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HSMAI Section: Adopting Chat Apps, Bots & AI

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June 30, 2016
Rajesh Rajan

As smartphone adoption has grown worldwide there is a sea change in how people are communicating.

Chat apps have become wildly popular and the trend is changing how people communicate with each other and with businesses. Geography dictates that some apps are more popular than others, but universally popular apps include Whatsapp, Facebook Messenger, WeChat, QQ and Line. Each has millions of users. Whatsapp was the first to cross a billion users and Facebook Messenger seems to be the next one to cross that mark.

These apps are being used for things that they were not initially designed to do. For example, WeChat and Line have services integrated into the app so a user does not have to leave the app in order to use the services. The services can be used from within the app. This ecosystem of services has made WeChat a very big business.

Apps are being launched to cater to specific needs. There is a combination of things happening. Apps are powered by either artificial intelligence, human powered or a combination of both. These allow users to ask questions from within the app and answers are given by a chatbot or person.

What are ChatBots?

Chatbots are computer programs that are developed to simulate a user conversation, as if with a person. One of the big changes was the ability of computers to understand natural language. This led to some very sophisticated services, ones you have already used such as Siri from Apple, Google Voice or Cortana from Microsoft.

A user can ask questions about the weather, call an Uber, book a calendar appointment or open other apps. As the technology develops it will be able to perform extremely complex tasks. Soon the user will be able to ask these programs to do a transaction and not just provide the answer.

We are still in the early stages, but this is another form of distribution and communication technology being used that most hotels will not have access to directly. As these services will be tapping into the Web, they will be using openly available information for prices for various hotels and flights. Think Expedia or Booking.com. However, soon the apps will know when a user travels he prefers to stay at a Marriott, so the user will only see results from Marriott hotels.

Naturally, the big brands and OTAs will be part of this as the guests live on these apps.

This is another way of remaining top of mind to meet customers on the platforms they prefer.

As the adoption of chat apps has grown there is a change in expectation from the consumer perspective. While these are still early days, there are a few challenges that need to be addressed.

1. Experience is not seamless. The technology itself hasn’t been developed to the point where it can be a seamless experience for everyone.

If a user asks the Kayak Slackbot about hotel rates once the results are delivered, the user will need to click over to the results to further dive into if he wants to book something. The information is delivered in Slack, but the user still has to go Kayak to see all the results or if he is ready to book.

Facebook Messenger is expanding its platform to allow businesses to communicate with customers on it. Recently it also announced its bot platform for other companies to build services on top of the application. Hyatt was an early adopter of Messenger for customer service. Hyatt managed the service through a centralized office, unknown to the guest who is communicating, and to the guest she receives all answers through this channel.

2. Responsiveness. Expectations are that responses will be immediate. If social media tools have taught us anything it is that people like a quick response. In a chat app there can be no delay. The app is a medium for quick conversations. If there are delays then it will be seen as a reflection of the service level of the hotel. It is all about instant communication.

3. Fragmentation is going to be a problem. People use multiple chat apps: SMS, in-app messaging or social channels. There are many ways to communicate, and we need tools that allow for seamless flow of communication regardless of the applications a guest is using. Each app creates a silo in which a conversation is happening, but ultimately it all needs to sync to one place. As a guest may start from messaging when she is at the airport but once in-house could end up calling the desk. It is important to know it is the same guest who had a conversation on an app and is now on the phone.

4. Close Cooperation. Coordination is needed between centralized and local teams. What happens when a person contacts a central contact person but the best suited person to help is on the property? It is important to coordinate who is best positioned to handle the guest’s questions.

5. New standard operating procedures. As with social media channels, we will need to develop procedures for communicating on these apps. As these apps make things very informal, would a luxury hotel desire to communicate in this way or would it be more formal? As we learn more on how guests prefer to interact on these platforms, the procedures will evolve.

6. Enabling Transaction. How do we get people to transact on these apps? WeChat and Line have proven people like to transact on apps and have built a multibillion dollar business around this. Who will support room availability, rates and payment information and, how do hotels translate this behavior into reservations?

Conclusion We are in the early stages of enabling communication and transactions via chat apps. As the technology becomes more sophisticated, the issues will get ironed out. However, we need to prepare for the upcoming change. Consumer behavior and expectations are evolving fast and every time hoteliers don’t adapt they get left behind. These tools allow hotels to be front and center of the conversation. OTAs will be there early because of the work they have done to make transactions easy. Some big brand chains also have the ability to jump on this opportunity early as well. The rest of the market is dependent on how quickly the technology vendors evolve.
It is an interesting time and again mobile is at the front driving this change.

Rajesh Rajan has over 10 years of experience in growing hotel revenues and is the co-founder of website personalization platform Offerly. He has been responsible for pricing, distribution and demand optimization for both branded and independent hotels and has provided insights on the intersection of new technology, trends and tools.

©2016 Hospitality Upgrade
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Here are some apps moving into hotel and travel which at their core are communication tools.

Facebook Messenger
The chat app by Facebook has over 800 million users. Facebook just released M, an assistant powered by artificial intelligence and real people. Since Facebook has the scale it is working to bring this service to all its users. And, it will have do it in a way that works for its massive user base. The end goal is to turn Messenger into a transaction platform.

A platform for internal office communication, Slack has the ability for developers to build apps on top of it. The apps built on it are called Slack bots. These allow people to ask questions and get results within Slack. These questions can be asked in natural language. This is what a query looks like: “/Kayak flights from vancouver canada to newyork November 15 to November 21.” The results displayed can’t be acted on within the platform, but this means it is moving some of the traffic from hotels and corporate booking tools to this new platform. 

X. ai
This is an artificial intelligence powered service still in very early stages. Currently working on expanding its services into hotel and travel booking, this means it will be able to understand the hotels a user prefers, his loyalty card number, special requests and much more.

Then there are a new breed of services especially built for the hotel and travel industry.

Lola Travel and Pana
Both these apps have the same idea: Be a travel agent, concierge and personal assistant for a smartphone driven world. Imagine having someone available to you who can take care of your travel needs. All you need to do is tell them when you are looking to travel and they just take care of it. Making travel arrangements is still quite complex and time consuming. A service like this simplifies things for people who are frequent travelers. This can be a quite powerful tool for business travelers, companies that do not have corporate travel programs or agents, or people who don’t like the hassle of shopping for hotels.

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