How the President Hotel increased loyalty by dropping their app

There was an app for that…

In the winter of 2013, the management team of the President Hotel was anxious to see how guests would react to the hotel’s new app. The app looked sophisticated enough: points, feedback, membership sign up, features to explore the neighborhood using GPS. Even the print invitations to download the app featured QR codes which skillfully blended the hotel’s logo with a golden colored square maze.

App abandonment rates

A little more than 2 years later the app still is available, but with low download rates of less than 2% and even less engagement coming through the app, the project failed to roll out to the other 18 sister hotels of the group. Low adoption rates shouldn’t come as a surprise: more than 65% of smartphone users don’t download a single app on a monthly basis. On a global level the average download of apps is 1.7 apps per quarter. And the battle for the consumer’s mobile attention doesn’t end there. About 77% of apps are abandoned within the first 3 days and 90% are dropped after 30 days. The President team isn’t alone. From our integration into larger hotel chains apps, we notice a big drop in adoption depending on the size of the hotel chain. Larger hotel chains (where a single app serves the same traveler more frequently) see a lot more engagement than apps launched by independently branded hotels or smaller hospitality groups. The user overhead for a one-off stay simply is simply too high.

The formula your customers love: Simple + Useful

Earlier this year, we launched a much simpler process for Club Floor guests of the hotel: guests are sent a simple text message after they check-in by the concierge. The message asks if they are settled in well and invites guests to send their requests by sms reply if they needed anything. The numbers are staggering: while the app fetches approx. 50 requests per month, customers interact with 1,300 messages in the same time through the SMS. The volume is easily handled by the concierge and the front desk as it reduces a lot of the calls that guests used to place to the front desk, reducing the real-time resource requirement of receiving phone calls. Messages are automatically routed based on the message context using natural language processing and up selling opportunities or escalatory situations are identified immediately. A request containing a limousine transfer to the airport for example, is routed instantly to the team handling airport transfer from the outer bay area of the hotel whereas a guest mentioning that the rooms don’t look at all like the pictures on tripadvisor gets tagged as ‘negative posting threat’ and is routed straight to the Guest Relations Manager and the GM who are best empowered to recover and avoid the public criticism.

Hype or Ripe?

While it has been obvious from the get go that guests loved interacting through simple text messages, the full extent of benefits became clear to management once some of the results were in:

– Negative reviews (1-3 stars) on the internet reduced by 47% within 6 weeks simply because we are now given the chance to react when things go wrong.
– A lot of up-selling opportunities are materialized through the texting channel by guests asking for anything from transfers to restaurant and spa reservations.
– Especially regular visitors use SMS messages to send their reservation request frequently. Their ‘go-to-hotel’ is simply a number in their phone book they can text.

Altogether approx. 35% of guests interact through the mobile concierge service at the President today. The trend has been increasing as more and more carrier plans have moved to unlimited texting and the management coming up with new ways to invite the guest to interact. The app in the meantime, will be phased out by the end of this year, as neighboring merchant promotions are expiring.

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