Why is Conversational AI becoming a trend in Hospitality?

Why is conversational ai becoming a trend in hospitality?
Why is Conversational AI becoming a trend in Hospitality?
July 15, 2022

Let’s start with some facts:

  • OTAs have already captured 40% of the global travel market (i.e., airlines, hotels, packaged tours, rail, and cruise), including two-thirds of gross bookings in the online hotel segment.
  • Hotels lost 20% of their staff when compared to pre-pandemic and now they’re facing difficulties hiring, especially when hourly wages have increased +10% (nominal) relative to Feb 2020.
  • Customers who had good experiences in the past spend 140% more.
  • 67% of hotel guests said they were most satisfied with the feeling of empowerment the hotel enabled through technologies.

Having these numbers in mind, let’s now explore why hoteliers are adopting Conversational AI as a response to the reality previously exposed. 

Revenue Generation

Revenue Management is one of the biggest concerns of general managers. That’s why, without surprise, increasing revenue is a major reason for the adoption of AI in the hospitality industry.

Hoteliers are implementing AI-powered messaging solutions to maximize profit across all the steps of the guest journey, from direct bookings to room upgrades and upselling, and the results are very clear: the digitalization of guest interactions brings more revenue,” states Tiago Araújo, founder of HiJiffy.

In 2021, HiJiffy helped the 1.600 hotels using our Booking Assistant to generate +40 million GBP in direct bookings, he adds.

Direct Bookings: Allow guests to book anytime and anywhere

With an AI-powered conversational virtual agent hoteliers can benefit from an omnichannel solution available to provide instant replies, streamline queries and perform bookings wherever their guests are, from the hotel’s website to social media or messaging apps.

This way hotels can easily convert anonymous visitors into qualified leads, thus saving on OTA commissions by increasing direct bookings.

Room Upgrades: Help guests enhance their stay by purchasing room upgrades and extra services before their arrival

Hotels are looking to increase their bottom line by reaching to their guests automatically at the right place at the right time, based on availability and guest segment in order to get some additional revenue per available room.

Upselling: Offer crafted campaigns to guests, increasing both revenue and customer satisfaction

Hoteliers are using AI as hotel upselling software to generate revenue automatically by creating personalized campaigns that target guests based on their profile with in-stay opportunities – e.g., spa services, on-property restaurants, etc. – to get more sales.

Retention: Reduce customer acquisition costs by developing a loyal and profitable client base

By making every interaction that a guest has with their hotel seamless and enjoyable, hotels are then able to develop strong post-stay engagement strategies.

By sending segmented offers, hoteliers are able to create a sustainable customer basis with recurring clients. This is possible by making the best use of Big Data: accommodation providers are able to craft personalized promotions for each guest based on past data.

  • e.g., If a past client booked a stay and then asked for access to the Golf Course, a few weeks later the hotel can send an exclusive deal “Golf Experience – Hotel + Court Course – with 20% off”.

Guest Experience

“By unlocking the power of conversational AI, hoteliers can customize instant replies, streamline queries and perform bookings wherever the guest is, thus exceeding their customers’ expectations by providing a fast and personalized guest experience”, underlines HiJiffy’s CEO, Tiago Araújo.

But before exploring this topic in detail, let’s understand some statistics in this regard:

  • The Sprout Social Index reveals that only 56% of travel and tourism brands respond to customer messages on social media, with 40% of consumers expecting a response within the first hour, and 79% expecting that answer in the first 24 hours.
  • And, 47% of those surveyed indicated that responding to customer service questions in a timely manner is the top action a brand can take to get customers to buy from them over a competitor.

Considering these facts, it’s easy to understand why each day more and more hotels and adopting AI to improve their guest experience. Let’s understand how.

Omnichannel: Have a global view at a glance of all the communication channels

Apart from their websites, hotels can connect multiple communication channels, including the most popular social media and messaging apps, from WhatsApp to Facebook or Instagram, and from Google My Business or WeChat, Line or Telegram. And email and SMS are also included, of course.

Moreover, they’re able to track and respond to all requests on a single screen, regardless of the channel used, with a centralised inbox.

Multilingual: Interact in +100 languages through bi-directional language translations

AI is capable of eliminating language barriers, allowing hotels to provide a human-like conversational experience to exceed the guest’s expectations even if no one from the staff can actually speak the customer’s idiom.

Instant 24/7 live support: No queries left hanging with lightning-fast answers to guests at any time of the day

Hotels can avoid having to hold on to a customer to attend to their request and guests are able to solve +85% of their usual queries instantly. If we consider the Sprout Social Index findings, this benefit of using AI can be a game-changer for hoteliers.

But what’s more, when needed, hotels can still have a smooth handover to a human agent without affecting the user experience, providing context to the team to continue the conversation.

Personalized and enriched interactions: Customize the chatbot accordingly to the hotel’s brand guidelines and tone of voice and facilitate the interactions with visual elements

Conversational AI solutions can be inherently personal and informal, allowing hotels to adjust the tone of voice to align with brand guidelines, thus ensuring that all digital interactions do not come across as forced or robotic, but rather personalised and engaging. Or in other words, maintaining the human touch.

Additionally, it can go beyond the restrictions of text-based interactions of the traditional chatbots, being able to enrich interactions with visual UI elements (e.g., buttons; calendars; maps; carousels; images; and more), helping with interactive elements when the conversation isn’t the most effective choice.

Process Automation

Process automation is a major reason for the fast adoption of AI in hospitality.

“As hotels struggle with the lack of staff, many managers across the globe are looking for technological solutions that can increase productivity and optimize resources while enhancing their guest’s experience”, explains Tiago Araújo.

“By automating time-consuming processes and freeing up the hotel team to perform more complex and impactful tasks, hotels can maintain their service levels with fewer human resources”, adds the founder of HiJiffy.

So, let’s understand what kind of improvements are hotels expecting from AI in this regard.

Digitalize check-ins and check-outs: Streamline check-ins and check-outs through digital online registration

Hotels can drastically improve the customer experience by removing potential bottlenecks such as manual registration forms or in-person data delivery. In addition, hotels can reduce operational costs by enabling staff to focus on critical guest-related tasks. 

Enable contactless hotel experiences: Provide an experience that is aligned with the life of today’s traveller

By implementing conversational AI solutions, hoteliers can allow guests to communicate from the comfort of their room with their respective teams, creating a more dynamic communication flow and decreasing the resolution time of their requests, hence delivering a higher quality service.

Route & Escalate: Create powerful workflows and implement specific escalations based on the type of requests received

AI can be critical to optimising work efficiency. By routing to the relevant team members and/or departments the guests’ requests based on their specificity, hotels can significantly improve both staff productivity and guest satisfaction.

Automate administrative tasks: Replace time-consuming phone calls by implementing automatic (yet personalised) messaging solutions

Notify guests when their requests are ready, and or implement follow-ups and set fallbacks if the previous message fails is easy with an AI-powered messaging solution.

Teamwork & Productivity

Hotel general managers are using technology to get full visibility over the teams’ efficiency and collect actionable insights to optimize processes and reduce operating costs.

“Putting it in a simple way: hoteliers need to find smart ways to do more with less without compromising on service levels. And the solution relies on technology, especially AI-powered solutions”, states the founder of HiJiffy.

Let’s understand why AI is emerging as a big trend regarding the improvement of teamwork and productivity in the hospitality industry.

Streamline operations: Free up staff for more complex and add-value tasks by automating up to 90% of the typical guests’ interactions.

Supported by AI-powered conversational solutions, hoteliers can optimize process efficiency and reduce operating costs without compromising on service levels.

And one of the best examples in this regard is the automation of a task that represents a big part of the front-office teams’ workload: answering guests’ queries.

Track and analyse performance: Understand performance at macro and micro levels

Hotel managers can easily track KPIs and monitor progress on objectives (Messages resolved, Net Promoter Score, etc.). By analysing all the data collected, hoteliers can find actionable insights to maximize revenue and guest satisfaction.

Improve teamwork: Bring all the guest communication together in one place, guaranteeing seamless coordination of all guest’s demands.

Supported by a robust AI-powered platform able to centralize all the guest information, it’s easier for hotels to enable high-quality teamwork and seamless internal communications.

Reward achievements: Use analytics to easily stay up-to-date on the team’s performance.

By accessing both real-time and historical data, hoteliers can easily track the performance of each department and recompense top performers, as well as understand which team members may need improvement.

Artificial Intelligence makes it easy to spot opportunities to increase efficiency and improve service by keeping a close eye on communications.

Guest Satisfaction

Hoteliers are adopting AI to increase guest satisfaction and get rewarded with retained customers, positive reviews and referrals.

“After a very challenging period as a consequence of the pandemic, hotels are trying to make the most out of each guest in order to recover the revenue losses. This means that more than ever, hoteliers are focused on delivering memorable experiences with stellar customer service”, says Tiago Araújo, founder of HiJiffy.  

Let’s explore how are hotels addressing this specific topic with the help of AI-powered conversational solutions:

Increase Recommendations: Encourage satisfied customers to recommend you on review platforms and turn every customer into an ambassador.

With the implementation of segmented campaigns targeting happy customers right after their stay, hotels are able to get more positive reviews on TripAdvisor, Google My business, etc.

Prevent Negative Reviews: Let guests proactively communicate issues in a simple and immediate way and act immediately on given negative feedback.

By offering an open and instant communication channel to their customers, hotels are able to respond to their guests’ needs in real-time to make them feel heard and appreciated, thus avoiding negative comments on review platforms as part of hotel reputation management.

Expedite Service Recovery: Initiate a fast service recovery, with improved staff communication and collaboration, immediately after receiving negative feedback.

By integrating the guests’ communication channels with the hotels’ systems (CRM, Maintenance and/or Housekeeping tools, etc.), hoteliers are able to automatically deploy service recovery workflows, thus assuring constantly the best service levels.

Improve the customer journey: Collect specific data and understand in detail the customer’s experience at each stage of the customer journey.

Gather particular feedback while guests are on the premises to reveal insights into how to improve their current experience.

Data Management

The use of Big Data is key to offering highly personalised services for elevated guest experiences.

“Hoteliers are aware that today’s consumers don’t enjoy being bothered with offers that are not aligned with their profile. That’s why we are experiencing an increased interest in the use of AI and Big Data to develop granular approaches for each guest segment from hotels”, states HiJiffy’s CEO.

“Only this way hotels will be able to maximize revenue by developing targeted campaigns and reduce OTAs dependency by boosting customer loyalty”, he adds.

Centralise information: Consolidate all the guests’ data from different communication channels in a single database to easily retrieve data.

Preserve History: Keep a record of each conversation, making sure that details aren’t forgotten on the next interaction with the hotel.

Enrich database: Automatically process the collected data to delete duplicates or group multiple stays in the same guest file, qualifying and structuring the data.

Create segmentation: Develop rich customer segmentation for more targeted communication, crafting specific campaigns for each type of guest profile

Why is Conversational AI becoming a trend in Hospitality?
Marketing Content & Branding Executive

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