Juston Parker President/CEO Parker Hospitality Group, Inc.

Eye for Travel

CRM in Travel Europe 2007
CRM and RM
Maximizing revenue through understanding the guest

CRM and Revenue Management Todays Objectives

Can RM and CRM can be integrated in a mutually beneficial relationship? Ensure that CRM and RM work together to increase customer loyalty See how integrating loyalty programs with PMS and RM models can boost sales Can Revenue Management be used to target specific consumer groups and isolate high value consumers? How can you reward guests for planning ahead? How can forecasting can be utilized to promote unsold inventory to certain customer segments at specific times to generate additional revenue

CRM and Revenue Management

Customer Relationship Management is key. Customer REVENUE Management = Customer REVENUE Optimization

CRM and Revenue Management

Contribution
The value that the customer generates in terms of revenue

Commitment
The longer term value of a customer & wallet share

Championing
The customers belief in the brand & communication to others

CRM and Revenue Management Strategic Travel Management

Strategic Identification Demand Forecasting Pricing Channel Management Ancillary Revenue Performance Analysis

CRM and Revenue Management Strategic Identification

What is the supply? What is the demand? What is the price? What is your role in the market?

CRM and Revenue Management Demand Forecasting

Who is buying?
What percent of guests travel alone? With a family? With a group? What percent of guests are local/regional? What percent traveled to your market? International? Family?

What are they buying?

What room types? What additional services or amenities do your guests buy? When are guests staying at your property? For how long? When do most guests book their room?

Why are they buying?

What purpose does the guest have for staying in your market? What purpose does the guest have for staying in your hotel?

CRM and Revenue Management Pricing

Price is what people pay Value is what people get

CRM and Revenue Management Pricing

Create a buying environment
Put the product in front of the segments you identified that they value and let them buy versus trying to sell a destination Strategic Identification and Demand Forecasting come together

CRM and Revenue Management Pricing

Proactive pricing is both strategic and tactical. You must have a plan in place to optimize both to optimize revenues!

CRM and Revenue Management Creating Buying Environments

PMS
Profile elements

Sales & Catering System

Profile

PMS S&C CRS OTHER

CRS

Production elements

Production Align Management Customer Analytics

Other External System

Extract, Transform & Load

Data Hygiene

Loyalty Programme

CRM and Revenue Management Channel Management

Hotel Guest

CRM and Revenue Management Channel Management

Web 2.0 OTAs

People

Hotel

Guest
Internet

CRM and Revenue Management Channel Management

Web 2.0 OTAs

People

Hotel

Guest
Internet

CRM and Revenue Management Pricing/Channel Management

Process of customer selection
MODEL A MODEL B MODEL C

customer data

current program members

modelling and profiling of members

RULES

model testing (test set), final model

vs.
Mailing (2x10,000 traditional) Mailing (1,000 Data Mining) selection of top-targets

additional business rules

application of model to non-members

CRM and Revenue Management Ancillary Revenue

Wallet Share
Additional spend Tracking profitability Identifying strong segments

CRM and Revenue Management Performance Analysis

What did we expect to happen? What actually did happen? What did we do well? What can we do better? How can we learn from what occurred?

CRM and Revenue Management Case Study

40 property upper scale/luxury management company

Situation

A hotel management company with 40 properties had no affinity program and felt they were leaving money on the table with ineffective cross marketing and targeted segmentation of guests. Developed a series of collections and implemented affinity branding and marketing on the individual collections. The brand was divided into several collections golf, beach, city, conference, etc. The collections each created their own SOPs around tracking affinity for the program to develop a starting point of what the guests actually valued. Each collection implemented their own affinity program to meet the needs of the guests. For example the golf group did a program around golf stays and spend. The beach collection did a program around summer stays and then cross marketed to off season. Then promotions were run in conjunction with cross collections based on need periods.

Response

CRM and Revenue Management Case Study

Action Step 1

Desired outcomes were determined at the corporate level and the collections were developed based on review of high level and micro-segmentation of guests. Data collection was completed through CRM data management system and then scrubbed for desired collection identification. The hotelier implemented a process of evaluation of the market demands and review of the guest needs, requests and value of the product. In addition, the collections were evaluating A-List guests based on total spend and room night and comparing with other collections for opportunities to offer affinity programme. Each collection implemented their own affinity programme based of the micro-segmentation of guests. In addition, corporate was tracking all newly collected and scrubbed data to implement cross marketing strategy for collections and identification and targeting of A-List guests.

Action Step 2

Action Step 3

CRM and Revenue Management Case Study

First year returns for the beach collection (consisting of 6 properties) saw an increase in room nights of nearly 5% over the market set and guest spend of 45% over the market set. In addition, they discovered that the member guest spent an average of 1.3 nights more than the non-member guest at the property per stay. They also noticed that the conversion of their member guest in off season increased by in excess of 45% when targeted marketing was applied. All actions for the beach collection recognized an improvement of $2.35 in GOPPAR from year to year (year 12) based on member tracking over non-member spend. This equated to approximately $617,000USD in GOP from the member spend.

Results

The other collections saw similar results with the Spa collection (4 properties) seeing improvement of ancillary spend in excess of $350,000USD over the prior year and the resort collection (14 properties) seeing an improvement of nearly $2,000,000 top line spend.

Thank you!

Juston Parker
President/CEO Parker Hospitality Group, Inc. juston@parkerhospitality.com