Key ROI metrics for hotel chatbots

6 May 2019
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Hoteliers, in general, are aware of the potential of chatbots. Most intend to implement one in their property within the next 24 months.
This article gives you a clear idea of the key ROI metrics for hotel chatbots. So check out the Key Performance Indicators that you can use to assess, monitor and optimize the business value of chatbots in your hotel(s).

In a nutshell

Chatbots have become an essential component of any e-commerce strategy. And, as you integrate them in your hotel’s direct sales funnel, you need to monitor performance and know what actions to take at each step of the way.

– 70% of customer communications could be handled by a machine. Subsequently, artificial intelligence helps your team get slightly less busy and more productive because chatbots take away customer pressure.

– 50% of hotel chatbot requests are related to making a reservation.  

– 15-20% conversion is what your hotel chatbot can achieve on its own.

 –30-40% conversion is what you get if your chatbot and sales team work together.

Metrics only make sense if you have a clear strategy

Begin with the end in mind’ is my favorite habit from The 7 Habits of Highly Effective People. Basically, what are your goals and how could a hotel chatbot help you achieve them?  

– Improve/optimize customer service

– Boost direct sales

Improve/optimize customer service

Hoteliers are constantly overwhelmed because they have to deal with what’s coming at them. For instance, when front desk agents pick up the phone, they have no way of knowing what’s on the other end of the line. Whether it’s a group request or a customer that just wants to know the check-in time or if there is a parking spot close by. So, most of the day is spent on urgent-but-not-necessarily-valuable tasks instead of important tasks. Let’s be honest – how much of your front desk and reservation agent’s valuable time is wasted daily with useless crap?

Over 70% of customers’ emails, text messages, and phone calls are repetitive interactions. Those interactions can and should be automated as they take time. The fact is that at certain times a human answer doesn’t create any more value than a machine. Thus, skimming through the chit-chat would help your team cut the noise and refocus its efforts to manage better, complex and valuable interactions.

Boost direct sales

For 100 visits on your website without a hotel chatbot, 49 visitors are interested in booking a room and wanting to know your prices. Only 9% reach your booking engine and 2 end up with a reservation*. E-commerce chatbots are here to help you increase direct conversion and the progress margin is huge!

You have 2 kinds of customers:

  1. The ones that know what they want and are happy to roam through your website on their own and go to your booking engine.
  2. Those that need assistance (either because they have a specific request because they are not used to booking hotels or just because that’s how they like it). Those people have a context that you should understand and welcome if you want to get their money.

Standard 2-adults-for-1-night requests are the specialty of Booking.com. So, of course, you should be able to receive them as well and that’s why you have a booking engine. However, on your direct sales channels, you also get more sophisticated requests that you want to be able to handle as well. This is because they usually have a higher ADR and booking.com can’t manage them. The reason people go to your website is that they expect more personalized service and information. So give it to them! Chats and chatbots are the ideal tools to get and manage the requests that need personalization.

Customers that engage through chat know that they are going to travel. As an accommodation provider, you want to make sure they travel with you. According to a study by Air France, 20% of chatbot interactions convert into a sale within the next 4 weeks – which is the average expected from chat conversations across industries. Chatters are definitely bookers.

Set clear Key Performance Indicators (KPI)

Conversation success rate

The first KPI that comes to mind is the conversation success rate. A conversation is deemed successful when the user gets the information he wanted or could successfully process his request.

The success rate that hotels can expect from a good chatbot is between 70% and 80% after 1000 conversations. To begin with, chatbots are not something you turn on to magically solve most of your customers’ requests. In fact, the success rate of your hotel chatbot depends on your provider as much as on the quality of the predefined answers you insert in the bot.

Right after a city hotel implements our chatbot, the results usually look like this:

– 76% of conversations are handled successfully by the chatbot.

– Some conversations need to be optimized. Here, you need to have a clear understanding that 50% of chatbot mistakes are not related to AI but to incomplete predefined answers provided by you, and over which you have total control. Therefore, by taking the time to optimize your chatbot’s predefined answers you can increase successful conversations from 76% up to 88%. (More details here)

– The 12% of misunderstandings should be dealt with by your AI provider through a machine learning process. There will always be a margin of error.

Chatbot analysis for Via Augusta Hotel BarcelonaConversations%
Chatbot did a good job1976,00%
The predefined answer needs to be improved by hotelier312,00%
Chatbot didn’t connect the customer request to the right answer312,00%
Total25100,00%

Booking requests

Surprisingly, even if you have a big, very visible booking engine, between 30% and 50% of the questions your chatbot will get are related to booking a room. Usually, your most valuable reservation requests are going to come through the chatbot. So make sure that your bot is able to accommodate more than just regular demands. It should be able to handle group requests. Also, people with flexible dates looking for the best deal on a given month.

dashboard key ROI metrics for hotel chatbots quicktext

Quicktext sales dashboard helps you monitor your chatbot conversion and sends the leads that didn’t convert automatically to your sales team.

Direct conversion

Booking conversion is another of the key ROI metrics for hotel chatbots that you need to monitor closely. Sometimes, conversations will go very well with the chatbot and then abort when the customer is transferred to the booking engine. Average chatbot conversion should be around 20%. While it is clear that not all requests will be confirmed, if your chatbot conversion rate is below 15% there is a problem and it might be worth checking the UX of your Booking Engine.

Here’s one example that I see every day. Some booking engines do not have a very good UX for multiple room reservations. So, as soon as you have a request for more than 4 people, conversion can become very difficult.

For example, I tried booking for 4 people with this booking engine. While there were several rooms available in the hotel, this well-known booking engine’s response was:

hotel key ROI metrics for chatbots quicktext

Maybe your booking engine doesn’t have this flaw. What I mean is, that there is always a flaw somewhere in your reservation funnel. You need to locate and correct it.

Conversion by your sales team

Whenever there is a reservation request taken by your chatbot, you should receive an alert with all the relevant details to:

  1. verify if the customer confirmed his reservation
  2. take action if he didn’t

Chatbot conversations give you a huge sales advantage compared to any of your competitors.

  1. A potential customer that started a conversation is hugely qualified as he is ready to start a relationship with you.
  2. You get all his personal details and have a precise idea of what he wants so you know what buttons to push to close the deal.
  3. The conversation is open now so you have a perfect excuse to get back to him and keep the conversation flowing.

Conversion by your sales team should be around 30-40%. If you are below this threshold there is an issue with your sales process. 

example key ROI metrics for hotel chatbots quicktext

An example of a booking request alert sent by Zoe to your hotel commercial team.

If you wish to further discuss key ROI metrics for hotel chatbots or want to learn more about how chatbots help you boost direct sales, please visit our website or feel welcome to contact Benjamin Devisme at bde@quicktext.im.

*Source: The real talk on hotel website conversion rates by Jean-Louis Boss, Fastbooking

Key ROI metrics for hotel chatbots
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