CRM for Everyone! Why Hotels Are in Need of Better CRM Programs
Earlier this month, CRM Magazine drew attention to the retail industry as one in need of more CRM; another such industry with room for CRM improvement is perhaps a less obvious one: hotels.
There are 4.4 million hotel rooms in the United States, according to the American Hotel and Lodging Association (AHLA), and that number implies not only a wealth of places to stay, but the difficulty some hoteliers might face in keeping customers loyal to their establishments. The case of hotels and their guests is much the same as the relationship between airlines and their customers—they both rely heavily on customer rewards programs. But by and large, the hotel industry is not as far along on the rewards program spectrum. Larger hotels—especially casinos—have CRM implementations, but establishments of all sizes in that industry need more CRM.
The largest hotel chains make the most use of their CRM platforms, focusing mostly on loyalty programs that primarily benefit frequent travelers. These rewards programs usually take the form of discounts for extended stays, and deals on rooms based on points accumulated from frequent visits. As stated previously, it is much the same as an airline’s loyalty program, but examples from airline initiatives prove there is more to be done.
For example, many airlines and online travel agents will email customers with upgrade opportunities with the confirmation of their ticket purchase. There are some hotels with a similar practice, but most hotels do not do this—even though for some it could generate millions in revenue.
Examples of large hotels using CRM efficiently often come from casinos. Harrah’s Casinos have developed a means of not only tracking customer behavior, but doing it during their stay. Guests are given a “Harrah’s card” when they check in to be used as a credit card during their stay, and tracking these purchases in real-time allows the hotels to offer rewards while guests are there—it’s been a hit for ensuring repeat business. Some hotels also have a breakout of guests by room, keeping track of which customers are traveling as families, for business, etc.
Those hotels most in need of CRM are the second-tier establishments, of which the AHLA estimates there are more than 49,000, with a minimum of 15 rooms apiece. It’s unclear why exactly CRM implementations are underused in the hospitality industry. It could be confusion about what such programs are; it could also be confusion about deployment costs. Still, there are plenty of CRM vendors offering platforms for hotels, and web-based CRM is certainly affordable—for a single guest property, SaaS CRM systems can be deployed for $75,000 to $120,000 per year.
Real-time data has catalyzed a lot of races of late, and it is becoming more and more important for hotels to capture guest information and cater to their needs in very specific ways.
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