Article about Premier Hotels in 'Hotels' Magazine

THE MAGAZINE OF THE WORLDWIDE HOTEL INDUSTRY

SEPTEMBER NOVEMBER 2010

Hoteliers World of the

TECHNOLOGY: CRM

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THE CLUB 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

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When 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 understanding 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 company’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

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a tremendous amount of business for us,” Richardson confirms.

Effective CRM can equal a tremendous 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 efficiencies 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 confirms. “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 provided at turndown, for example — rather than points, which necessitates both the need to collect information from members and the ability to use it.

Richardson explains that the technological infrastructure behind the program — a combination of proprietary elements developed internally and off-the-shelf components — has not changed much during FPC’s first 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 benefits both Fairmont and its guests, Richardson confirms. “We can push our messaging on an app like that,” he notes. “Plus, it [represents] convenience and efficiency 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, Texasbased 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 MICROSFidelio’s OPERA reservation and property management system. Select Guest was then relaunched in April 2009.

“Essentially [the upgrade] helped us to have more detailed profile information for all our guests in the loyalty program and to better manage their needs based on that profile,” 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 specific room or bed type; profiles now include preferences for amenities such as specific in-room fitness equipment, for instance.

The new technology also has streamlined Omni’s Select Guest recordkeeping. 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

A new Fairmont iPhone App introduced in August now offers Fairmont President’s Club members full access to their accounts.

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

More importantly, according to Caryn Statman Kboudi, vice president, corporate communications, both internal 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, operating 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 compete 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

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TECHNOLOGY: CRM 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.

room use or spa treatments.

A huge challenge, however, was that Premier’s properties use different property management systems, making it difficult for the company to track guest activity, according to Tanya Podgoretska, sales and marketing 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 profile of each guest and see all his stays in [our] different 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

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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 figures in terms of a cost-benefit 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 benefits 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 suggests 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 profile names with me so that I could follow them. I’d encourage my members to ‘like’ my brand on Facebook, and track public conversations on social-networking sites to measure sentiment. … A few — but only a few — hotels do this.”

Fairmont’s Richardson sees opportunities 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.”

“If I were running a hotel loyalty program, I’d ask my members to share their Twitter or Tumblr profile names with me so that I could follow them.”

– Henry Harteveldt, Forrester Research Inc.