HITEC In Review
Using technology to help build better customer relationships was the resounding theme at this year’s conference.
By Rebecca Oliva, Technology Editor -- HOTELS Magazine, 8/1/2002
Getting back to the basics of hotel management was the message at this year’s HITEC conference. Speakers at the sessions and seminars stressed that technology is secondary to good customer relations, and demonstrated ways for hoteliers to use technology to better market their hotel services. Buzz phrases such as customer relationship management (CRM), market drivers and a customer-centric focus were heard throughout many of the seminars. Sessions addressed the importance of seamless integration of property management systems (PMSs), central reservation systems (CRSs) and other hotel systems to create real-time hotel data and accurate customer information.
The Hospitality Financial and Technology Professionals’ (HFTP) 30th annual Hospitality Industry Technology Expo (HITEC) convened on June 25-27 in Chicago with hoteliers and vendors coming together to confer on hospitality technology issues happening today and discuss the possibilities of tomorrow.
The audience at the opening session, “The Past, Present and Future of Technology,” was launched right into the high-tech state of mind with a talk given by technology forecaster Daniel Burrus and John C. Dvorak, technology editor, author and columnist. The two relayed their thoughts on the history of hotel technology and what they believe will be the next trends in the coming years. Other important sessions included, “The Changing World of Distribution,” “CRM,” “High-Speed Internet Access” and “Emerging Technologies/Smart Cards.”
HITEC’s 5,500 attendees were able to visit more than 600 booths as well as network with other industry professionals and attend educational sessions. Here is a glimpse of some of the topics covered.
Technology: Where Is It going?
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At one of the more dynamic opening sessions at HITEC, two prominent technology writers, Daniel Burrus and John C. Dvorak, gave their impressions of the successes and failures of the tech world.
Burrus recapped the history of technology in the hotel industry, saying, “We are moving out of the information age and into the communication age.” Smart cards and in-room amenities are designed to communicate with employees and guests, and hotels should use them as such.
Burrus noted that when it comes to technology you must ask, “What is the advantage?” There are too many hotels jumping into technology without realizing the benefits first. His advice? “Think ahead,” he said, “Don’t go looking around in crisis mode, go into expectation mode.”
He devised a “both/and” model, which means the future will accommodate all types of guests. According to Burrus, future technology will include, “wired and wireless; digital and analog; fiberoptics and copper. The Internet is both an information and a communication tool.”
Burrus encouraged hoteliers to make smarter decisions by looking forward into the long-term. “You are in the memory creation business,” he said. “Don’t let the dot-com meltdown blur your vision of the future. In the ‘e’ world, think ‘c’ - customer, connectivity, content, continuity.”
Dvorak named wireless connectivity and self-service technology in hotels as the keys to the future. He predicts global positioning systems (GPS), video and radar are “shrinking technologies.”
CRM: Putting Focus Back On The Customer
As customer expectations continue to rise, it is more important than ever for hoteliers to devise comprehensive CRM strategies. Such was the message from the experts participating in HITEC’s CRM seminar.
Seventy percent of CRM projects fail. And the reason they fail, according to the expert panelists, is twofold: as projects become more complex, CRM is harder to manage; and hotel companies often lack clear goals and ways to measure success. Some key attributes of successful CRM programs mentioned include, focusing on concrete, well-defined financial objectives; focusing on a series of short-term initiatives; placing a strong emphasis on measurement and reporting; and receiving strong, across-the-board, executive commitment to the projects. Moderator Scott Smith, director of hospitality and leisure practice at PricewaterhouseCoopers (PwC) Consulting, added, “When getting a CRM program started, ask yourself, ‘Where are you today? Where are you going? And how are you going to get there?’”
“Thirty percent of customers create 80% of our revenue,” said panel member John Boushy, CIO and senior vice president of operations products and services for Harrah’s Entertainment. “To us, CRM means treating customers better than anyone else in the industry. We have a customer-centric model from the top down, and we want to create a consistent customer experience across all touch points.”
Harrah’s formulated its CRM program to have tight integration with marketing, operations and IT. The company invested US$17 million in its WiNet CRM technology to better measure and analyze such items as customer demographics and gaming behavior. The company also has introduced its Total Rewards loyalty program with tiered levels to reward customers. Harrah’s built a new Web site around the program.
Panelist Christine Steinberg, vice president of shoreside operations at Cunard Line Limited, addressed the “high touch vs. high tech” models of CRM. The luxury cruise operator created a reservation system that captures guest cruise history and preferences as well as tracks travel agent selling habits, since agents are the cruising industry’s primary distributor. The company uses that captured data to generate targeted direct marketing campaigns, Steinberg said. Such marketing initiatives include pre-selling cruise services based on purchase history. The company also has found it helpful to record “spill data” Steinberg explained, meaning inquiries to travel agents that didn’t turn into bookings. An enhanced Web site to better address customer needs furthered the company’s CRM initiative. Users now can create customized itinerary searches online.
Future CRM initiatives the company is working on include using the room-key card to do everything onboard the ship, which is easily trackable, she said.
CRM was the focus of another seminar entitled “Emerging Technologies/Smart Cards.” The seminar focused on how creating individualized experiences for customers will be the point of differentiation among brands. “CRM will increase competitor advantage,” said Declan Boland, strategy consultant for IBM. “Hoteliers don’t really know who their customers are. The new paradigm is from CRS to CRM.”
Among the technology advances Boland discussed were the explosion of the Internet for transactions and real-time, dynamic virtual relationships with customers; voice technology wherein language processing will become “much more credible”; increased storage density and bandwith; digitized displays and power efficient, module computers.
Alan Scheik, senior manager of marketing development for Cisco Systems, also offered attendees his vision of hospitality technology’s future. “Technology innovation is forcing change in hospitality,” Scheik said. “Technology is focused on CRM to target and personalize guest experience.” In the future, Scheik explained, differentiated experiences will better meet the needs of travelers.
Scheik addressed the proliferation of wireless, real-time connections and IP-enabled applications. He also discussed a future where voice and data integration is the norm and IP telephony is tied into CRM. For example, he envisions a time when hotel guests can check out by pressing a single button on the in-room telephone. He also cited high-speed Internet access as a catalyst for adopting emerging technologies.
Internet: Moving At High Speed
Although the topic of Internet usage and access in guestrooms has been exhausted, experts discussed the topic as it relates to hotels. Derek Wood, managing director of Derek Wood Associates, gave an overview of Internet access options for guestrooms. He noted the pros and cons of different types of access. For example, dial-up modems provide hotels with an inexpensive connection and allow them to charge guests with monitor usage, but revenue opportunities are limited. ISDN 2 is relatively inexpensive for a small number of access lines, but a monitor through the television offers poor visual quality and the television is not usually in the correct position in the guestroom. GSM/WAP phones cost a hotel very little yet generate no revenue and access speeds tend to be slow.
Panelist Kirsten Limbacher, director of hotel telecommunications at Six Continents Hotels, said, “while many customers prefer high-speed Internet access, it is just not there yet.” Limbacher noted that while the technology is good for marketing purposes, it is inversely proportionate to profits. Also, she reminded the audience that no matter what type of access is available to guests, it must be reliable. “It doesn’t matter why it doesn’t work, it still reflects badly on the hotel.”
“The Changing World of Distribution” gave the audience a chance to participate in a question-and-answer session, which offered more questions than answers in the ever-changing, ever-complex world of distribution. The merchant model and the commodization of travel were the major concerns of session attendees. The OpenTravel Alliance (OTA) and Travelweb were mentioned as predominant ways for hotel companies to regain control lost to the third party consolidators.
The message is that consolidators had “preyed upon those not concerned with distribution,” according to Jim Young, vice president of global distribution for Atlanta-based Six Continents Hotels. The wave of the future points to wholesale prices continually exposed via the Internet. It is a “transparent model,” he said, adding that hoteliers need to get inventory back from the consolidators by building a better model— and taking control. Hotels need to develop their own model that makes payment faster, automated and yield-able.
Hoteliers also need to consider brand dilution from opaque pricing model such as priceline.com. They need to develop a strategy to deal with the how, when, where to provide inventory through this model, Young said.
One of the big questions asked by the audience was, “How do you manage consumer confusion when there are multiple places to search for rates and each has a different price?” Offering an answer was panel moderator Valyn Erickson, principal consultant at PwC Consulting, who said, “The definition of rate integrity has changed. Today, consumers are used to and expect to find different prices different places. There are simply too many channels to have the same rates everywhere.” What the hotel companies need to do is supply the “why” certain rates are what they are, and establish rules that address those rates, Erickson added. Hotels, it is believed, will follow the model of the airlines wherein different rules have different price points. “This is the biggest opportunity for this business to enforce the rules,” Young said. Best Western International’s CIO Michael Kistner added, “standardization of those rules is key.”
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