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Hospitality

The Delicate Balance of Next-Generation CRM for Hoteliers

Loews Hotels & Resorts recently announced that it is implementing a CRM solution that will provide a single view of guest history, value, behavior, desire, intent and engagement at 23 of its locations.

The new solution will tap into first and third party data sources to deliver “one-to-one marketing across all digital channels.” These channels include email, Web, display ads, mobile, social, video and search.

While this effort is laudable – and reinforces the value of being able to provide sophisticated guest intelligence, reporting, and analytics – it can create a “too much of a good thing” phenomenon where the brand could potential bombard guests with too much information.

Of course, the main driver for this effort is to enhance marketing and up-sell opportunities for Loews. However, if you saturate a guest with offers through every possible digital channel, it could potentially turn them off.

The key is being able to leverage this system beyond just for marketing. The goal behind a new CRM system should be to simply help the guest. This can include developing targeted offers based on the guest’s true preferences, and pleasing the guest through the entire stay cycle.

In addition, consumers are becoming savvier about how targeted digital marketing actually works. If they are watching a music video on YouTube, and then see an ad for that particular band or musician on Facebook immediately after, they often feel like they are being tracked – or worse, spied upon by brands.

This all requires a very delicate balance because too much of a good thing can be bad. Other hotel brands should certainly try to emulate what Loews is doing with this new system. The strategy should always be to please the guest, and not bombard them with marketing offers.

 

Tackling the Branding Challenge Hoteliers Face

With a wide-range of mergers and acquisitions occurring in the hospitality arena, many of the largest hoteliers have to grapple with the challenge of maintaining and promoting their brands.

In addition, as the brand landscape becomes more crowded, chain flags are now required to work harder and be more focused – but there is room for all, according to a recent panel discussion at the December 2015 Sleep Conference.

One of the key takeaways from the discussion was that a brand remains an “idea that is still magical” in the hospitality arena. However, legacy brands are currently under the most pressure especially in today’s post-acquisition environment where many hoteliers seek to cut costs.

The reality is that hoteliers need additional resources to shepherd their brand propositions, post-acquisition. This comes at a time when many sub-brands (i.e., Aloft Hotels) are intentionally distanced from their parent companies because they want to appeal to travelers seeking a more boutique-like travel experience. This is very common for the highly sought after millennial travelers.

One of the biggest challenges is being able to continually deliver on the brand promise in a rapidly changing marketplace.

“The success of the larger chains’ brands have come about because they have inherently been able to deliver on their promises,” said Mark Jory, founder and owner of creative branding firm Latitude Agency, during the panel. “And the promise of the brand is delivered at every price point.”

This perspective reinforces the value of nurturing a brand for true competitive differentiation. The key is to make sure that every hotel – post-acquisition – has the right resources to keep the “myth and magic” of their brands fully alive.

 

Hyatt Embraces the Sharing Economy?

While many major hotel brands are trying to combat the rise of sharing economy leaders like AirBNB, one hotelier is actually embracing it.

Hyatt Hotels Corporation has made an investment in Onefinestay – a provider of high-end home rentals in New York City, London, Los Angeles and Paris — as part of a nearly $40-million fundraising round completed at the end of 2014.

The global hotel brand has not fully disclosed how the investment will help it get a leg up in the new sharing economy arena. However, during a recent earnings call President and CEO Mark Hoplamazian said that the investment will offer a “learning opportunity.”

“We’ve always been drawn towards it, not sort of away from it, because we feel like we need to learn from what we’re seeing evolve in the market and how consumers think and how they behave,” said Hoplamazian, in this Hotel News Now article.

This learning opportunity – by investing outside of the core business – will allow the brand to gain insights into the stay-cycle of sharing economy guests. In addition, the brand will be able to learn more about affluent guests, and perhaps leverage data that will help them in developing high-end concierge apps and services.

In July 2014, Hyatt announced that it entered into a pilot program with Onefinestay, where it lets house renters freshen up at the Hyatt Regency London – The Churchill if they arrive early for their rental.

This is an interesting strategy that lets these types of guests to experience both the hotel’s amenities while also creating loyalty – in a situation where guests would not think twice about the hotel brand.

By taking this approach, Hyatt is going to achieve a leg up on the competition. Rather than fighting an emerging threat – or denying that it exists – the hotel brand has some “skin in the game,” and could potentially prosper in the long run.

Gaining market knowledge and insights on “sharing economy” guest preferences could be translated into the development of new programs that could greatly benefit guests – whether staying at Hyatt or at a Onefinestay property.

 

What Expedia Investing in Guest Experience App Means for Hoteliers

Expedia recently made headlines with the news that it is investing in Alice, a back-end platform for hotel operations and guest app for communicating with hotel staff.

Many believe that this partnership will allow Expedia to market the Alice platform to hotel partners, according to this SKift article.   Alice allows the OTA to get a leg up when it comes to guest-facing technologies with this software-as-a-service platform that enables multiple departments within a hotel to respond to guest requests and provide reporting and analytics. But what does this mean for hoteliers?

In one sense, this investment reinforces how OTAs like Expedia truly see the value of leveraging big data to enhance the guest experience. Ultimately, Expedia wants to serve as the “guest service back end” for hoteliers, who have traditionally been slow in embracing these types of solutions.

However, one question remains: will hoteliers be willing to allow OTAs to have a deep reach into guest data?

This remains to be seen. And, hoteliers should also consider whether or not the vision of this effort is to enhance the guest experience, or steer the guest away from their respective properties. This should go much deeper than the traditional OTA model of helping guests find the best hotel rates.

As always, any guest-facing innovation should focus only on pleasing travelers, which ultimately translates into long-term loyalty and enhanced revenue. It seems that OTAs are aiming to get a piece of the pie in an area where hotel brands have been slow to catch up.

Either way, leveraging big data for enhancing the guest experience is a new shift that is here to stay – and it seems that OTAs are taking the lead.

 

Hotel Reputations Are Made (or Broken) Outside of the Property

For many years, the concept of establishing a strong reputation for a hotel brand focused primarily on activities on the properties. From concierge services to ensuring that a property is clean, many hotels are continually seeking new ways to please guests while they are in the “stay” portion of their booking/travel cycle.

But today, with the rise of mobility, this has all changed.

Hotel brands now have the opportunity to meet and exceed guests’ needs in a mobile environment, which translates into finding key touch points throughout the entire booking and stay cycles. In terms of the big picture, reputations are either made or broke in the mobile arena.

In other words, a hotel can establish the right PR strategies through virtually every guest-facing technology, according to Hamish Dodds, President and CEO of Hard Rock International.

“From a brand point of view, mobile devices can very quickly define your brand,” said Dodds at recent HICAP event. “The future is even more uncertain as driverless cars, keyless entry, luggage delivered by robots, dinner and room service delivered by drones, and all the systems in the room programmed to meet guests’ needs will affect a brand’s reputation.”

Of course, meeting and exceeding guest needs while on property – along with traditional PR efforts – will still play a key role in enhancing a brand’s reputation. However, with multiple guest touch points now emerging, every innovation effort has to be aligned with a larger PR strategy.

For many larger brands, this is a challenge because of leadership challenges, and the slow adoption of new reputation enhancing innovations and strategies.

We are in an era where the status quo will no longer work for hotel brands. Those hoteliers who realize – and actively develop the right PR strategies that permeate through every guest touch point – will rise above the pack.

By re-educating the business and seeking reputation-enhancing innovations that actually please guests, the most nimble hoteliers will win the war for brand loyalty among guests.

Impact of Uber On-Demand Delivery on Hotels

Once again, Uber is shaking things up in the services arena. First by providing alternative to taxis, and now by offering the delivery of food from near-by restaurants, which could have an impact on the hospitality sector.

Although this could provide an easy alternative for guests to have food delivered to their rooms, it goes without saying that this could eat into the revenue that comes from traditional room service.

The rise of this type of service could also cause hotel lobbies to be filled with bike messengers who are gaining access to various parts of the property. This could create a challenge, as several larger hotel brands are following the lead of many boutique hotels, where a key card is required for gaining elevator access.

Conversely, if hoteliers embrace this new delivery shift, they can expand their restaurant options for guests. By integrating guest-facing apps with Uber’s API, it would be possible to enhance the guest experience by allowing them to choose from virtually any restaurant in the surrounding area. This approach could help hoteliers to adopt this new concept, and ultimately the guest wins in the end.

Companies like Uber and Airbnb continue to challenge the hospitality sector. While Airbnb is a more considerable threat, these types of new Uber services provide attractive options for guests. And, unlike the dot-com era delivery services like Kozmo and UrbanFetch, which both fell by the wayside when the market crashed in 1999-2000, Uber has the resources to make this service truly successful.

Time to get prepared for a new change in the ever-shifting hospitality landscape.

 

Guest Satisfaction Though Measurable Big Data Strategies

With the rise of ubiquitous big data, it is possible for hoteliers to create more value for guests by properly leveraging this type of information.

This was a key theme of a recent Xirrus blog post that showcased IBM’s VP of Travel and Hospitality, Bruce Speechley’s keynote address from the Hotel Technology Next Generation conference (HTNG).

The post discussed how value creation lies in analyzing generated data and making it actionable to ultimately please the guest. The article also talks about capturing data from mobile devices (i.e., on ‘the edge’) and how this information can be used to create personalized experiences for guests.

However, while the article discusses the value of leveraging data, it is missing one crucial element, the development of measurable goals and metrics.

When embarking on new strategies for collecting and making data more actionable, hoteliers need to have goals about conversions, outcomes and the development of key performance indicators (KPIs).

For example, hoteliers should ask themselves the following questions at the outset of this type of effort:

  • What are we trying to achieve?
  • What do we want to learn?
  • Can we see what is working, and what is not working?
  • Can we change direction based on the data gathered?

In order to please guests, hospitality providers can “back into” this pool of data and glean the types of insights that will aid in the development of programs that truly enhance guest loyalty.

In other words, a large pool of data is not valuable unless you have a roadmap to guide you in ways that make this information valuable to the business.

Hoteliers: Are You Missing Revenue Opportunities by Not Leveraging Data?

At the recent Marketing Outlook Forum, J. Walker Smith of the Futures Company discussed how hoteliers should not just focus on the “next big thing,” but also be on the look out for “Vanishing Points.”

According to Smith, this is when established factors of influence wane out of relevance, creating a vacuum that must be replaced by something new. The key is being able to spot these “Vanishing Points,” and anticipate what will fill these new voids.

For hoteliers, this could mean anticipating when mini-bars and in-room movie rentals will (or currently are) no longer be relevant to guests. However, there is a much bigger trend at play here that will truly help hospitality providers anticipate “Vanishing Points,” which is leveraging data from other sources.

In order to truly anticipate shifts in guest preferences – and innovation changes – hoteliers need to consider leveraging data from Acxiom and other providers to paint a true picture of what guests want. This also includes integrating data from loyalty programs and other sources to see everything from purchasing behaviors, and demographic shifts.

In addition, hospitality providers can pick a persona or a sub-set of guests and build out a business intelligence effort that will provide true insights into what guests want now and in the future. In other words, knowledge is power but the knowledge must be grounded in real data.

Otherwise, many hoteliers run the risk of not seeing these “Vanishing Points” in time to make the necessary business shifts. The end result is lost revenue.

Conversely, by being armed with this data, it is possible to stay ahead of quickly changing trends buying habits, which will give any hotelier a vast leg up against the competition.

 

Will Beacons Drive More Revenue and Keep Hotel Guests Happy?

For the past two years, beacons have provided an opportunity for retailers to message shoppers and track consumers’ habits with two-way BlueTooth devices.

According to Business Insider’s BI Intelligence, beacons will drive more than $4 billion worth of retail sales in the he United States this year, with that amount increasing to $40 billion in 2016.

But do beacons really provide hoteliers with the ability to grow revenue while also pleasing the guest with new offers? According to this recent Hospitality Net article, the answer is “yes.”

It certainly seems this type of service, especially when it comes to promotions for spa services and restaurant discounts, would best work with resorts. But it can be complicated for hoteliers. To accomplish this goal, guests would need to download a separate app and activate BlueTooth on their mobile devices for this to effectively work.

In most instances, only the early-adopting, tech-forward guest would be apt to use this type of service. Some guests also may find this type of innovation to be invasive, and could raise privacy concerns.

In addition, the technology needs to be embedded into the existing hotel mobile application on the brand-level. As we all know, there is major competition in the mobile app space, and guests would most likely be unwilling to download another app, especially one from an individual property. The reward would need to be significant for guests to actually download and use the app. For example, a discount for a spa treatment would be nice, but will it be enough for guests to be enticed to use it?

This all remains to be seen, but it does point to the emerging trend in the hotel arena where brands are implementing technology for “technology’s sake.”

We certainly applaud new innovations that ultimately please the guest and translate into long-term loyalty. While the beacons seem very interesting on the surface, we shall see if they actually take off in 2016. We’ll keep you posted.

 

Online Travel Agencies More of a Threat Than AirBNB to Hoteliers

While AirBNB is gaining momentum with its revenues of $900 million expected to grow 10 times by 2020, hotel leaders are more concerned about how online travel agencies (OTAs) and metasearch sites are eroding their profit margins.

This was a key theme discussed during a hospitality panel at the recent Hotel Investment Conference Asia Pacific in Hong Kong.

“To me this is the single biggest issue facing the industry,” said Michael Issenberg, Chairman and CEO for AccorHotels Asia/Pacific, in this recent Hotel News Now article. “The power that OTAs and metasearch have created is extraordinary.”

To counter the OTA challenge, the executives on the panel discussed how relationships with these sites should not be combative because of their partnerships with OTAs, and commission rates have dropped. These executives also highlighted how using these third-party systems could be more cost-effective.

The challenge of this strategy is that hoteliers cannot agree on an industry standard. In addition, if a third-party owns this data, then it is all too easy to get locked into higher pricing arrangements with the OTAs.

An even bigger challenge is that the hotel industry is very different than airlines. For example, airlines don’t have REITs that own commercial planes with national brands painted on them. In addition, airlines don’t have local managers with the degree of autonomy that can make or break the reputation of a carrier at an airport.

In other words, hotels are dealing with major complexities when it comes to getting all of their properties on a uniformed booking system.

Of course, REITs want better profit margins out of their hotel properties, which is possible only when the hotel owns the complete booking path — in completely standardized way. By doing this, it is possible to own the guest experience from booking and beyond, which is where long-term loyalty is created and sustained.

Dealing with OTAs is no small challenge and we applaud these hotel leaders for discussing this issue openly in this type of forum. It’s clear that this is will be an ongoing issue, which we will be tracking in the foreseeable future.