An analysis of the effects of automated customer service on service quality in Maltese hotels

BY FABIEN SANT FOURNIER, MBA IN INTERNATIONAL HOSPITALITY MANAGEMENT IN ACADEMIC AFFILIATION WITH THE EMIRATES ACADEMY OF HOSPITALITY MANAGEMENT

Market trends develop quickly in today’s digital age. The real time responses typical of instant messaging and social media have given rise to expectations of instant replies in all facets of communication; including interaction with companies. Many corporate and governmental websites make use of automated customer service technology in order to fulfil this growing need. However, the implementation of such technology together with research into the topic have been very limited within a hospitality context. This thesis contributes towards filling that gap by providing an analysis of the effects of automated customer service on guest satisfaction in Maltese hotels.

A case study of a Maltese company owning several small hotels was undertaken in order to thoroughly explore the topic. The case study consisted of the implementation of two chatbots on the websites of two of the company’s hotels. Qualitative research was then carried out which consisted of an interview with hotel management in order to explore the factors affecting chatbot adoption. After the implementation of the chatbots, surveys were distributed amongst respondents of both the chatbot and users who chose to use standard forms of communication. Respondents were requested to answer questions based on the service quality of their interactions with the chatbot and hotel employees.

In this study an endeavour was made to understand the attitudes of hotel management towards automated customer service which could reflect on the justification for its adoption or lack thereof. There appears to be a clear demand side for a human counterpart with respondents of the surveys highlighting the shortcomings of the technology, a desire for personal attention and need for a genuine connection. Despite these identified shortcomings, respondents to the chatbot surveys rated their interaction with the chatbot as feeling natural. (33% of respondents strongly agreed and 33% agreed). Although there is a clear desire to maintain the status quo when it comes to the involvement of human respondents in guest correspondence, the interviewee highlighted that the realities of the business need to be considered. The interviewee expressed concern over the sheer feasibility of manually responding to all queries accurately and in an acceptable time frame. The labour-intensive nature of human involvement might not be a scalable procedure for a growing company such as the one in question. In addition, market trends of real time responses further fuelled the interest in chatbot technologies.

Despite technological advances, the human element was identified as still being a crucial aspect of the product positioning of hotels. Guests also expressed a preference for interacting with a human counterpart given the choice. The results of this study are similar to those reported by Ivanov and Webster (2017) and Nam et al (2021) whereby guests, particularly those of highend hotels, have higher expectations of service and demand personal attention. This desire is expressed via a preference for legacy methods of communication. This notion was further echoed by hotel management who declared that the guest experience was to be prioritised above all else. This represents a challenge for the future adoption of chatbots in similarly styled hotels. Several perceptions of automated technology emerged from both hotel management and the guest, which, whilst acknowledging the potential of automated customer service in cooperation with a human counterpart, also identified a need for improvement of the technology as well as further research into the field. Despite these setbacks, both the literature (Cancel and Gerhardt, 2019 ; Ivakhnenko, 2021) and the interviewee stated that a compromise between automation and human input could be an ideal situation. This would allow for mundane and basic tasks to be handled expeditiously, whilst allowing a person more time to handle individual cases that require their attention.

Smart phones innovations have facilitated the popularity and growth of web 2.0 platforms such as social media. Businesses have been quick to adapt and take advantage of these new platforms, both for promotional and communication purposes. However, the next iteration of the internet will feature new technologies which will increasingly be more focused on Artificial Intelligence and automation. The results from the study have shown that although certain platforms may have performed favourably in the past, the dynamic nature of the market (fuelled by technological innovation) is giving rise to new trends which must be adapted to. Specifically, up and coming technologies can leverage the power of their predecessors. An opportunity exists for hotels to integrate Artificial Intelligence via third party applications across social media platforms in order to improve service quality standards. This improvement in quality could lead to increased sales, particularly direct reservations which many hotels of the type under review have been losing out to Online Travel Agents (OTAs). Furthermore, cost savings can be made as the operation becomes less labour intensive and employee morale could improve due to the reduced workload.

This thesis has explored factors affecting the adoption of automated customer service technology and its effects on service quality. The research conducted has shown that despite the shortcomings, such technology has the potential in providing a competitive advantage. Despite this, there is a lack of research on chatbot technology in Malta, especially within the hospitality sector. Future research could explore whether the conclusions reached in this study are replicable.

Keywords: artificial intelligence, chatbots, service quality, hotels, customer service

References

Cancel, D. and Gerhardt, D. (2019) Conversational Marketing: How the World’s Fastest Growing Companies Use chatbots to generate leads 247/365.

Ivakhnenko, M. (2021) Hotel Chatbot: The Top 4 Use Cases for Chatbots in Hospitality. Available at: https://hoteltechreport.com/ news/hotel-chatbots (Accessed: 1 August 2022).

Ivanov, S. and Webster, C. (2017) ‘Adoption of Robots, Artificial Intelligence and Service Automation’, International Scientific Conference “Contemporary tourism – traditions and innovations”, 19- 21 October 2017, Sofia University., pp. 1–9.