According to The Guild of Professional English Butlers, The Lanesbourough in London was the first hotel in Europe to introduce butler service to all its guests in 1990.
While hotels have many staff to help with your stay - Housekeeping clean your room, the Concierge can arrange taxis and tickets, etc - hotel butlers are all about offering that extra special personal touch that other departments are unable to provide. They get to know the guests (favourite food and drink, timing, etc) and can then tailor their services to assist. A hotel butler should be a single point of contact for guests to access all hotel services and beyond. Certainly a dedicated member of staff so you know their face is much better than a pool of butlers during your stay.
Butlers can unpack for you and pack at the end of your stay too so you don't waste your precious time on these matters. They know the location well so can advise on restaurant bookings and local hidden gems. They can perform some secretarial duties and can arrange business meetings or sending documents across town.
If you have your partner joining you they can run a bath and set up a romantic evening in the suite with appropriate lighting, drinks and in-room dining.
The butler restocks the mini-bar with your preferred tipple and can even come to mix your drinks, if needed. If you plan to host a party in your suite, the butler can provide the in-room catering.
Some butlers also travel off-site with guests to escort them on shopping trips or even to play a round of golf.
Most importantly, a hotel butler's job is to anticipate guests' needs and to fulfil all guest requests with apparent ease. They should have the ability to personalise service based on an ever-accumulating database of guest preferences (a long-standing butler tool).
While some say a hotel butler is a combination of Room Service and Concierge they should be offering a much more personal service, for example, remembering tasks done before so you do not need to ask again.
A hotel with a butler is clearly offering a superior service and in a world where five star is not enough anymore for many guests, the hotel industry has to offer more. Sceptics may feel a butler just sounds good on the list of hotel amenities but it seems that luxury travellers are getting used to the idea and not only expect a butler to be available but also know how to make use of one.