Hospitality Wed, Dec 13, '17
Can Robots Help Hoteliers Drive NOI?


Hoteliers have actually done pretty well in 2017, despite facing pressure from the continued growth of Airbnb and rising operating costs. The industry has done well to adapt to market dynamics, but it has only made maximizing net operating income (NOI) that much harder. In response, even the biggest franchises in the industry are looking for new ways to drive revenue and reduce operating expenses. Hotels like Marriott and Hilton have adopted stricter revenue management policies, while also making significant investments in new marketing and operating technologies.

One such class of technologies revolves around automation. Robots, both physical and digital, are increasingly finding their way into hotel operations and are helping hoteliers drive NOI at both ends of the equation.

Robots Excel at… Conversations?

Marketing and customer service are two rapidly evolving disciplines in business. Marketing, in particular, is experiencing a dramatic evolution - one-directional advertising campaigns have morphed into brand-centric storytelling, and now, that storytelling strategy has blossomed into conversational marketing.

At the heart of it, the conversational user experience sets the goal of marketing and customer service to create engaging, bi-directional interactions between businesses and guests. These interactions involve the customer, give them control over their experience, and is immensely tailored to the individual.

Robots may seem like odd bedfellows for a conversational interaction, but artificial intelligence (AI) is actually enabling machines to engage in rich, helpful conversations that provide tremendous benefit to customers.

Robot-Led Conversations Optimize Expenses

Expenses are the most controllable attribute of NOI. Tight, effective management can make an enormous difference on the operating efficiency of a property, and leveraging robotic automation can pay immediate dividends.

Chatbots are already being leveraged in retail, banking, travel, and hospitality to create a conversational experience for customers requiring assistance or support. Customer service can be a complex and expensive area to manage for a multitude of reasons, but these AI-powered bots provide a low-cost, high-efficiency method to automate low-value, repetitive customer interactions while creating an engaging experience with the brand.

Automating these conversations allows hotel operators to reduce call center costs dramatically and overall support costs by 30%, all while delivering a 24/7, immediate response to guests and potential customers. Additionally, some hotels are even gaining efficiencies by augmenting or automating their concierge services, using robotic form factors like SoftBank Robotics’ Pepper to deliver a conversational user experience for incoming guests.

Efficiency gains have already been captured in other industries, with IBM reporting that cost savings from customer service alone exceed eight billion dollars. Hoteliers have a surprisingly easy opportunity to create a unique brand experience for customers and drive NOI by controlling expenses.

Tristar Case study video (Hilton Garden Inn)

Robot-Led Conversations Drive Revenue

Automated concierges and attendants can be an operator’s best friend, but robots can serve marketers, as well. Integrating this kind of conversational technology into corporate and property-level marketing has shown improved conversion rates for digital ads and reduced bounce rates to websites.

Robotic automation offers marketers a plethora of benefits, including:

- Richer data collection and consumer insights;
- Automatic personalization of customer content, and;
- Proactive customer engagement
- More effective, real-time management of occupancy and market rents

On-property robots can facilitate conversations that enhance ancillary income by promoting on-site amenities and rewards programs. Combined with the powerful impact of web-based chatbots, these technologies lead to a stronger brand and more revenue converted more efficiently.

The Bottom Line

Innovation labs for leading hotel chains are already focused on the potential of robotics, and investments will only grow as investors demand more profits. Smart, measured investments in robotics will set independent hotels and industry powerhouses up for long-term success, creating more and more opportunities to drive revenue and optimize expenses. Join us for future blogs where SoftBank Robotics will focus on how to adopt such technologies and deploy them across an organization successfully.

As overwhelming as the pace of digital change can be at times, new technologies like robotics will help hoteliers adapt to market pressures and maximize NOI, ensuring great returns for investors, better experiences for guests and employees, and the continued success of the hotel industry for decades to come.

Click here to learn more about Pepper.


Brian Shulman

Written by Brian Shulman