Who Owns the Promise When AI Gets It Wrong?

TRANSCRIPT: Who Owns the Promise When AI Gets It Wrong?

The Michelle Pascoe Hospitality Podcast

---

Michelle Pascoe: Well, welcome everyone to this week’s episode of The Michelle Pascoe Hospitality Podcast. It’s just me this week, but before I start, I’m going to say to all my regular viewers that my background has been changing over the last couple of episodes, and that’s because I’m moving. Hence no jewellery today, and you’re lucky I’ve got any makeup and some lippy on.

We’ve bought a really lovely place about 20 minutes from where we are now, still down in the Southern Highlands. As much as I’m going to miss my beautiful garden here, the next one has a lovely front garden, but the backyard is built for billy goats. The view, though, is spectacular, and I’ll be sharing it with you when we get into November. It’s definitely going to take me the next week to move things back and forth, so I’m doing this podcast rather quickly, because after this, everything gets packed up and whisked away tomorrow.

So let’s start. That’s enough about me.

This week, I’m looking back at the whole month of October. Can you believe that? I’m sure I just read on Facebook that there are about 10 weeks to go until Christmas. It’s absolutely crazy.

This month has been all about the different facets of customer service that each of my wonderful guests covered. We started off with James McIntyre. He’s a customer experience and loyalty strategist who’s held senior roles with some of Australia’s biggest loyalty brands, including Wesfarmers OnePass, FlyBuys and Medibank. Then Danica Smith joined me all the way from Barcelona. She’s an executive mindset and performance coach who spent nearly eight years on the hospitality tech side before starting her own business, Morningstar GX. And then we had Tracey Boeck, the Executive Manager of Hospitality and Customer Experience at Maroochydore RSL, up on the Sunshine Coast of Queensland, where she leads a team of around 130 people.

So I had the strategy side, the tech side and the club floor all covered for the month, and what they each came back to is something I’ve believed for a very long time. Good customer service was never really about the tools you buy. Now, if you’ve been in any of my courses, you’ll know I never let you say “good customer service”, because it’s so much more than that, isn’t it? It’s about whether the person standing in front of your customer has what they need, right then, to make a good call.

AI hasn’t changed that. If anything, it’s added another layer to it, and I’ll come to that later in this episode, because I think it’s a skill very few venues are training for yet.

I want to start with James, because he gave me the clearest picture of where technology belongs in the guest journey and, just as importantly, where it doesn’t. James kept it really simple to begin with. He said a great customer experience comes down to whether it’s personalised, whether it’s frictionless and whether it’s rewarding, and that’s been true for as long as any of us have been in this industry.

What’s shifted, though, is what our customers expect. He pointed to the Genesys 2026 State of CX report, which surveyed around 10,000 people, and 92% of them said they expect every organisation to match the best experience they’ve ever had. Maybe that wasn’t with your venue but with your competitor, so you’ve got to match it, and of course, then you have to exceed it. Your club or your hotel isn’t just being compared to the venue down the road anymore. It’s about that experience anywhere in the world. You’re being compared to the best stay, the best app and the best service that guest has ever had anywhere. And 76% of them expect AI to make service better, not worse.

So where does AI actually belong? James was really clear about this. Let AI handle the functional things and the standard upsells, anything where the answer is predictable. But keep humans on service recovery, on the moments that matter like birthdays and anniversaries, and on anything ambiguous.

And I’d add to that. We’ve all had something go wrong with an online order. It’s just part of life and part of business. You get sent to a chatbot that doesn’t answer the question, and then you’re asked to rate the experience. I don’t know about you, but that really ticks me off, and I usually end up screaming into the phone, “I just want a human being. I just want to speak to somebody.” You go from mildly annoyed to absolutely furious in about 30 seconds. Or perhaps that’s just me.

Whereas the moments people remember in our venues are so often the ones no system would ever have picked up, like the waitperson who walks past a table and overhears that it’s a wedding anniversary, or that Jane’s just got her driver’s licence and her family is out celebrating.

The part of the conversation I keep coming back to is what James called promise governance. Remember that: promise governance. When your chatbot or your booking system promises a guest something, whether that’s a room upgrade, a dietary requirement or a particular table, and your team can’t deliver it, who owns that broken promise? James said it’s a leadership question first, a training question second and a technology question last. Every system you put in front of a guest is making promises on your behalf, so somebody needs to decide what it’s allowed to promise.

James also made the point that AI isn’t set and forget. Oh my gosh, we’ve been doing that for a long time with websites. You know who I mean: the one you had done years ago and have never been back to update. There are some interesting photos still on some websites of people who have long since left. It’s like that with AI. You cannot set and forget it. It needs ongoing training, the same as your people. You’re the one giving it these updates. It’s like when you’ve got that telephone message and it’s now July and it’s still talking about the Easter promotions. That’s what AI’s like. It needs to be fed constant information, because it only knows what you’re giving it, and remember, your venue changes every week.

That’s why James’s advice to any club CEO or hotel GM starting out was to start with the customer, map that journey, which I love to do, and only then decide what gets automated.

Danica sees what happens when that step gets skipped, and she sees it from both sides, because she spent years working for the tech vendors and now she coaches the leaders trying to make that tech work. As she rightly said, you can’t automate your way out of overwhelm. It’s so true. And guest experience isn’t just a buzzword. It’s revenue.

She told me about a board meeting for a hotel group she advises. Direct bookings were up, conversion was up, revenue was up year on year, and the CEO only wanted to talk about where they ranked when people searched for them in ChatGPT. Meanwhile, that same group was sitting on two out of five for breakfast on the booking sites, and Danica was asking, why aren’t we talking about the breakfast?

She also described a scenario where AI camera tracking was used to monitor check-ins and productivity in a reception team. One team member steps away for five minutes, the other for 15, so on paper, one of them looks far less productive. But what the camera doesn’t see is that on her way back, the second team member stopped to help a guest who was lost and took the time to look after them properly. As Danica said, you can’t put an algorithm on what it means to be human. That connection can’t be given away, and it can’t be replaced.

But she was just as clear that it doesn’t have to play out that way. She told me how IKEA, for instance, moved a big part of its customer service call centre over to AI, and instead of letting those people go, retrained them in interior design and emotional intelligence and put them out on the shop floor, and both customers and staff were happier for it.

Funnily enough, I had my own IKEA moment recently. I was at the self-serve checkout with my grandchildren, one item had no price, and the voucher we’d been given at lunch wouldn’t scan. I was ready to leave the whole trolley there, and I had quite a lot in it. Then a staff member came over, explained there’d been a problem at head office, and calmly went through and fixed every single price by hand. It may have taken a bit longer, but because he did that, I walked out a happy customer. I felt really good, and here I am sharing it with you. And as a side note, it was the IKEA down in Canberra. Cool store.

So who’s teaching our young people that? If check-in is digital and seamless, who’s teaching your Gen Z team members emotional intelligence? Because that’s exactly what Tracey has been doing with her team at Maroochydore RSL.

Funnily enough, she hardly mentioned AI in our conversation, yet everything she talked about came back to giving her people what they need to look after a customer properly. She was so honest about her own journey as a leader, too. She said when she was coming through in the nineties, you just did as you were told, and I know I did that myself back in the eighties. Nobody explained why you were pouring that wine or upselling that Crown Lager. Today’s team wants to know why, and she told me that’s made her really rethink how she leads.

She describes something she calls the Splendour in the Grass syndrome. Don’t you love these phrases my beautiful guests come up with? For anyone who doesn’t know it, Splendour in the Grass is a big music festival here. Tracey explains to her younger staff that Bob, who comes in every Thursday for his hot roast pork, is having his own Splendour in the Grass moment. He’s been looking forward to it, he’s parked his car already knowing what he’s going to order, and anything that gets in his way between the car park and the bistro chips away at that experience. If his favourite beer is poured as he walks up to the bar, you’ve gone past his expectation.

I love that. It’s his own Splendour in the Grass. He knows what he wants, it’s there waiting for him, his drink is ready, everything is set, and he feels like he’s part of something. I just love that, because it gives a young person a way into a customer’s head that a procedure manual never will.

She also gives her team real knowledge to work with. Local suppliers come in for half an hour after the lunch rush and talk about their products. The winery puts out musk sticks and aniseed so the staff can actually smell what they’re tasting. Isn’t that really cool? So when a guest asks what wine they’d recommend, that young staff member has something genuine to say, with real confidence.

Tracey put it beautifully. Everyone does a chicken parmi and everyone does a steak, but how many venues have a 20-year-old who can talk to you about that steak and tell you why they’d recommend it? That’s the difference between meeting an expectation and creating an experience.

You’ll remember when paddock to plate and farm to table started. It was all about the staff being able to talk about those potatoes grown by the chap down the road, or the local farmer who raised the beast used for those amazing steaks. Those are conversations they can’t read off the back of a packet, and they can share them with the customer.

I was a customer myself not long ago, and it ended up showing me exactly what I meant at the start when I said AI has added another layer to what our people need.

I went to a restaurant in the Hunter Valley recently, and I’d booked an outside table online. When we arrived, the outdoor area was full. The booking system had made us a promise that the floor couldn’t keep. The staff member offered us a table inside, or we could wait around 15 minutes for an outdoor table to finish up. We chose to wait, and I’ll be honest, we were disappointed. But a few minutes later, the waitperson came over and offered us a complimentary drink and a snack in the bar while we waited.

They didn’t have to do that, and it wasn’t something I’d asked for. I didn’t stamp my feet, but it was obvious I was disappointed. It was a special occasion, and we’d booked an outside table. Someone could easily have swapped the table, and I know that happens in some places. Yes, it was disappointing, but for this staff member to do that was just so nice. In the end, we waited less than 10 minutes, and what started as a tech mishap became one of the nicest parts of the day.

I don’t know whether that was the waitperson’s call or a manager’s, and in a way it really doesn’t matter. Whoever made it had the permission and the means to make it right, then and there, without a fuss. And that’s why it’s so important to empower your team. You might remember my episode from around September last year, when I was in Phoenix, Arizona, dining at The Cheesecake Factory, which was all about how that manager empowered their team. It was so cool.

That’s the layer AI adds. Your team now needs to know when to trust the system, when to step in and override it, and how to recover well when the system gets something wrong on the customer’s behalf. That’s a real skill, and it’s one very few venues are training for.

Think about what that means in practice. Does your team actually know what your booking platform, your loyalty app and your automated messages are promising guests before they walk in the door? Listen to it, go on to it, make your own booking and see how long it takes. You’ve got to do that. Do they have permission to fix it when the promise falls over, or do they have to go and find a manager while the guest stands there getting crankier? And when the booking says one thing and the guest standing in front of them says another, do they trust the screen or the person?

None of that comes from the software. It comes from leaders who have thought it through and trained for it.

So as you head into November, which is crazy, my challenge to you is simple. Don’t ask what tool you need next. Ask whether the people carrying your customer experience actually have what they need to carry it well. Everything else follows from getting that right.

If you’d like some help with that, by all means give me a call and we can have a chat. My customer service workshops, the Middle Management Movement and the Executive Leaders Movement are all designed to give your people exactly that, from the frontline through to your senior leadership team, and you’ll find all of them at michellepascoe.com.

You’ll also find links to James, Danica and Tracey in the show notes, and I’d really encourage you to go back and listen to their full episodes if you haven’t already.

Thank you for listening today. If this episode resonated with you, please share it with a colleague or anyone in this amazing industry who you think needs to hear this conversation. And if you haven’t already, subscribe to The Michelle Pascoe Hospitality Podcast on YouTube, Apple Podcasts and Spotify so you never miss an episode. If you’d like to write a review on YouTube or Apple, that would be really lovely too.

So until next time, take care, and there’ll be a different background next time. Thank you so much for being part of my world and allowing me to be part of yours. Take care. Bye.

---

END TRANSCRIPT