As much as Airbnb has emerged widely around the world as an alternative form of accommodation, hotels still retain a sizeable portion of the tourism industry pie.
For tourists who choose to stay in hotels, the experience of having to pick up the phone, call the front desk, then having to potentially deal with miscommunication or a busy line may prove familiar.
Singapore-based ButlerTech Group, which was set up a year ago with over US$1.2 million in seed funding, seeks to change that experience and make hospitality more accessible to the tourist.
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“ButlerPad is a [mobile] application for hotels as an alternative means of communication for guests. They (the guests) can use their smartphones or tablets to place orders, request room service or housekeeping, and book a restaurant or spa within the hotel,” says Mike Mazza, the Founder and CEO of ButlerTech Group.
Having first tested the app with Thailand’s Dusit Thani Group, which owns a chain of hotels and resorts, Mazza reports that over 250 hotels in Singapore, Thailand, the United Kingdom and Australia, have since adopted it.
“We built the application over a 12-month period with them (Dusit Thani Group) to make sure it did everything a hotel would want,” says Mazza, who is confident that the use of virtual concierges such as ButlerPad will take off in hotels, just as Wi-Fi did in the 2000s.
The only obstacle currently to swiftly launching the service for a new hotel client is the availability of content.
“Many hotels don’t have the information that they need to present within the application at the moment. Room service menus are text heavy, so they need to get images. The length of time to get a hotel live is basically dictated by a hotel getting the information,” says Mazza.
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The next Wi-Fi
Having been involved in Internet business and technology since the mid-1990s, Mazza observed the penetration of Wi-Fi technology into hotels and sees virtual concierges following a similar trajectory.
“Everyone (the hotels) knew they had to have it (Wi-Fi connectivity) but they couldn’t afford it. Then the telcos came in and said, ‘We’ll give you the hardware for free,’ and it went global within five years, and people are tipping this to be the next Wi-Fi,” says Mazza.
One trend that bolsters Mazza’s confidence of ButlerTech’s success is figures that show the increasing access to smartphones. According to ButlerTech, there are currently 1.91 billion smartphone users worldwide, a figure set to grow to nearly 2.16 billion in 2016.
“There’s been a huge increase in smartphones usage year-on-year. It’s inevitable that people are going to want to use those devices to communicate with the hotel rather than pick up a phone, deal with language barriers and engaged tones. I think it’s going to become the norm in hospitality,” says Mazza.
While ButlerPad caters to the intra-hotel needs of hotel guests, it also has an add-on function that serves the tourist’s needs outside of the hotel, within the larger locality.
The CityButler, a localised city guide, curates a list of merchants and services for tourists.
“I used to go to a hotel and step outside and think, ‘Where shall I go?’ Jumping on to Google maps, keying in restaurants, there’ll be a million options that come up and I think, ‘Which is right for me?” says Mazza.
“The Internet’s great for information but, sometimes, it’s information overload. We don’t want to be part of the problem, we want to be part of the solution – by providing recommendations, a shortlist of the top three if you’d like, and an independent review by us as well.”
In curation, there is a degree of quality that ButlerTech promises its users – both hotels and their guests.
“Every single merchant and partner of ours [whom CityButler recommends], we’ve actually been to see and assess, and that’s protecting the brands (the hotels) that we’re working with. It also protects the guests to make sure they’re not being sent to people who might rip them off,” says Mazza.
Recommendations are made with the input of knowledge and an ability to discriminate that technology cannot always be relied upon to do so. To do this, ButlerTech employs locals who are able to connect with merchants, services, and businesses on the ground.
“We have a team of local people who will look online at all the local businesses, check out the reviews, shortlist them and then we’ll arrange meetings to go visit them. If we feel they are the right partners to work with, we’ll agree a contract with them,” says Mazza, who proceeds to explain the financial model of such an arrangement.
“We charge them a fee for every booking that we give them. So, for smaller businesses or businesses in a local area, we’ve opened up a new advertising medium to allow them to advertise to hotel guests, something which they’ve never been able to do before.”
A part of the revenue that ButlerTech earns from the booking fees is shared with the hotels for providing the pool of customers.
Besides a cut of the revenue, what hotels can gain from this partnership through the CityButler function, according to Mazza, is a greater understanding of their clientele. Through the bookings and user behaviour displayed on the app, hotels can learn about the habits and nature of their guests.
“If they (the hotel guests) book a golf tee time, then we know they’re golfers. And if you can understand the guests better, you can personalise the promotions, offers, and information you want your guests to receive,” says Mazza.
App platforms and tech
Besides being downloadable as an app on the Windows, iOS, and Android platforms, the ButlerPad app also runs on HTML5, a revision of the standard programming language for describing the contents and appearance of web pages and which negates the need to download the app.
“We see HTML5 as the big driver for apps in the future because it’s very easy for people to see the value [of an app] before they have to make that transition of actually going into an app store to download something. The other thing is, when they connect to Wi-Fi, they automatically get redirected through to our [HTML5 version of the] application,” says Mazza.
Additionally, with partner hotels actively promoting the app, Mazza says traditional metrics for measuring an app’s performance, such as user acquisition and active user rates, do not apply as strictly.
“On arrival, the guest will receive a key card with information about the application. Once you’re connected to Wi-Fi, you’re transferred through [to the app]. Pre-arrival, you get an email with a link to the app. Some hotels send specific email about the application with images and about features to personalize your stay, book transportation, or buying a SIM card. These are services that we’re providing on behalf of our hotel partners,” says Mazza.
Having been in the dot-com business since 1995, when he built a directory for real estate, Mazza says that his experience has taught him the importance of timing for businesses.
Recounting his real estate venture, Mazza says, “I talked to state agents [in the UK] about promoting properties on our website. They didn’t know what the Internet and the email were. ‘Well, we use fax,’ that’s what they said.”
The current iteration of CityButler is actually a revival of an idea that Mazza tried to implement in the 2000s when Wi-Fi was making its way into hotels.
“I used to think that if you can be the first to market with a product, you’ll be successful. It’s not actually the case unless you’ve got huge amounts of funding,” says Mazza. “I realised that, rather than build the bridge, let somebody else build the bridge, but drive over it with a faster car and that is my analogy of how I see myself today. I’m more of a disruptor than an innovator or at least I try to be.”
With Wi-Fi commonly found in hotels these days and with the high usage of smartphones in the world, Mazza feels the bridge is ready.
“I think it’s really good timing because the market’s established and the industry’s talking about and wanting it. The barrier is cost and we’ve removed it,” says Mazza, who sees no likely competition from the field too.
“[It] is extremely difficult [to compete with ButlerTech] because of the fact that we’ve met every single business in person and no hotel will touch you unless you do the same because it is really important that you protect their brand,” says Mazza.
With the business slated to break even this month, says Mazza, ButlerTech is looking to raise a Series A round of funding to aid in their expansion globally.
The next product in the pipeline is a mobile wallet.
“ButlerPay […] is going to expand the earning potential that we have because we can take commissions from shopping purchases as well as all the other bookings that they (the guests) are doing,” says Mazza.
While being profitable is important for a business, ButlerTech would do well to remember what it serves, which is, as Mazza says, “People want not just the travel guide that quotes the usual places. They want to go off track a little bit and the CityButler is part of the solution. We’ll keep making the CityButler better, keeping the content rich and fresh.”