THE MAGAZINE OF THE WORLDWIDE HOTEL INDUSTRY SEPTEMBER 2010THE MAGAZINE OF THE WORLDWIDE HOTEL INDUSTRY NOVEMBER 2010

Hoteliersof the

World

56 HOTELS November 2010 www.hotelsmag.com

TECHNOLOGY: CRM

Hotels big and small are

using technology to make

their loyalty club programs

the centerpieces of strong

CRM strategies.

By Ann Bagel Storck,

managing editor

joinTHE

CLUB

WWhen it comes to catering to the luxury hotel guest, details count — the type of pillow on the bed, or whether the water in the room is carbonated or not, for example. Delivering those details, though, requires more than just service on the back end; it demands an under-standing of what guests want before they ever walk through the door.

“We’re passionate about collecting data,” says Brian Richardson, vice president of brand marketing and communications for Fairmont Hotels & Resorts, of the luxury hotel com-pany’s strategy for its President’s Club loyalty program. “Our [President’s Club] members are pretty forthcoming with information, because they know it will translate into what we do.”

The Fairmont President’s Club (FPC) represents the biggest part of customer relationship management, or CRM, for the Toronto-based hotel company, which has more than 60 properties globally. Since the program launched in 2000, it has collected close to 2 million members. “Our FPC members represent

www.hotelsmag.com November 2010 HOTELS 57

a tremendous amount of business for us,” Richardson con! rms.

Effective CRM can equal a tremen-dous amount of business for all hoteliers. Improved top-line and bottom-line revenue, the ability to understand guests’ stated and observed preferences and enhanced operating ef! ciencies are all advantages of a solid CRM strategy, notes Henry Harteveldt, vice president and principal analyst, airline and travel research, at Forrester Research Inc. in San Francisco.

While CRM is inherently a broad activity, for hoteliers, it often boils down to creating the best possible guest loyalty program. “For most hotel chains, their loyalty program is their CRM strategy, and their CRM strategy is their loyalty program,” Harteveldt con! rms. “Hotels are keenly aware of the value of their loyalty programs.”

Making what’s old new

Fairmont’s loyalty program is focused on personalized recognition — preferences for room location and type of water pro-vided at turndown, for example — rather than points, which necessitates both the need to collect information from mem-bers and the ability to use it.

Richardson explains that the technological infrastructure behind the program — a combination of propri-etary elements developed internally and off-the-shelf components — has not changed much during FPC’s ! rst decade because a “very scaleable” platform has allowed for the program’s growth. That’s not to say, however, that FPC isn’t evolving. A Fairmont iPhone app introduced in August offers FPC members full access to their accounts.

The app bene! ts both Fairmont and its guests, Richardson con! rms. “We can push our messaging on an app like that,” he notes. “Plus, it [represents] convenience and ef! ciency from a member perspective.”

Omni Hotels’ loyalty program, Select Guest, is also well established, celebrating its 21st birthday this year. However, in late 2007 the Irving, Texas-based company, which has 45 hotels

and resorts across North America, embarked on a yearlong project to upgrade the program’s technology, swapping out old, largely internally developed components for MICROS-Fidelio’s OPERA reservation and prop-erty management system. Select Guest was then relaunched in April 2009.

“Essentially [the upgrade] helped us to have more detailed pro! le informa-tion for all our guests in the loyalty program and to better manage their needs based on that pro! le,” explains Jeff Smith, vice president, operations and loyalty services, for Omni. Like the Fairmont President’s Club, Select Guest is based on recognition rather than points, and Smith notes that today Omni can provide members with more than just a speci! c room or bed type; pro! les now include preferences for amenities such as speci! c in-room ! tness equipment, for instance.

The new technology also has stream-lined Omni’s Select Guest record-keeping. Omni employs “Loyalty Ambassadors” to manage members’ needs, but before switching to the MICROS-Fidelio system, ambassadors had to pull, review and cross-reference a number of reports to do that job. Now, however, that time can be spent on more direct CRM.

“What used to take hours now takes minutes,” Smith says of the loyalty program’s paperwork. “It’s giving us more time to actually spend time with the guest face-to-face.”

Since Select Guest’s relaunch, its

active membership has skyrocketed from 350,000 to approximately 725,000 — a pace that exceeded Omni’s expectations, Smith con! rms.

More importantly, according to Caryn Statman Kboudi, vice president, corporate communications, both inter-nal and third-part guest-satisfaction surveys indicate that Select Guest members in particular are happier with Omni than ever before. She highlights Omni’s top ranking among upscale hotels by J.D. Power and Associates — an honor the company received this year for the fourth time. “For a midsize brand,” she notes, “that’s quite a recognition of our service levels.”

Small, but thinking big

Kiev, Ukraine-based Premier International is a smaller chain, oper-ating just seven properties under its flagship luxury brand, Premier Hotels, and its midscale Accord Hotels brand. In early 2009, the company decided to enhance its Premier Club loyalty program in an attempt to better com-pete with larger, international hotel chains entering the Ukrainian market. The upgraded program went beyond the discounts offered previously and allowed guests to choose whether to redeem points for discounts or other amenities such as free nights, meeting

A new Fairmont iPhone App introduced in

August now offers Fairmont President’s Club

members full access to their accounts.

58 HOTELS November 2010 www.hotelsmag.com

room use or spa treatments.A huge challenge, however, was

that Premier’s properties use differ-ent property management systems, making it dif! cult for the company to track guest activity, according to Tanya Podgoretska, sales and mar-keting director. Premier was relying on Microsoft Excel spreadsheets to calculate members’ rewards — “That was a nice experience,” Podgoretska jokes — until the company invested in CRM technology from Libra OnDemand, a cloud-based system that helped Premier centralize its data.

“Now we can open the pro! le of each guest and see all his stays in [our] dif-ferent hotels regardless of the PMS the property is using,” Podgoretska says.

In addition, Libra OnDemand’s online Customer Portal allows Premier’s loyalty program members to manage their accounts via Premier’s own Web site. “[Members] can enter the Customer Portal from the Web site and see all their history, and they can redeem their points by themselves,” Podgoretska explains. “And we can use the Customer Portal as a place for communication for special promotions or competitions that will involve guests more in the program.”

Also critical for a small company like Premier is the fact that the Libra OnDemand technology is relatively

affordable. According to Libra OnDemand CEO Gregg Hopkins, his company’s average customer pays just $12,000 to $20,000 annually for the type of CRM system Premier employs — a low price Hopkins attributes to the technology’s cloud-based nature. “We’re using Web 2.0 technologies,” he notes. “We can be a lot more nimble since we don’t have a big Java code that we can’t unlock or a big database.”

Although Podgoretska declines to discuss exact ! gures in terms of a cost-bene! t analysis for the Libra OnDemand technology, she does consider it money well spent in the management of the Premier Club, which now boasts approximately 3,000 members. “I cannot imagine how we would handle the program that we have now without this software,” she says.

Expanding horizons

It’s conceivable that the Libra OnDemand CRM system will become even more important for Premier International going forward, as the company plans to expand in the

Ukrainian market as well as elsewhere in Eastern Europe. “This [technology] will help us handle new properties and will save a lot of time and effort,” Podgoretska says.

Omni has expansion plans as well when it comes to Select Guest. As part of the Global Hotel Alliance, through which Omni is aligned with 13 other brands around the world, the company will debut in January a global loyalty program called GHA Discovery. The new program will allow Omni Select Guest members to enjoy their loyalty club bene! ts around the world. Statman Kboudi notes that if all the GHA Discovery brands did not share the same MICROS-Fidelio technology, such a worldwide loyalty program “would be virtually impossible.”

Forrester Research’s Harteveldt sug-gests that another expansion possibility for loyalty program-based CRM lies in the realm of social media. “If I were running a hotel loyalty program, I’d ask my members to share their Twitter or Tumblr pro! le names with me so that I could follow them. I’d encourage my members to ‘like’ my brand on Facebook, and track public conversa-tions on social-networking sites to measure sentiment. … A few — but only a few — hotels do this.”

Fairmont’s Richardson sees oppor-tunities in delivering more relevant content to loyalty club members. For example, when a guest who’s a sports fan arrives in Toronto, there should be a message on the room’s TV about an upcoming Blue Jays game and how to get tickets through the concierge.

“We don’t have time for irrelevance,” Richardson says. “[Hotels] can act as a facilitator and a provider of content. It’s an extension of personalization.”

Ukraine-based Premier International, whose

seven properties include the Premier Palace in

Kiev, used Libra OnDemand CRM technology to

upgrade and better manage its Premier Club

loyalty program.

TECHNOLOGY: CRM

“If I were running a hotel loyalty program,

I’d ask my members to share their Twitter or Tumblr

profi le names with me so that I could follow them.”– Henry Harteveldt, Forrester Research Inc.