The AI Chatbot: The City Concierge to Connect Places with People

Since Umni won the global Startup competition of the United Nations World Tourism Organization (UNWTO) in the category Innovation & Digitalization for Island Destinations (March’23) with its Island AI Concierge – a smart digital assistant for an entire destination, many people asked if this was just an idea and if the time is right for its implementation. Umni has done it once, for the tourists of Plovdiv city (Bulgaria), as the European Capital of Culture 2019, and many other cities had done it too, so technically the destination AI chatbot is not only doable but already a digital instrument used in many smart cities and destinations with smart tourism programs. Let’s dive into this topic to learn more about how an AI chatbot can enhance the guest experience as a Destination Concierge!

Today’s travelers are knowledgeable, experienced, and cost-conscious. These savvy holidaymakers are increasingly discerning, thus requiring an engaging experience. How to provide such an experience? Through technologies! As technologies continue to advance, AI chatbot technology evolves even more, especially in some areas where AI chatbots have shown great potential – in the hospitality industry, particularly in the role of an AI city concierge.

A City Concierge is typically responsible for providing guests with information about a local area, city, village, island, etc., such as popular tourist attractions, restaurants, entertainment options, or other facilities and local services. When a visitor comes, it is a human being in the first place, then a guest or tourist, therefore the information provided shall cover more topics than you would think at first, such as hospitals, 24/7 pharmacies, embassies and consulates, weather prognoses, currency exchange rate and where currency could be exchanges, business services, even pet services for those traveling with their furry best friends. By leveraging the power of AI chatbots, a City Concierge can provide tourists with instant access to this information, making their holiday and stay more convenient and enjoyable, also allowing them to be spontaneous in their exploration and experience the destination like a local by accessing information about the local hidden gems. Connecting places with visitors is easier than ever before. Technology providers like Umni are transforming how cities and destinations interact with inhabitants and visitors, enabling their smart destination strategies to be realized with an AI-powered Virtual Assistant – the City Concierge. This connects visitors to local businesses, people, culture, history, and the advanced digital infrastructure.

Smart Tourism and Smart Cities

Smart tourism is using the same concept of the smart city – using technologies to create a better city experience and better quality of life, but for the temporary citizens – the city visitors. Such digitalization projects  – at full scale or a pilot, like the AI City Concierge in the form of an AI chatbot, had been being created for places, municipalities, cities (in general, destinations) that have established tourism industry and high competitiveness or would like to develop in this direction.

Even before the pandemic, travelers were digital-first in their behavior while cities have been spending millions of dollars annually for supporting tourism offices, special tourism signages, and other physical information attributes and to print and distribute tons of various collaterals in order to meet the needs of the travelers. After the pandemic, tourists prefer even more digital solutions. In October’20, in a survey by Amadeus, 84% of travelers said implementation of technology is crucial for their decision if, where, when, and how to travel. That creates an additional challenge for them: the destination information is spread online on countless websites, platforms, and apps, that may not provide up-to-date and accurate information. The last serve the interests of the tourism players behind, but not necessarily the interest and the needs of the city/destination community. This reflects on the travelers’ experience, local business, and the destination’s image and competitiveness. That’s why digital solutions are urgently needed to remodel the experience in different destinations and now more and more cities and destinations depending on tourism are starting to change their strategies to attract more tourists with innovative solutions such as city concierges or others.

The city chatbot is a solution at the crossroad of 3 fast developing and strongly connected to each other industries: international tourism and travel, smart city/smart tourism, and AI virtual assistants; and one major digital behavior trend: chatting as a primary choice of digital communication. There is no precise description of what a smart city is, however, the importance falls on using technologies for the improvement of the citizens’ life through digitization of the authorities (e-government) and the public services, connecting the data distributors, the city IoT infrastructure (traffic, transportation, air quality, parking, waste, etc.), businesses and other services. Other featured issues are overcoming the problems of access to culture and historical heritage, attracting new audiences using digital technology, and developing of new distribution channels. An important element of the smart city’s big picture are the digital citizens – those who live and work in the city, and the temporary one – the visitors. As all developments under smart city fall into the principle of “for the people by the people”,  the question is how the digital citizens will communicate with the smart city complex digital infrastructure. Umni’s response to this question is: through the AI City Concierge that would connect all players in the digital ecosystem with the citizens and visitors through a simple-to-use channel for communication to help cities/destinations to make people a real part of local life.

The European Capital of Smart Tourism recognizes outstanding achievements in smart tourism in European cities in 2023 with Pafos (Cyprus) and Seville (Spain) selected as the winners of the 2023 European Capital of Smart Tourism, following a European Jury meeting in Brussels in November 2022. Aarhus (Denmark), Gijon (Spain), Porto (Portugal), San Sebastian (Spain), and Zagreb (Croatia) were the shortlisted smart cities, too. But how they became smart cities? Through using technologies and be digitalized to improve the citizens’ life (through smart applications, new software, artificial intelligence, or other ways).

Like many other countries, Bulgaria also has the potential for a successful test market for City Concierge and its development. As a country Bulgaria heavily rely on domestic and international travel and tourism which is a traditional industry. Tourism as a priority sector in Bulgaria is expected to grow in the next years after the low numbers during and right after the pandemic. “Bulgaria will host the 68th session of the World Tourism Organization Regional Commission for Europe, which opens at the end of May’23. This shows Bulgaria’s ambition to take a leading role in tourism processes, as well as to significantly raise the awareness of its international partners about its vision in defining regional and global policies in this key sector for the world economy. This is also a great opportunity to present the Bulgarian tourism product to an extremely wide and professionally oriented audience, including ministers, government officials, business representatives, academics, etc, and for Bulgaria to contribute to shaping the modern construction and ecosystem of tourism at a time when it is intensively changing and developing.” – Ministry of Tourism of Bulgaria.  Many projects for improving sightseeing and tourist attractions are ongoing which shows action in increasing interest in the tourism industry in our country. Smart Cities and Smart Tourism are not foreign subjects to the local government, organizations, and businesses. Sofia participated in 2-years program Digital Cities Challenge (2017-2019), an initiative of the EU, which resulted in the release of a Strategy for Digital Transformation of Sofia in July 2019 (published in August 2019), and Plovdiv becoming the European Capital of Culture’19 had its own Plovdiv City Concierge (a project by Umni), for its tourists and more is yet to come.

The AI City Concierge is a digital tool for connecting people with a city or destination and a necessity for it to become smart. Smart city connectivity is a huge topic, so we are only going to emphasize the role of such AI Concierge – Umni project that won the UNWTO Startup Competition for Digital Solutions for Island Destinations in the category ”Innovation and Digitalization for Island Destinations”. The final was on the sidelines of UNWTO’s conference in Las Palmas, Tourism Tech Adventures – Canarias 2023. The conference itself was part of a 2-day event dedicated to the digitalization of the Canary Islands, DigiON Canarias. What set it apart? The Island Tourism AI Concierge (AI chatbot) would be supported by a local team on the Umni platform with no technical knowledge and special skills and will help create personalized experiences for tourists that support local culture, traditions, and local businesses, thus creating new opportunities for local community development. Such huge recognition on a global scale!

By developing and implementing a destination AI chatbot (or Island AI Concierge) that is maintained by a local team on the Umni platform and includes information about local businesses (accommodations, tours, restaurants, shopping, services, etc.), sightseeing spots, and others, the local information will be easily kept up-to-date, easily available to potential customers online providing a truly personalized experience in innovative and attractive conversational way, bookings and inquiries for local services will be fast and easy to do. The destination AI chatbot is one of the tools for implementing a Smart tourism strategy and will make the destination competitive with other destinations and attractive to tourists. The project will create jobs for a few people – the local team that will work on it, maintain and develop it, could be self-sustained financially by creating advertising and sponsorship opportunities within the AI chatbot.

Easy access to updated information online, in one place, and in a personalized manner about the local businesses and experiences would help visitors optimize their stay not missing important experiences, also highlighting various businesses, and helping them get better exposure, which means more sales. By improving tourists’ experience, the AI chatbot will result in loyalty, good word-of-mouth, repeat business, increasing spending per tourist both pre-arrival and on spot, at the same time supporting local businesses through information, extending their hours of sales and customer support to 24/7 (helping with lack of employees and budget), increasing their customer access capabilities. The software solution allows tracking visitor behavior and preferences, monitoring customer feedback, and identifying areas for improvement. This information can be used to improve the visitor experience, optimize business operations, and make data-driven decisions that support the growth and sustainability of the local economy. KPIs of the destination AI chatbot could be the total number of users, number of repeat users, number of inquiries/sales through the chatbot per business, nighttime usage, number of questions answered, and others. The immediate impact on the environment also needs to be considered by digitalizing the tourists’ and businesses’ information to go paperless and save trees. It is measured by savings for collateral printing on destination and individual business levels.

One more step or hundred ones ahead of Umni becoming an expert in helping cities or destinations in general become smart and more digitalized to meet citizens’ and more concrete visitors’ digital demands.

Trends and Development

Major technological, economic, and environmental changes have generated interest in smart cities in the past 15 years. The European Union (EU) has devoted constant efforts to creating a strategy for achieving ‘smart’ urban growth for its metropolitan city regions. The EU has developed a range of programs under ‘Europe’s Digital Agenda”. In 2010, it highlighted the focus on strengthening innovation and investment in ICT (Information and Communication Technology) services for the purpose of improving public services and quality of life. According to Markets and Markets, the global smart cities market in terms of revenue was estimated to be worth $511.6 billion in 2022 and is poised to reach $1024.4 billion in 2027, growing at a CAGR of 14.9% from 2022 to 2027. According to Allied Market Research, the global smart cities market is projected to reach $6,061.00 billion by 2030, growing at a CAGR of 25.2% from 2021 to 2030. The growing mobile subscriber base, broadband penetration, and the adoption of advanced technologies (AI, including AI chatbots) across businesses drive the market. Europe has 240 cities with smart city programs in various stages of execution. Today, 55% of the population worldwide lives in cities, towns, and suburbs while on average on Earth, 68% of the population will live in cities by 2050. Urbanization worldwide keeps increasing and together with its problems coming, which are targeted by the smart city programs. The SCI (Smart City Index) ranks 118 cities in 2021 based on their citizens’ perceptions of how technology can improve their lives, as well as on economic and social data taken from the UN Human Development Index (HDI). The IESE Business School’s Center for Globalization and Strategy look at 174 cities around the world in 2023 and analyzed them across nine metrics: human capital, social cohesion, economy, environment, governance, urban planning, international, outreach technology, and mobility. According to the IESE Cities in Motion Index, the ten smartest cities in the world are New York City, London, Paris, Tokyo, Reykjavik, Singapore, Seoul, and Toronto. Hong Kong and Amsterdam. 2023 will bring additional federal funding to improve transportation and further momentum around trends like electric bike and car adoption, office-to-housing conversions, and more, and yet in the upcoming years, the smart cities market would grow for sure.

As the smart city programs will be executed gradually within the next 5-10 years, many cities that are also tourist destinations concentrated on what is possible already today, which is smart tourism – using technology for improving the tourist experience while visiting the city/destination. Connectivity is the essence of smart tourism programs: experiencing a destination, city, or place through digital connectivity with the local business, people, history, culture, and digital infrastructure.

After a stronger than expected recovery in 2022, this year could see international tourist arrivals return to pre-pandemic levels in Europe and the Middle East. Based on UNWTO’s forward-looking scenarios for 2023, international tourist arrivals could reach 80% to 95% of pre-pandemic levels this year, depending on the extent of the economic slowdown, the ongoing recovery of travel in Asia and the Pacific and the evolution of the Russian offensive in Ukraine, among other factors. Global tourist arrivals are expected to reach nearly 2.75 billion by 2026, according to a recent study. This is up from 2.5 billion in 2021 and reflects an average growth rate of 1.5% per year. The tourism industry is healing and travelers are increasing worldwide which arises the need of using technologies to stay competitive and smart and digital ways to attract visitors because of their preferences. An AI City Concierge is an effective way to help make these visitors comfortable with their stay and learn everything important for their holiday at a certain place, about the surrounding, services, and sightseeing.

The AI City Concierge

The destination AI chatbot is not a new concept. 20% of the cities and destinations with smart tourism and smart city programs already use AI chatbots and it is expected this number to increase. They are part of the global AI chatbot market that is expected to increase 6 times by 2030. The AI city chatbot as a software solution meets the requirements of the initiative of the EU, European Capital of Smart Tourism for Sustainability, Accessibility, Digitization and Cultural Heritage and Creativity, by:

• Information is digitally accessible to any travelers and visitors
• An innovative ecological solution in assistance to travelers and the local business engages the local society through information about local events and activities
• Improves all aspects of the traveler’s experience through various information in the bot that can be delivered through text, pictures, video, audio, web VR and AR – about services, places, events, etc.
• Connects with the cultural and historical heritage and the local creativity through promoting and informing.

There are over 30 cities in the world spread over the continents with city chatbots in use – servicing both citizens and/or visitors, with the most known ones of Vienna, Prague, Tokyo, Buenos Ayres, Singapore, Brisbane, Ottawa, Roeselare (Belgium), Williamsburg (The USA), Kawasaki City & Kakegawa City (Japan),  Wrocław (Poland), Atlanta (The USA) and many others.

Billions of messages are exchanged on a monthly basis between companies and customers, changing the customers’ digital habits to search for information about anything they need to know, buy, see or experience online on their phones and their expectations to receive the information immediately. It is not possible for businesses and organizations to keep on this communication paste by adding more human power. Tasks automation, business digitization, and therefore customer communication automation is becoming a major business trend and part of the business development strategy.

A major tool for automation of business communication since 2015 became chatbot technology – a technology that has been around and used since 1966. 1.4 billion people are using chatbots, and the top 5 chatbot-using countries are the United States, India, Germany, the United Kingdom, and Brazil. By 2027, chatbots will become the primary customer service channel for roughly a quarter of organizations. By 2024, Insider Intelligence predicts that global consumer retail spending via chatbots will reach $142 billion-up from $2.8 billion in 2019. What huge numbers! Why not include chatbots in our everyday lives? That’s why AI City Concierges are created to ease citizens’ and especially visitors’ lives. A smart digital assistant as a City Concierge is already a part of the Smart Tourism Strategy of many destinations and cities. In 2019, Umni created the 1st in Bulgaria pilot project for a city tourism AI chatbot – the Plovdiv City Concierge, for the tourists of Plovdiv city as the European Capital of Culture’19, with over 400 businesses, services, sightseeing spots, shopping, and other points of interests included in the AI chatbot database. Now, Umni as we mentioned above is #1 in the UNWTO startup competition for Digital Solutions for Island Destinations so to provide places like islands or others with a platform to create an AI City Concierge to connect the places with their visitors easier and faster, without technical knowledge and skills.

Customers’ Digital Behavior: Digital First, Chatting First

Today’s travelers are increasingly impulsive and want information quickly. People don’t just want faster access to important information—they want better, more personalized user experiences. AI chatbot technology is chosen by many worldwide and companies that provide such ways of communication are considered to be tech-savvy (87.62%), customer-oriented (83.81%), and proactive (85.71%), according to research by GoodFirms (Usage & Statistics for an Engaging Online Chatbot Design).

Global urbanization, traveling, and digitization are on the rise bringing problems that need innovative digital solutions involving AI and other new technologies. The answer to these issues is the smart city and smart tourism programs that are in various execution stages and we will see more and more smart cities appearing on the map of the glove within the next years. The goal is to provide better public services to the citizens while also increasing the quality of life in the cities and the surrounding regions. Transforming and digitizing the cities for the people, there will be new digital infrastructure containing IoT, e-services, and data providers – all of them in need to provide citizens and visitors with real-life up-to-date information on demand. The AI City Concierge will connect all participants in the digital infrastructure with the citizens and visitors through a simple-to-use channel for communication to help cities to make people a real part of the smart city or other places to live.

Umni platform allows Umni clients to receive real-live information about customer behavior in their AI chatbots, regardless they are a business or a smart city or other, offering such statistics as:

–           User Behavior

–           Number of messages and time spent

–           User languages

–           Usage timeframe

–           Segmented click and messages statistics

–           Entry sources

All these insights and many other helps places and businesses know their chatbot users better, recognize trends, and improve their services for further development. The AI City Concierge is an AI chatbot made on the Umni platform backed up by a conversational AI with a database containing information about a city, businesses, services, places, and helpful information, maintained through a user-friendly dashboard that doesn’t require any technical skills just common computer literacy. In addition to the information, the chatbot could provide real-life information about events, weather, air quality, currency exchange, and other helpful information and tips. The AI City Concierge is connected to an information database, which provides various data for better statistical analyses and improving marketing.

The majority of global travelers like to do a significant amount of pre-trip research to ensure they have a great stay. Nearly 80% agree that when they plan, they find out as much as possible about a destination before they go, but 62% also profess a desire to be more spontaneous. 59% of global travelers say they want to plan more in advance but find it difficult to know what to do locally, and 78% are interested in tips from brands about “non-tourist” activities. 70% search for local information, tips, and to-do but just 20% find this information when they need it. According to a report from Hitwise before the pandemic, nearly 60 percent of all online searches were carried out on a mobile device. Last but not least, 88% of travelers would like to have all the information they need in one app. This could be the destination AI Concierge to assist with information 24/7, to assist in having unique local experiences to be the first step of making a city or a place smart.

In the tourism sector, examples of digitalization processes include the digitalization of daily operations, such as linked calendars and email systems, the use of big data to tailor products to a customer’s needs, website optimization and campaigns based on data insights, mobile connectivity, online sales, and the application of new technologies like AI (chatbots) and VR (virtual reality). These digitalization processes help optimize digital processes, improve user experience, and to become a smarter city or place than it was. The usage of City Concierges to connect places with their visitors is not the future, it has already begun!