How AI Chatbots Are (Surprisingly) Increasing Hotel Guest Loyalty, with Daan de Bruijn

Episode Transcript

Daan: When guests reportedly experienced a delightful surprise, an astonishing 94% of them expressed an unconditional willingness to recommend the hotel compared with only 6% of guests who were fairly satisfied. From the hotel’s perspective, this can be done in a programmatic way, let’s say, which sounds like it would compromise on the personal experience, but it’s rather the opposite. And customers who are more satisfied are also more likely to engage on whatever comes later in the journey because you trust the brand more.

Robin: Welcome to the “Innovative Hotelier Podcast” by “HOTELS Magazine,” with weekly thought-provoking discussions with the world’s leading hotel and hospitality innovators.

Welcome to the “Innovative Hotelier Podcast,” brought to you by “HOTELS Magazine.” I’m your host, Robin Trimingham, and my guest today is Daan de Bruijn, Co-Founder and CEO of Bookboost guest communication platform. Today we’re discussing whether AI can be used to build real guests relationships without personalizing the experience.

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Robin: Welcome, Daan.

Daan: Hi, thank you. It’s very nice to be here.

Robin: Well, it’s a pleasure to meet you. I’m still learning about AI as I think lots of hoteliers are, so I think this is going to be a pretty fascinating conversation. Here’s the thing, a lot of us, for different reasons, have had an experience with a chatbot that was less than positive. So, what percentage of guest interactions at a hotel should we use AI for to reduce the need for live customer support?

Daan: In short, this number can be pretty high. We’ve seen examples where it’s even close to 100%.

Robin: Wow.

Daan: I think in best case, I’ve seen 92%. But that’s not only chatbot technology that does the job, that’s one part of it, let’s say. So basically, when zooming out a bit, a good goal to set is to see how low-value touchpoints can be done in a way without needing human resources for that. These are things like booking adjustments, passport scans, answering practical questions, what time is checking, for example, touchpoints that do not necessarily add a lot of value done by a human, and instead, by providing self help tools, for example. Many guests actually prefer to do these things themselves.

So if you can make that available to guests, a large share will be automated, so to speak. And of course, there will always be those questions still coming in, right, and their chatbot technology can definitely help and automate parts of it. But it has to be sad that the technology, to really replace a human being, as in, instead of a customer service agent, the technology is not there yet. For example, OpenAI, SEO, SEMs, Altman recently said, who co-founded a company with Elon Musk, by the way, that it will still take a few years before these data sets and algorithms are really at a level where it can be considered a full standalone solution, let’s say.

And what I think will happen is that once very large existing models will be available, and this is known as AGI, and that’s Artificial General Intelligence, that companies and startups will be able to tap into that. And for example, when you’re focusing on a certain vertical, that you add your unique data to those openly available big data sets. And by that time, I personally believe that these will really be able to be standalone solutions, which is still a few years from now, I would say.

Robin: Okay, so already I’m intrigued because this is the first time that I’ve heard the term AGI. And I know, in a hotel industry where the entire industry is built on the foundation of protecting guest privacy, that all of a sudden, some of our listeners are going to be sitting up in their seat going, “Yeah, okay. So, how do you assemble data and answer these questions?” I’m gathering it’s a variety of social media platforms without compromising guest privacy because we also have all the global privacy concerns and initiatives going on.

Daan: Yeah. Data privacy is extremely important in a world that’s becoming more and more digitized. And basically, each company has its own data processing procedures, and this can all be understood by data processing agreement, which pretty much each company has to have, right? And I think it’s a really good thing indeed that there are strict regulations overseeing those to protect the data privacy of the customers at the end of the day because in a world that’s becoming more digitized, of course, we need to look at, that this is used for the right purpose and not being misused in the future. So, definitely a very important element to look at.

Robin: Yeah, I can completely agree with you. This is just going to have to be an evolving process from, I guess, data privacy, data security, sharing of information on a global level. Getting back to the hotels, though, have you got any data that you can share with us regarding companies you’ve worked with, where there’s been cost saving or revenue increases as a result of the implementation of an AI-driven guest messaging platform because hotels, they care a lot about revenue?

Daan: Absolutely. Yeah. I’m happy you asked. So, just to answer the question, I think it’s good to understand a little bit of the background here. So when context is known about a guest, and that sits with having data at the core, and structuring that, and being able to understand that, being able to understand context about a certain guest. So the more you can add to a guest profile in terms of relevant information, the more precise you can be in your outreach or in your engagement. And that means that you can tailor the experience and offer things at the right time. And that actually could be used both for cost efficiency purposes, and also for revenue generation indeed.

And also, in addition, what some do, and good examples are that when you’re successful at automating administrative-related touchpoints, let’s say, in first place, such as passport scans is a classic example, this can be done digitized, or this can be done digital prior to the guest physical arrival and such. Those are some practical examples of how you can automate low-value touchpoints. And then, in addition, what can be done as well is, for example, when offering a “skip room cleaning” to a guest for guests that are staying longer than one night, which is often a standard, many guests will actually appreciate that.

So by knowing the context, and this is a simple example, knowing that the guest is staying longer than two nights, you know that normally you have to clean the room. So to that segment, you could offer, on the second day, for example, to skip room cleaning, and, of course, that’s also very good for the environment. And in those examples, actually, the conversion rate is really high because you can offer it at the right time and you can offer it for guests for whom that is relevant.

So in this case for guests that are staying longer than two nights, which then is the segment. And this can save, we have one example where it saves a five-digit number in monetary value and also where they’ve calculated that they save 42 liters of water for each cleaning that is skipped. And that enables this brand to save 42,000 liters of water weekly for a 200-room hotel, and that’s the equivalent to a private swimming pool.

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Robin: I think this is a great example. So, if I’m following you, basically, if you timed this right, you could ask people even the night before, “Do you want housekeeping tomorrow?” And that could also help you with your staffing levels and all kinds of things.

Daan: Precisely, exactly. So those are sets and operational example. And then to answer the question on, example for revenue generation, it’s the same principle. So, offering a relevant and accelerated service at the right time. And a good example here is, for example, breakfast. So not every guest, if there’s rate plans in and excluding breakfast, will choose to include breakfast when making the booking because some prefer to keep that open. Like, “I don’t know yet. It’s a few months from now, I don’t know yet. Perhaps I want to just go out and explore and have breakfast elsewhere.”

Offering breakfast again a few days before check-in could be the right time for a guest that has decided not to book breakfast before to still add it to the stay because perhaps they still haven’t decided where to have breakfast, then they will make use of the opportunity. So, it’s very much about understanding a guest, basically, their needs throughout their journey. And if you can figure that out and find those opportune moments to drive relevant engagement, this can create really big numbers because it’s done at the right time and in a relevant manner.

Robin: I wanna ask you another question because I think there’s just no limit to how far this could go in helping a guest and building the guest relationship, which would enable to build brand reputation, too. Supposing you’re an urban hotel, and there’s a big snowstorm, and you know that the vast majority of your check-ins are coming through the airport. So there’s going to be all kinds of delays and things. Could your system some way improve the guest experience?

Daan: The short answer is yes. And indeed, opportunities are endless, and that’s really the beauty of it. So what would have to be understood in this example, is the flight number. So, the guests could be asked to fill that in a pre-registration form, for example. And knowing that, by tracking the data, it could be understood in which flight they are, and this data is accessible in terms of delays and such. And based upon that, then you could trigger certain follow-on messages, and that could be, in this scenario, could perhaps be a good opportunity to help the guests or to first make them know that you are not expecting them on perhaps the time that was meant to be, yeah, but a little later.

And in addition, perhaps the guests could be really helped here by helping them with some transportation means and such. So, it’s really interesting, and the principle is to understand the context. And with relevant data, which is accessible, this can be done in a structured manner, which then makes this tailored experience at scale, right, for each and every guest.

Robin: So basically, because this is all AI-driven, you don’t even have to have a human who realizes all of this. The system, once it’s learned enough, can say, “Oh, the airports backed up. Oh, I should send out this kind of message.”

Daan: Precisely. And one principle that then I’m a big fan of and believer in is explained in a book, which is called “Power of Moments.” And “Power of Moments” explains that…and this is a study done by TripAdvisor actually. They found that when guests reportedly experienced a delightful surprise, an astonishing 94% of them expressed an unconditional willingness to recommend the hotel compared with only 6% of guests who were fairly satisfied. And what is a delightful surprise? That is something you don’t expect. So, this is a good example because this is something that you wouldn’t expect when traveling.

And from the hotel perspective, this can be done in a programmatic way, let’s say, which sounds like it would compromise on the personal experience, but it’s rather the opposite. Because of the ability to do this in a programmatic way, it’s possible to deliver such tailored experiences at scale, so for any guest, because it’s structured. And that really has a big effect on customer satisfaction and loyalty. And customers who are more satisfied are also more likely to engage on whatever comes later in the journey because you trust the brand more. So, also then later, if you make relevant offers, they’re more likely to engage on that.

Robin: I think this is a fascinating conversation. Let’s end this on a strong note here. I know some of our old-school hoteliers who are listening are going to be concerned that only a human is capable of knowing enough about human nature to surprise and delight a guest at the VIP level. What would be your response to that?

Daan: We as humans are unique, and that makes it interesting, so we don’t want to move to a world that’s empty and not exciting. So, I definitely think that’s a really relevant question to look at. And what I would say here is that we can use technology in a way that it accommodates us. So it should help, it should do things for the better. And in our hotels’ scenario, I think it starts by looking at all sorts of touchpoints or tasks that are non-value adding.

How can I use technology to automate those so that my staff does not need to do repetitive tasks that do not add value both for the customer, for the guest, but also for the employee? Because you don’t want to do the same thing all the time and rather free those resources up so that those can be actually used for those unique experiences such as having that chat that you can never replace with technology, sharing stories, sharing travel experiences, etc.

This is what brings excitement. This is what is life. We all want to gather unique experiences, and technology can be used to facilitate, at the end of the day, to have actually resources available and have time and mind space to be able to do so. So that’s what I would say to those hoteliers, and definitely technology should be used for the better. And I believe in a world where it shouldn’t replace but where it should empower basically.

Robin: Daan, thank you so much for your time. I’ve learned a lot today, so I’m hoping that all of our listeners have as well. You’ve been listening to the “Innovative Hotelier Podcast,” brought to you by “HOTELS Magazine.” Join us again soon for more up-to-the-minute insights and information specifically for the hotel and hospitality industry.

You’ve been listening to the innovative “Innovative Hotelier Podcast” by “HOTELS Magazine.” Join us again soon for more conversations with hospitality industry thought leaders.