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Eye for TravelCRM in Travel Europe 2007

CRM and RMMaximizing revenue through

understanding the guest

Juston Parker

President/CEOParker Hospitality Group, Inc.

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CRM and Revenue ManagementTodays Objectives

Can RM and CRM can be integrated in a mutuallybeneficial relationship?

Ensure that CRM and RM work together to increasecustomer loyalty

See how integrating loyalty programs with PMS andRM models can boost sales Can Revenue Management be used to target

specific consumer groups and isolate high valueconsumers?

How can you reward guests for planning ahead?How can forecasting can be utilized to promoteunsold inventory to certain customer segments atspecific times to generate additional revenue

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CRM and Revenue Management

Customer Relationship Management is

key.

Customer REVENUE Management =

Customer REVENUE Optimization

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CRM and Revenue Management

ContributionThe value that

the customer

generates in

terms of revenue

CommitmentThe longer term

value of a

customer & wallet

share

ChampioningThe customers

belief in the brand

& communication

to others

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CRM and Revenue ManagementStrategic Travel Management

Strategic Identification

Demand Forecasting

Pricing Channel Management

Ancillary Revenue

Performance Analysis

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CRM and Revenue ManagementStrategic Identification

What is the supply?

What is the demand?

What is the price?

What is your role in the market?

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CRM and Revenue ManagementDemand 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?

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CRM and Revenue ManagementPricing

Price is what people pay

Value is what people get

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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

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Proactive pricing is both strategic and

tactical.

You must have a plan in place to optimize

both to optimize revenues!

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Align Management

Customer Analytics

Loyalty Programme

Sales &Catering

System

PMS

CRS

Other

External

System

Extract,Transform

& Load

OTHER

CRS

S&C

PMS

Data Hygiene

Productionelements

Profile

elements

Production

Profile

CRM and Revenue ManagementCreating Buying Environments

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CRM and Revenue ManagementChannel Management

Guest

Hotel

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Guest

Hotel

Internet

Web 2.0

OTAs

People

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Guest

Hotel

Internet

Web 2.0

OTAs

People

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CRM and Revenue ManagementPricing/Channel Management

MODEL A

MODEL B

MODEL C

modelling and

profiling ofmembers

selectionof

top-targets

RULES

additionalbusiness

rules

Mailing(1,000

Data Mining)

Process of customer selection

customer

data

application ofmodel to

non-members

current

programmembers

Mailing(2x10,000

traditional)

vs.

model testing

(test set),final model

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CRM and Revenue ManagementAncillary Revenue

Wallet Share

Additional spend

Tracking profitability

Identifying strong segments

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CRM and Revenue ManagementPerformance 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?

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CRM and Revenue ManagementCase Study

A hotel management company with 40 propertieshad no affinity program and felt they were leavingmoney on the table with ineffective crossmarketing and targeted segmentation of guests.

Situation

Developed a series of collections andimplemented affinity branding and marketing onthe individual collections. The brand was dividedinto several collections golf, beach, city,conference, etc. The collections each createdtheir own SOPs around tracking affinity for theprogram to develop a starting point of what theguests actually valued.

Each collection implemented their own affinityprogram to meet the needs of the guests. Forexample the golf group did a program aroundgolf stays and spend. The beach collection did aprogram around summer stays and then crossmarketed to off season. Then promotions wererun in conjunction with cross collections basedon need periods.

Response

40 property upper scale/luxury management company

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CRM and Revenue ManagementCase Study

Desired outcomes were determined at the corporatelevel and the collections were developed based onreview of high level and micro-segmentation ofguests. Data collection was completed throughCRM data management system and then scrubbedfor desired collection identification.

Action Step 1

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, thecollections were evaluating A-List guests based ontotal spend and room night and comparing withother collections for opportunities to offer affinityprogramme.

Action Step 2

Each collection implemented their own affinityprogramme based of the micro-segmentation ofguests. In addition, corporate was tracking all newlycollected and scrubbed data to implement crossmarketing strategy for collections and identificationand targeting of A-List guests.

Action Step 3

CRM d R

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CRM and RevenueManagement

Case Study

First year returns for the beach collection (consisting of 6properties) saw an increase in room nights of nearly 5%

over the market set and guest spend of 45% over the marketset. In addition, they discovered that the member guestspent an average of 1.3 nights more than the non-memberguest at the property per stay. They also noticed that theconversion of their member guest in off season increasedby in excess of 45% when targeted marketing was applied.

All actions for the beach collection recognized animprovement of $2.35 in GOPPAR from year to year (year 1-2) based on member tracking over non-member spend. Thisequated to approximately $617,000USD in GOP from themember spend.

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

Results

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Thank you!

Juston ParkerPresident/CEOParker Hospitality Group, Inc.

[email protected]

crm and rm

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