How Mahindra Holidays is using chatbots to boost customer loyalty

For the last six months, Mahindra Holidays & Resorts India Ltd (MHRIL) has been using a chatbot on its mobile app to better understand its customers’ needs. The artificial intelligence-powered chatbot has helped the Mumbai-based vacation ownership company to significantly improve its net promoter score, or NPS, a metric used to measure customer loyalty.  

“Our members generally ask common questions. About six months ago, we launched an AI-powered chatbot to see how member queries can be better serviced. These tools are currently being tested and scaled up,” Kavinder Singh, managing director and chief executive officer at Mahindra Holidays told TechCircle in an interview.

“We have seen an improvement in the net promoter score (since the launch of the chatbot),” he added.

Mahindra Holidays is a part of the diversified Mahindra Group and runs hotels and resorts under the Club Mahindra brand. The company offers family holidays, primarily through vacation ownership memberships.

According to the company’s 22nd Annual report 2017-18, almost 18,225 new members were added to its vacation ownership business, taking the total membership to over 2.35 lakh by the end of the year. It operates in more than 50 resorts across India and abroad, according to the company’s website. Holiday Club Resorts Oy, its Finnish subsidiary and a vacation ownership company in Europe, has more than 50,000 members and 32 resorts across Finland, Sweden and Spain.

The company’s operating revenue stood at Rs 1,064.19 crore in 2017-18, up a tad from Rs 1,073.18 crore in 2016-17. The company’s profit after tax for 2017-18 increased to Rs 134.36 crore from Rs 130.65 crore in the previous financial year.

The group currently employs over 200,000 employees in 100 countries across the globe.

Based on the queries and feedback received through the chatbot, the company has also rolled out a pre-purchase service that members can avail of before going on a holiday. As a result, along with the NPS, the company has also seen an uptick in revenues, Singh said.

The company, which competes with Chennai-based Sterling Holiday Resorts, now owned by Fairfax-controlled Thomas Cook, is also using AI in performance marketing, which in turn has increased its sales. It generates leads digitally via search engine optimisation and social media platforms such as Facebook.

Singh, who has been at the helm of Mahindra Holidays for more than four years, believes that platform business models will scale faster in the travel and tourism sector. Therefore, consumer-facing products and services that harness emerging technologies are critical for the company to maintain its leadership for long-term customers. The chatbot is just one application that the company is leveraging to meet that end.

“The mobile app, through which our members not only transact but also place service requests, looks very simple but at the back end, it integrates multiple departments to serve varying customer requirements,” he said.

According to a report from technology research firm Gartner earlier this year, chatbots will become the dominant customer service and support tool across consumer-facing industries by 2020. Not surprisingly, the adoption has been highest in the financial services sector. In India, leading banks such as HDFC Bank and Federal Bank have been working with AI startups to roll out chatbots.

In March last year, Mahindra & Mahindra Ltd, the Mahindra Group’s flagship company, sold a tenth of its stake in Mahindra Holidays, for Rs 274.3 crore ($41 million).

The company was earlier backed by private equity firm Jacob Ballas and is the third-most valued hospitality firm behind Indian Hotels (Taj Hotels) and EIH (Oberoi).