeing significant traction on our expense management platform as companies are now accelerating digitizing the workflows and processes to support the work from home culture," said Travelstop's co-founder Prashant Kirtane.

Ongoing border restrictions and lower consumer appetite for international flights have changed travel as an industry. The two entrepreneurs said they believe machine learning and AI will change travel as an experience.

"The business models of traditional corporate travel management companies have not evolved for decades," Kirtane stated. "Existing tools have not kept pace with the modern business traveler, and are generally not affordable by smaller and mid-sized businesses."

"Hotels used to feel more technologically advanced than our homes but as IoT (Internet of Things), AI and consumer tech companies take the lead, the tech gradient has reversed hotels now feel lower tech than our own homes," said Ling of Vouch. The Internet of Things is the idea of a network of devices thatare all connected to the internet and, conceptually at least, can work together.

Before the pandemic, AI and other forms of machine learning were just beginning to infiltrate the travel sector. Their biggest advantage is the ability to personalize experiences and streamline services based on customer data.

Singaporean start-up Fooyo, for example, creates customized itinerary planners that include real-time crowd monitoring for attractions and events. The app it created for the Chinese city of Chongqing also includes an AI audio guide, which gives visitors information based on their GPS location.

As the economy begins to recover from the pandemic,AI-backed systemscouldbecome especially useful.

For example, "with people being more cautious about being in long queues and waiting in crowded spaces, more AI processes would be beneficial to safe distancing," said James Walton, the transportation, hospitality and services sector leader at Deloitte Singapore. He cited the example of remote check-ins and check-outs in hotels.

Investors are paying attention to this rapidly growing sector. Travelstop raised $3 million in pre-Series A funding led by Silicon Valley venture capital firm Accel last year, on top of the $1.2 million it obtained in a 2019 seed round led by Singapore's SeedPlus.

Kirtane said the company aims to complete a new fundraising round in 2021. Vouch, meanwhile, has raised about $250,000 of angel investment to-date and will be seeking more funds as it looks to expand in Thailand and Malaysia.

And investments in new technology continue. In 2017, the country's tourism body and the Singapore Hotel Association launched a program to crowdsource technologies for hotels. Among the winners was a wireless system that automatically adjusts air-conditioning units for energy efficiency.

Officials announced an accelerator program for tourism-oriented tech start-ups late last year.

Technological innovation "can also strengthen investor perception, and thus encourage investments in the country," Walton said.

Singapore has long faced a severe labor crunch amid state-imposed foreign worker levies and quotas factors that have contributed to wage increases. For employers, "the use of tech and AI in areas such as hotel operations will go some way to alleviate this pressure," Walton said.

Ling of Vouch echoed those sentiments. Hiring is difficult for Singapore hotels since most locals don't want to work in hospitality, he explained. As a result, back-office staff are predominantly foreigners and due to quotas on foreign manpower, hotels often lack sufficient front-end personnel, Ling continued. With many establishments reducing staff count in the aftermath of Covid-19, labor issues are as critical as ever, he said.

Whilst AI can improve overall efficiency with less manpower, it can also lead to job losses an unwanted development at a time when people are already concerned about job security.

"Would this mean reducing foreign manpower numbers, and saving the jobs for Singaporeans? Does adopting [AI] replace the jobs, or would it enable more high-level jobs for Singaporeans?" Walton asked.

It remains to be seen, he said, how the government can balance that situation.

Correction: This story has been updated to accurately reflect the designation ofDeloitte's James Walton.

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Singapore hopes artificial intelligence will help boost its tourism industry - CNBC