Getting Connected
As database marketing becomes more complex, hotels turn to the Web to centralize and simplify the process.
By Rebecca Oliva, Technology Editor -- HOTELS Magazine, 3/1/2001
The Internet is bringing customer information
together and putting it into the hands of hotel management. Web-enabled
customer management (CRM) systems are making their way into the hotel
industry—cutting
the cost, time and energy normally associated with database
marketing. Hotels are realizing a multitude of benefits
that come with centralizing customer data, such as improving guest
relations, assessing their customer pool and conducting efficient
direct marketing campaigns.
“You get smarter about who your customers are,” says Kevin
Short, of being able to access a centralized database. Until recently,
CRM systems benefited only marketing departments of large chains or
independent hotels as a tool to keep track of their most valued customers’ needs.
Today, Web-based CRM systems make database marketing easy to manage
because it’s so accessible. And, because almost anyone can log
on to the Internet and find his or her way around, there
is minimal technical training needed. A hotelier needs only a password
to log on.
But what makes Web-based CRM systems so ideal is that data is stored
in one common place, unlike storing it on individual property management
systems (PMSs). Because the data can be accessed through a Web browser,
it can be used not only by multiple properties, but it also can be segmented
into specific categories for analysis. That means, with a click of a
mouse a hotelier can run reports according to behavioral segmentation,
customer profiles and geo-demographic statistics.
While systems vary, most Web-based CRM systems
work as a data warehouse, pulling data from central reservation systems
(CRSs) and PMSs. The data then goes into a repository, in the care
of the vendor, where it can be sorted and analyzed. Employees of any
property then can access the database via the Web, provided they have
the password. This process eliminates a hotel having to input data
manually into a central system. And the benefit, according to Short,
is that it is cost-efficient. “It
would cost an individual hotel a minimum six figures to set this up,” Short
says. “We can do this for a lot less.”
And just how much less is up to the individual
hotel. Cost depends on the amount of data a hotel is looking to store
and how it is used. Toronto-based Opal Sky’s OpalSky.Travel, a Web-based CRM system
can be purchased on a subscription-only basis ranging from US$1,500
to US$15,000 a month. The basic system includes business intelligence
reporting ability, Web access and a customized guest data warehouse.
Data mining services also can be purchased for additional fees. Other
systems such as Pegasus’ Guest Relationship Management (GRM) program
costs an initial fee and a small monthly fee, as well.
The cost of systems depends on how extravagant a hotel wants to be with
its data.
Knowing Your Customers...All Of Them
While many hoteliers believe they know who their
most frequent customers are, most know only a fraction of
their total customer pool. Alexandra Hamilton, vice president
of sales and marketing for Opal Sky Inc., says that when
hoteliers tell her what they believe their biggest customer type to
be, it usually makes up for only a small percentage of the entire
customer pool. “Because a lot
of hotel companies don’t have the luxury of pulling all the
information into one place,” she says, “they only may
know part of the story.” Having an accurate picture of the customer
pool allows hotels to receive a higher rate of return
in direct marketing campaigns, Hamilton says.
By connecting all of the customer information
via the Internet, hotels can broaden their view of their customers,
making way for endless possibilities in marketing and guest services. “The biggest advantage is that
we are really totally understanding who our customer is,” says
Peter Strebel, vice president of marketing for Omni Hotels. The luxury
hotel chain just implemented Pegasus’ GRM program in 33 of its
properties and plans to have it in all 41 properties by the end of 2001.
As a result of GRM, Omni now has changed some of its marketing strategies. “We’ve
devoted more money to direct marketing because we now have good addresses
and customer information,” Strebel says. With GRM, Omni has detailed
customer profiles in order to conduct successful targeted
mailings, Strebel says.
And, discovering who Omni’s frequent customers are has been somewhat
surprising. “We found more loyal branding than we thought,” Strebel
says. “People are actively seeking us in the markets they travel
to.” With this information, Strebel says, Omni was able to see
the different sets of customers and which marketing methods
best fit them.
Preferences: The Key To Success
Knowing your customers is necessary for marketing purposes,
but knowing their preferences can help keep them
coming back. Before travelling on business to London, a woman was e-mailed
a questionnaire by her hotel. It asked her to list
her preferred music type, toiletries and favorite colors. Once she arrived
at her room, she found her favorite Aveda products in the bathroom,
her room was decorated in her favorite colors and a stereo system was
stocked with classical music and Elton John CDs. The housekeeping staff
even came to her room with a checklist to make sure her every wish was
accommodated.
Seem far-fetched? It’s not. Centralizing data through the Web
is not only easy to access, but helps improve guest services. “There
is nothing more frustrating for a guest than to have to ask for the
same thing over and over again within a chain,” says Adrian Bell,
director of brand marketing at Preferred Hotels. Preferred
is currently beta testing OpalSky.Travel in four of its member hotels.
The benefit here, Bell says, is the access to large amounts of customer
data by independent hotels.
However, Bell attributes the greatest bonus of
accessing data via the Web to the ability to capture preferences of
all its customers and execute their wishes. “In the luxury segment, we think preference is the
key,” he says. Data included in the warehouse includes pillow
size, room type, floor height, view preference and favored type of drinking
water, among others. Preferences are tracked at each property and automatically
pulled into OpalSky.Travel. Once the system is up and running at each
property, Preferred will be able to check a guest’s preferences
before he or she even checks in. Having knowledge of guests’ preferences
from previous stays and being able to execute them, Bell
says, allows Preferred to be one step ahead of its repeat guests.
Targeted Promotions
As with any database used for marketing purposes,
Web-based CRM systems can also be a tool for targeted promotions,
allowing hotels to cater to their customers’ needs by reviewing their travel
history. With OpalSky.Travel, Preferred can establish which promotions
its customers will be susceptible to buying. It has been able to conduct
targeted marketing campaigns to customers who have the propensity
to respond to such offers. “This allows us to receive a higher
return per dollar spent,” Bell says. As an added bonus, with
OpalSky.Travel, e-mail campaigns can be sent directly
from the system or sent to e-mail fulfillment companies.
According to Hamilton, one of the many benefits of linking information
across properties is that hotels can run reports so easily from OpalSky.Travel,
according to Hamilton. The initial report set in the basic system includes
the ability to segment data into 50 to 100 different reports. Reports
can be generated for almost any data. Some report titles include: top
1,000 consumers by booking lead time; top 50 travel agents by profits
by product for first quarter; return on investment for marketing campaigns.
Capturing Potential Customers
In addition to using the Web to store and analyze
customer data, there are other ways in which the Web can be
used as a tool in marketing. Perhaps one of the best
strategies to capture customer information is through
a hotel’s Web site. Recently, Swissôtel
Hotels and Resorts added an online guest book to its
site. The Guest Book is designed to collect vital information
on all current and future guests for customized, one-to-one marketing. “Our
mission is to collect information on current and potential
customers who want to be communicated with,” says Michelle Woodley,
vice president, distribution marketing for Swissôtel. Visitors
of the Web site are invited to record their favorite Swissôtel
properties, favorite holiday activities, frequent flyer programs and
contact information, among other preferences. They also are asked about
their interest in receiving promotional offers. The guest
information then is stored in a database accessible via the Internet
for all Swissôtel’s
worldwide locations to access. The value of this information
is that it is unsolicited, taken from people who want
to be contacted, Woodley says.
So far, Swissôtel has received a list of 1,500
respondents through Guest Book and is currently integrating
the list with its central database. Guest Book is part of an integrated
e-CRM solution called “Project
Symphony.” In its initial stages of implementation, the project
includes real-time Internet booking, central sales management
and customer preferences management. “Our goal is to increase
our repeat guest factor,” Woodley says, which she believes is
achieved through better knowing your customers.
Tech Briefs
Hyatt implements Hotelevision
Offering more cable channels to guests is always a
way to make guests’ stays
more pleasant. But receiving revenue for it is always more pleasant too.
Recently, Hyatt Corporation, Chicago, implemented New York-based Hotelevision
in 45 of its properties in the U.S. The system provides a package of
10 cable networks free of charge to supplement existing in-room channel
offerings. The programming contains advertisements targeting high-income,
well-educated and decision-making business travelers. Using digital
video satellite technology, up to 12 targeted commercials per hour are
inserted. The revenue generated by Hotelevision is shared with the hotel.
While Hyatt receives a percentage of the advertising
revenue, the amount is not a significant one. “Our main concern is offering additional
channels to our customers,” says Norm Canfield, vice president,
rooms division, Hyatt Hotel Corp. “The advertising revenue was
a nice plus.”
Hyatt plans to install Hotelevision in all of
its 120 properties in the U.S. It currently receives 10 channels via
the service, including The Weather Channel, CNBC, MSNBC and CNN. “The key motivator here
was guest service,” Canfield says of the diverse channel offerings. “The
enhanced channel package is very useful to our guests.”
Supply Line
- Omni Hotels, Irving, Texas, selected Florida-based
Ultimate Software’s
UltiPro Web and UltiPro HRMS/Payroll for payroll,
benefits and employee management...
- AlphaNet Hospitality Systems Inc., Ramsey, New Jersey,
was chosen to install 500 InnPhones in all guest
suites at Southgate Water Tower, a part of New York-based Manhattan
East Suite Hotels...
- Kempinski Hotels & Resorts, Geneva, Switzerland,
signed an agreement with New York-based NewspaperDirect to install
an electronic newspaper delivery service...
- Meyer Jabara Hotels, Danbury, Connecticut,
selected Fort Lee, New Jersey-based Everest Broadband Networks’ FastRoom
to supply high-speed Internet and other broadband
services...
- Holiday Inn, Plainview on Long Island, New York, selected
Daylight Software, Mission Viejo, California, to
provide sales and catering solutions...
- Presidente Inter-Continental, Mexico City,
selected Denver-based On Command to provide in-room
entertainment services...
- Muli-Systems Inc. Phoenix, was selected by
Great Western Hotels, La Habra, California, to
provide property management technology to nine of its properties...
- iHotelier,
Houston, an e-business solutions provider is expanding
its Internet services to the Latin America market...
- Paris-based Accor,
in agreement with LodgNet Entertainment Corp.,
Sioux Falls, South Dakota, has upgraded more than 250 of its Red Roof
Inn properties to El Segundo, California-based DIRECTV digital satellite
entertainment.
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