Industry Update
Opinion Article 7 April 2020

The Rise of Chatbots in Hospitality for Revamping the Guest Experience

By Robert Reitknecht, Hospitality Leader and Guest Experience Expert

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The rise of speech- and text-based assistants has hugely impacted the way customers want to communicate and be serviced by brands, especially in hospitality. In a 2018 study conducted by Humley, more than two-thirds of Americans said they would like to use chatbots to improve their online travel experience. As a global market expected to reach $1.25 billion by 2025 with a healthy public outlook (only 11% of customers negatively view the technology ), hotels should seriously consider how chatbots can deliver more distinct guest experiences. Consider this your 2020 guide to chatbots for guest relations.

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What is a Chatbot?

Before we dive in, it may be helpful to formally define what a chatbot is. In short, a chatbot (also referred to as a virtual agent or assistant), is a software program that can simulate both written and spoken human conversation. There are two kinds of chatbots companies can use for customer service: those that are task-oriented (or single-purpose, focused on performing one function based on pre-programed "rules"), and those that are data/AI-driven (conversational and self-learning). In this article, I'll be mostly discussing conversational/AI-driven chatbots.

What Are the Top Benefits for Hotels?

Hospitality organizations can strategically leverage chatbots to:

  • Create better guest experiences that drive satisfaction, loyalty, and spending
  • Better handle mundane and/or time-consuming tasks so that front office staff can spend more time creating personal relationships with guests (also improve employee satisfaction by allowing staff to handle more stimulating and engaging interactions)
  • Handle inquires faster and more efficiently (79% of customers prefer real-time chat because they don't have to wait on hold for a customer support team to respond; they want their query to be addressed immediately)
  • Ensure more accurate service that reduces the costs and risks of human error
  • Better scale business teams in their relations to customers
  • Identify unique cross-selling and upselling opportunities with more personalized engagement

The benefits of chatbots are seemingly endless, especially when paired with AI capabilities that expand and strengthen their functionality. For example, one of the top AI capabilities used to amplify chatbot technology is natural language processing. Studies unanimously show that a key area of improvement for chatbots is the ability for customers to hold a more "human-sounding, natural conversation." Integrating natural language processing with chatbot technology, hotels can create a conversational self-service solution that drives more seamless, enjoyable experiences.

We're all familiar with traditional interactive voice response (IVR) technology in which you dial a company's 800-number and are given a list of options ("press 1 for X," "press 2 for Y"). Conversational self-service flips the script, being able to proactively listen, understand slang, and provide more natural, human-like interactions.

Instead of forcing guests to navigate a limited menu set, hotels could create an intelligent solution that says things like, "Would you like to make a reservation? Please say 'yes' or 'no.'" Or, "You've qualified for our VIP loyalty program. Join now and save 20% on your next booking. Would you like to learn more?" Some companies are even pairing chatbots with sentiment analysis (another AI-based capability) to monitor customers' emotions. In this way, the chatbot could detect if a customer is angry or frustrated based on key words or phrases spoken/typed in order to more quickly and efficiently resolve an issue.

These experience-related benefits translate into measurable value for hotels. Trilyo, a provider of AI-driven conversational commerce solutions for the hospitality industry, reports that hotels can see up to a 30% increase in direct bookings [AB1] using chatbots. Across every industry, chatbots reportedly help reduce customer service costs by up to 30%.

Which Brands Are Leading the Way?

Many, from famous properties like The Cosmopolitan in Las Vegas to online travel agencies (OTAs) like Booking.com and Kayak. The Cosmopolitan, for example, introduced its chatbot solution, Rose, back in 2017. The solution is savvy and quick-witted; a true reflection of the resort and its guests, according to the hotel.

Booking.com recently launched a chat tool that allows customers to interact with hotels directly through its website. Kayak, meanwhile, uses an interactive chatbot for Facebook Messenger that allows users to search and book travel from right within the app. The tool lets customers find flights and hotels using conversational language rather than inputting dates and going through hundreds of results.

Aloft Hotels has a chatbot assistant, ChatBotlr, that allows guests to engage via SMS anytime, anywhere right from their smart device. According to the company, two-thirds of guests have interacted or made a request using the chatbot. Four Seasons Hotels and Resorts launched its chatbot solution, Four Seasons Chat, in 2017. AccorHotels' Mercure brand also launched its chatbot, Mercure Bot, in 2017 to help guests discover unique local destinations.

More and more, we're going to see hotels leveraging chatbot technology to drive desired customer and business outcomes.

5 Ways Hotels Can Practically Use Chatbots

Now that you know the benefits and which leading brands are using them, how can you start leveraging chatbots within your own organization? Here are five applications worth considering:

1. Optimize the booking process

Consumers visit an average 38 websites before making a reservation, and tend to double the time they spend on the Web the week before booking. They're willing to do just about anything to ensure they get the best deal, and they want to book with a trustworthy source. Chatbots can be tailored to clearly and accurately present information to customers, ensuring they always walk away with the best deal. And with seamless integration across mobile, social and Web, chatbots have been proven to better convert.

2. Create an "always-on" presence

There is no shortage of questions when it comes to travel. Does a property offer valet? How many restaurants does it have? What hours are amenities open? Chatbots answer these questions quickly and efficiently--anytime, anywhere, over any device--to create a positive first impression and ensure the best possible guest experience.

3. Create a virtual concierge

As a persistent presence, chatbots can operate as a 24x7 virtual concierge. They can recommend local entertainment or restaurant venues with the best last-minute rates or quickly gather and share data to deliver personalized messages and offers. For example, making dinner reservations at a particular venue to celebrate a special occasion. Or, which venues accommodate dietary restrictions based on preferences or needs a guest may have shared. If a guest has already visited the location, the chatbot could use historical data to identify previously visited and favored locations. Chatbots grow smarter and more intuitive with each interaction, meaning every future stay will become more personalized and enjoyable.

4. Better engage/support business travelers

Create a personal assistant for your business travelers. The solution could sync with their work calendars in order to serve up relevant information in the right place at the right time (ex: when the hotel's transportation is leaving ahead of an important meeting). Or, partner with organizations that use your venue to host events. Your chatbot can integrate with their platforms to coordinate attendees' schedules with event happenings (for example, sending real-time SMS updates about last minute show schedule changes or when a keynote presentation is about to happen).

5. Personalize and accelerate check-ins/check-outs

A hotel chatbot can expedite and personalize these key processes in several ways. For example, it can send guests a list of transactions, along with a final bill, to sign off on right from their mobile device. The bot could also forward a satisfaction survey to guests as they leave the building (research shows that response rates to chatbots triple compared to traditional email surveys).

Key Recommendations: Making Chatbots Work for You

Raring to go? Good. Here are a few recommendations for getting started with chatbot technology:

Start single-purpose

Set your sights on one specific function you want your chatbot to perform. Think about how the technology can be used as a tactic in line with your larger guest experience goals and objectives. For example, if one of your goals is to increase your customer satisfaction score, you could start out using the chatbot exclusively to push guest satisfaction surveys and increase response rates. If your goal is to improve staff productivity, you could start out using the chatbot specifically for handling mundane tasks like reservation changes/reminders. Start with pre-built responses, knowing you can always work your way up to more advanced AI integrations.

Create smart pre-built responses

The goal is to create a system that can seamlessly engage in natural, two-way conversation; however, oftentimes, this is a "walk before you run" situation. When starting out, think about the ways you can develop flows for different types of inquiries and build out responses that will trigger the right action. For hotels, the easiest place to start experimenting with this is the booking process.

Make it easy for customers to reach a live person, and make sure context transfers

This is massive and can't be stressed enough. Natural language processing has its limitations. Inevitably, some customers will want to transfer to human assistance. This should always be an option, and it should be one that customers can easily access. Customer context (i.e. what device they're calling from, their location, historical/transactional data) should flow with the transfer, empowering employees with the resources and information they need to deliver the best experience.

Chatbot technology will shape the future of guest experience over the next decade. Is your hotel ready?

Reprinted from the Hotel Business Review with permission from http://www.hotelexecutive.com/

Robert Reitknecht

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    Hospitality Leader and Guest Experience Expert
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