From Data to Dollars

Hoteliers lay the foundations for database marketing programs that turn bytes into business.

By Joan Marsan, Technology Editor -- HOTELS Magazine, 3/1/2000

Every interaction a hotel has with a client or potential guest, from a single hit on a Web site to hosting a wedding, if properly recorded in a customer information system, is an opportunity to further build customer relationships and increase future revenues. The biggest shift in the use of customer information systems in recent years has been the move from straight-forward database marketing to customer relationship management. Up to now, many major chains have followed a model of introducing frequency programs and sending mass-marketing pieces to all participants. “That’s where they put their resources,” says Cindy Estis Green, senior vice president, Pegasus Business Intelligence. “But now they want to get information on all their customers, getting profiles even when guests don’t sign up for a program.”

This new practice is as powerful for small independents as it is for monolithic chains. Properties determined to focus on undivided attention for individual guests or potential customers now store the data they collect, analyze the information, and use the knowledge they gain to attract repeat business and add new clientele.

Special Attention, Stunning Returns

Rosewood Hotels & Resorts boasts an impressive repeat visit rate, with return guests accounting for 60% of Rosewood’s clientele. More than 50% of those who marry or honeymoon at Rosewood properties return within five years for special occasions or vacations. “The staff at all our hotels are dedicated to attending to the minutest of details,” says Jim Brown, president and COO. “That so many couples return and explore other properties is a testament to their faith in our ability to intuitively deliver on their every need.”

But Rosewood’s outstanding service doesn’t result as much from intuition as it does from careful record-keeping. “At the hotel level, we keep detailed accounts of each guest,” says Arthur Berg, vice president, sales. Before a guest arrives, the hotel will send a questionnaire requesting information on preferences. These include whether a visitor would rather a feather or hypo-allergenic pillow, if they would like Scotch, beer or non-alcoholic beverages in their minibar, any special dietary requests, and if they would appreciate a backboard on their bed. “As a rule, most guests send back the questionnaire,” Berg says. “And they’re completely impressed. For the most part, no one has asked them these kinds of questions in advance.”

The information collected is entered into the property’s PMS system. Throughout the guest’s stay, as hotel employees become aware of guest habits, these items are also added to the system. If a client requires pressing services the day of arrival, the front desk will note the request and offer the services automatically on the guest’s subsequent visits. A Rosewood guest need only ask once that tomatoes be left off of an entrée. Kitchen staff will record a customer’s distaste for certain foods and assure that the offensive items remain far from his or her plate.

Tools Of The Trade

A highly effective staff intent on offering customers the best service imaginable makes possible Rosewood’s reputation among its guests as a vacation worth revisiting. But technology offers the tools that enable the staff to serve above and beyond the call of duty. Without a sophisticated data management system, Rosewood properties would be unable to store, and therefore act on, such voluminous customer information.

Rosewood properties store the bulk of their guests’ preferences in the individual property management system (PMS). This allows on-site staff direct access to guest records. However, the system limits Rosewood’s ability to do cross-property marketing. And so, Berg says, the company is investigating options that will allow them to consolidate information from every Rosewood property. He and a corps of representatives from every facet of hotel operations, including rooms, marketing and sales, and technology, are working together to select a database management system that will expand Rosewood’s marketing capabilities.

To aid in this effort, Rosewood hotels are switching to a MICROS PMS that allows extensive, standardized capture of detailed information.

Consistency throughout the chain will allow an easier integration of data when the corporate office selects a sophisticated, centralized data warehousing system. “The move to Fidelio has been a corporate initiative,” says Berg, specifying that the MICROS system has become the “system of choice.” But the shift to the new system comes only when a hotel requires a system replacement or upgrade. Consistency should not come at the expense of the individual hotel, Berg says.

Keeping In Touch

In the meantime, Rosewood properties market themselves by using the data-warehousing and reporting capabilities of their PMSs. Five years ago, the little Dix Bay property, Virgin Gorda, British Virgin Islands, began sending letters about upcoming promotions to any guest who had visited within the past two to four years. Guests remarked how wonderful it was to get news about the destination, so Rosewood expanded the marketing effort to all of its hotels. Now every Rosewood property distributes letters from managing directors to recent visitors.

Las Ventanas Al Paraiso, Los Cabos, Mexico, opened in 1997, and already has seen guests return eight or nine times. The resort enjoys an 80% return rate from guests who celebrate special occasions at Las Ventanas. Leila Thorne, director of sales and marketing, produces the standard Rosewood quarterly letters, but she doesn’t focus on promotions. She analyzed information gathered in the customer data and determined the sophisticated guests at Las Ventanas aren’t simply looking for a deal, they’re looking for an experience. Her letters educate readers about the unique cultural and environmental opportunities guests can enjoy on a return trip to Las Ventanas.

Crescent Court, Dallas, mailings aren’t limited to quarterly, across-the-board letters, though certainly those are part of the property’s marketing program. Additionally, Tracy White, marketing director, culls the database, selects individuals who have taken advantage of special packages in the past, and directs mailings about similar promotions to these once and future guests. The database allows White to search for guests based on various criteria: how many times they have visited, the frame within which they last visited, whether they came for a special occasion. She then targets mailing based on these criteria, producing about 15 offers per year. The property is moving towards producing more targeted pieces, says Rebecca Swartz, communications manager, a shift that in-house data marketing has made manageable and cost-effective.

Preferred Customers

Like Rosewood, Preferred Hotels & Resorts Worldwide are aiming to synchronize PMSs and standardize data capture. Because systems standardization across multiple properties is a long-term process, Adrian Bell, director of image marketing, and Lisa Racioppo, senior manager, customer relationships, devote special attention and a dedicated database to acquiring quality new guests. A thorough data analysis of the hotel group’s clientele helped Preferred identify other luxury goods purveyors whose customers would be attracted to Preferred properties. Preferred then partnered with these companies, developing programs to cultivate relationships with their clientele.

Preferred identified an outstanding partner in the upscale retailer Nieman Marcus. Nieman Marcus offers a membership rewards program, InCircle, to its best customers, those who spend at least US$3,000 per year on their store charge cards. InCircle members receive points for each dollar they spend, redeemable for exclusive benefits with InCircle partners such as Preferred. Of the 160,000 members, 1,600 spend more than US$100,000 at the store each year. These high-spend shoppers with a propensity toward luxury goods are ideal guests for Preferred, the program’s only hotel partner, contributing US$100,000 in incremental room nights revenue and US$60,000 in incremental incidentals revenue in 1999, the first year of the partnership.

In addition to contributing dollars to the bottom line, Preferred’s partnership-acquisition clientele provide the company with valuable information. They opt in to Preferred’s marketing strategy, volunteering information about their interests in exchange for special privileges. This information helps Preferred identify other potential partners with equally attractive clientele. Through its attentiveness to guest habits and desires and its awareness that only through using technology to attract and track guests—both current and future—Preferred has developed partnerships that produce profits.

Marketing For Better Business

Once a hotel group has a system-wide warehouse of data gathered from guests both when they stay at a property and when they respond to marketing efforts, a sophisticated analysis of customer information becomes possible. The 21-property Destination Hotels & Resorts group captures data from the guest folios of several PMSs and versions of PMSs, then seeks answers to two questions: Who are the best guests, and what are the best sources of business? The answers to these questions reaffirmed knowledge that Andrew Scantland, VP, marketing, already surmised about his customers. “We market to pockets of people,” Scantland says.

Destination’s hotels vary widely, from distinctive luxury golf resorts to ski resorts to spa settings. Customer profiles vary greatly, too, in terms of length of stay, frequency of visits and reason for travel. Attentive analysis helps Scantland identify profitable group business and travelers who provide greater revenues per stay and more frequent visits. In addition to discovering the absolute importance of gathering complete, accurate and consistent customer data at each interaction, Scantland confirmed that guests need to be approached in a customized manner. “The key is listening to the guests, not simply sending them information,” he says. Any marketing approach should reflect responsiveness to what the hotelier has learned about the guest, from the guest.

“Hotels and industries in general are beginning to look not just at promotions, but at tools to retain the best customers,” says Sandra Gudat, Customer Communications Group, data analysts for Destination. Many hotel companies have made a huge investment in mass advertising and in developing customer relationships. “They are looking at what it’s going to take to keep and improve that relationship,” Gudat says. “Database marketing is about maintaining the investment you’ve already put into capturing a customer.”

Tech Briefs

Banking on Savings

When the manufacturers of the Hyatt Regency Cologne’s accounting system went bankrupt, Colin Lubbe, Director of Finance, needed to act quickly. Three additional hotels were slated to open in Germany within months, and Lubbe required a reliable system that would allow him access to financial data for all four hotels from his regional headquarters in Mainz, Germany.

Lubbe selected a Scala Hospitality system already tested and proven at the Hyatt Regency Almaty, Kazakhstan. The US$155,000 installation offered a Y2K-proof, integrated management information solution, The wide-area network (WAN)-configured system gives up to 25 concurrent users real-time, online access to the system from Mainz headquarters or Berlin, Hamburg and Cologne properties.

Choosing a pre-tested system enabled a rapid installation—essential, as systems support was no longer available for the previous system—and reduced labor costs. Lubbe did not need to hire finance and account directors for each of the hotels; rather, one resident controller handles on-property financial concerns at each property. “We have seen a reduction of cost in our accounting departments,” Lubbe says. “The central linking of the systems means we can employ fewer staff to do the same amount of work,” he says, and increased integration reduces errors produced by manual input.

Rapid Rewards

Because technology changes so rapidly, a speedy return on investment is essential for new installations. Portland, Oregon-based Shilo Inns, with 45 properties in nine western U.S. states, achieved a two-month return on its online reservation system, powered by an IBM AS/400e business server. Since rolling over to the new system, Shilo has seen a 500% increase in online reservations. Chain-wide hotel occupancy has risen 20%, and profits have increased $100,000 per month.

Prior to the IBM installation, Shilo relied on an outsourced Web site. Users filled out a request for information, submitted it online, then received details on properties and availability. Next, the customer submitted a request for a room. A Shilo employee would then e-mail an offer, which the guest finally had an opportunity to accept. “The process took four to five exchanges,” says Jennifer Hauge, Internet distribution manager.

Not only has the reservation process been simplified, with real-time, direct reservations capabilities, but the site also targets new clientele. Travel agents have greater access to Shilo’s central reservation system, and their bookings bring increased yield on each room. Dynamic content allows Shilo to pursue direct-response marketing opportunities.

Supplyline

Coventus, Inc., Kanata, Ontario, finalized contracts to provide eServices to the Parkhill Hotel, Vancouver; Luxor Hotel, Nepean, Ontario; the Hampton Inn, Lewisville, Texas; and Le Meridien Limassol, Cyprus. High-speed Internet eServices enable business travelers to access corporate networks and e-mail and to communicate electronically with the hotel via laptop from the guestroom to request services...
The Hotel Baker, St. Charles, Illinois, and The Townsend Hotel, Birmingham, Michigan, installed Breeze and Delphi sales and catering systems by Newmarket International, Portsmouth, New Hampshire...
The Cosmos Hotel, Moscow, switched on the LodgingTouch property management system (PMS) by Hotel Information Systems, Irvine, California...
Choice Hotels International, Silver Spring, Maryland, designated Eltrax Systems, Inc., Atlanta, an approved PMS vendor in their endorsed direct vendor program for international franchisees...
The Regal Airport Hotel, Chek Lap Kok, Hong Kong, installed the Revelation point-of-sale system by InfoGenesis, Santa Barbara, California...
Minneapolis-based AmericInn International recommended the Beltsville, Maryland-based MICROS’ 3500 Front Desk Management System to its 170 properties...
TravelHero.com, Scottsdale, Arizona contracted with InSite Hotel Consulting, Sydney, to expand content for the Sydney 2000 Olympic Games...
Starwood Hotels & Resorts, MICROS, and Sabre invested US$29 million in WorldRes, San Mateo, California.

Netline

Industry News American Express launched a Merchant Services Web site for the lodging industry (www.americanexpress.com/lodging) as part of its “Grow With Your Industry” Web initiative to provide marketing tips, industry trend information and statistics to businesses. While some of the information in the “Follow The Industry” section seems geared more towards consumers than hoteliers, the “Maximize Your Business” segment includes case studies of best practices sure to stimulate ideas allowing hoteliers to drive profits, cut costs and increase customer satisfaction.

RealTime Hotel Reports (www.hotelreports.com) focuses more on statistics, gathering information from members and compiling reports on real estate, demographics and performances, available at a reduced cost to participating hotels. News and discussion groups are free.

Booking Engines With a change of name from Room Finders to TurboTrip (www.turbotrip.com), this global online reservation service widened its scope to include car rental companies and airlines. The growing site enables destination-based travel, and although it doesn’t allow Web surfers to seek hotels by brand, Hilton International arranged for TurboTrip to enable online bookings at 500 of their properties around the world.

LeisureHunt (www.leisurehunt.com) also takes a destination-based approach, and works on a smaller scale. While growing to include all of Europe, the site focuses primarily on the UK market and appeals to vacationers. LeisureHunt provides real-time reservations to more than 500,000 independent hotels, many of which lack access to the GDSs. Site membership is free of charge to hotels until bookings are realized, at which time hotels pay a commission on sales.

Hotelguide.com (www.hotelguide.com) announced an affiliate program to encourage partners, such as travel agents, to book its 60,000 hotels. Even if guests cancel bookings or hotels fail to pay Hotelguide a fee for the reservation, partners are guaranteed compensation in the form of redeemable reward points.

Michael D'anthony Talks Technology

Michael D'Anthony, business center manager and director of the technology butler program, Ritz-Carlton Atlanta

Q: What services do your technology butlers provide?

A: Essentially what we try to provide as “The Technology Butler” is a type of personalized help desk. We want to provide troubleshooting abilities for guests traveling with their laptop computers, those looking to print out a document, or creating a presentation, or simply trying to get their European electric razor to work stateside. We can be reached directly by cell phone.

The personal service is what sets us apart. The idea is not to be a voice on the phone trying to walk the guest through. We all know how stressful sitting on hold with a technology service rep can be. Our goal is to answer that question right there if we can. But more importantly, for anything that would involve more than a simple answer, we go to the guest where we will walk them through how to accomplish whatever task they are trying to perform.

Q: What systems and applications do guests struggle with most often? What challenges are most typical?

A: Of course the calls we get run the gamut from missing phone cords to crashed hard drives, but the most common calls are from people looking for local dial-up numbers to reach America Online, or their ISP. We can generally give them the numbers right over the phone. It’s quick, and the guests are satisfied. However, very often they really need help logging on to the Internet. That’s where we jump into action. Generally speaking, we’ll have to make a few changes to their computer setup (setting the modem to dial a “9” or changing the configuration so that the laptop uses the modem instead of looking for a network connection). Interestingly, another issue lately has been the movement of companies from desktop computers to laptops only. People are very used to just grabbing files off of their network and printing to network printers. However, on the road, these options aren’t available. So we try to help our guests realize that they have to make some small adjustments when traveling. We really want people to have a flawless stay with us, and that includes their work as well as leisure. People can get very stressed when they have technology issues. Something as simple as a misplaced file can be extremely stressful. So we really try to publicize the service so that our guests know they have someone they can go to.

As far as applications are concerned, most people tend to have trouble accessing the Internet, using proprietary software to dial up and access their own company network. Additionally, PowerPoint is becoming such a force for people as it penetrates the market (and everybody wants to do a PowerPpoint presentation). We help people set up basic presentations, showing them how to use transitions and gather clip art for illustrations.

By far, though, the worst problems involve lost data. It’s a hard lesson to learn, but everybody needs to back up their information. Crashed hard drives can be recovered, but it is a very involved and expensive process. Additionally, if a laptop is lost or stolen, there is no data recovery possible. So I do encourage guests traveling with vital information, especially if it’s “the big presentation” and the whole purpose of their trip, to keep a back up of these files separate from the laptop and to make sure some one at the office has access and the ability to e-mail any missing files.

Q: What are the biggest challenges you face in providing 24-hour service for such a vast array of technical challenges?

A: The biggest challenge we face is providing the 24-hour aspect. With technology changing as fast as it does, it is impossible to have the answer to every possible scenario. We try to keep a vast array of the most common supplies, including AC adapters and even spare batteries for some common notebooks. But during late evenings and overnights, stores are closed, so sometimes we can’t come up with the needed item. We hate to put our guests on hold, and of course we will arrange to get a replacement part as soon as possible. As far as staffing, it can sometimes be difficult for the overnights. We train our MODs to cover basic issues that can come up, and I am always available directly by cell phone and pager for anything extreme that might come up during overnights. But so far I have not had any desperate late night calls. And of course there is always the issue of training. We keep up continuous learning, training with various laptops, learning the new operating system, and training when the major software programs upgrade. In addition, we do simple 15-minute training sessions each day using situations that may have come up. By sharing these situations, the whole staff can learn how to handle them.

Q: What is one of the most unusual requests you’ve received?

A: As far as unusual requests, I don’t believe in them. There really isn’t anything too strange that we won’t do for our guests. One time I had to find The Daily Racing Form before the Kentucky Derby. Since Atlanta doesn’t have a race track, I had to go online and join the Daily Racing Form. From there I was able to get the guest his information. I’ve gotten maps for people, located kennels for their animals, ordered replacement batteries and even digital cameras for them.