At the Americas Lodging Investment Summit (ALIS) Conference in Los Angeles, much of the focus, not surprisingly, was on technology and connectivity with employees and guests. I sat down with Michael Bennett, SVP Global Marketing and Business Development for CENDYN, to discuss some of the latest trends and what is emerging in the technology space. Michael has been in the digital arena for more than 20 years and was most recently VP Marketing at White Lodging, overseeing both existing urban assets and their forthcoming lifestyle/independent properties.
We spoke about the current space and how we are seeing investment in digital up across the board — not only in marketing dollars, but in customer experience improvement. Our conversation shifted to the independent hotels and a bit of David versus Goliath analogy. Of course, they will never have the size or scope of budget that the large brands have, but that can be an advantage. It’s much harder for a brand to be hyper local and really understand each customer, let alone the surrounding areas of a hotel. With the right investment in customer relationship management (CRM) and data-driven marketing, the smaller “David” hotels can ultimately communicate directly with the customer and shift from the high commission online travel agencies (OTAs) to the more profitable direct channels.
What are your key take-aways from ALIS?
It’s a game of wait and see. There is a lot of anxiety around what the new administration’s policies will do (or not do) for travel into the United States. From a technology stand point there was a lot of talk about “intent” data and that’s where the future is. We have been thinking about that and have had strategies in place for years now, so it’s great to hear it being discussed at the ownership/C-level.
There was a mixed bag of 2017 expectations at ALIS. What are you and your clients expecting over the next 12 months?
Generally, everyone is cautious, at least in North America. We see a lot of movement and excitement in the EU and APAC. Our clients continue to grow investments in digital media dollars and technology. Our CRM platforms are definitely the hot topic at every budget table as they significantly increase the ROI on their digital media spends. We are also having a lot of conversations around group digital marketing and how that can increase both the awareness and profitability of that business.
According to experts at ALIS, there are currently four connected devices for every human being in the world. That number will increase to seven per person by 2020. What are some emerging trends that hoteliers are doing to impact the guest experience given these trends?
I wouldn’t call it a trend, but you see major investments in the brands’ mobile apps, in-room ability to use your own devices and content development. I say “not a trend” because I think as hoteliers we are just catching up to what today’s consumer expects. With that said, I believe we are on the right track and I’m excited to see how it progresses over the next 12 months.
What are the most important opportunities for hoteliers wanting to impact their employees’ experience via digital?
It’s all about service and recovery. It amazes me how many hotels invest in ORM and don’t proactively use it. They will review GSS [guest satisfaction surveys] internally and respond, all the while customers are tearing them apart on TA [TripAdvisor], the OTA’s and even their brand.com sites. Part of that comes with an incentive model in our industry. Many hotels and management companies incentivize their executive teams on GSS scores and do not factor in their online reputation. Until it hits their pocket book, you aren’t going to change that behaviour for the most part. If you empower your teams at desk, banquets, housekeeping, etc., to use the ORM [online reputation management] and social data out there to get in front of a guest issue and address it before they leave, that’s how you build real loyalty and truly improve CLV [customer lifetime value].
“Knowing your customer” is a no-brainer, but how can we do so in a cost-efficient manner?
Here’s my shameless plug for Cendyn. You find a partner that has solutions at all levels and truly understands hospitality. Take CRM, if you have a single hotel, we have a cost-effective solution; if you have 100 hotels, we have an enterprise solution. And, in both cases, we have a best-in-class, 100+, pre-built connections in place for PMS [property management systems], CRS [central reservations systems], POS [point-of-sale], etc. When you have a solution like this in place, you can add-in loyalty, email and look-a-like modelling with your digital media investment – all which make “knowing your customer” a lot easier. And, you will drive a lot more “direct” revenue.
Finally, what’s the one thing in our industry to which owners should pay more attention?
Channel management and the cost of distribution. Cindy Estes-Green, CEO and Co-Founder, Kalibri Labs, LLC, has done a great job of driving awareness, but there hasn’t but much action on it at the hotel level. We love talking about segmentation, but when is the last time you’ve heard a revenue manager say, “We really should be investing more in digital marketing because the NetADR for that channel is $10 higher than the rest and we get 40% of our business from that channel.” Never, right? The reality is most hotels have cut everything they can on labour and hard costs, but haven’t taken the deep dive on what their channel mix is and what it actually costs all-in to sell a single room on any given night. We believe there is a massive opportunity ahead of us to layer in channel modelling, analysis and recommendations within our digital marketing suite. In early product testing, we are seeing a mass amount of hidden costs, be it commissions, brand fees, software, etc., buried in these channels. What if you could not only see these costs, but then model your marketing expenditures to impact the channels that drive the highest NetADR, thus improving the top AND bottom lines? That’s the future of digital marketing. And, by the way, that even blurs the line between digital marketing and revenue management more. One can’t function without the other – as hoteliers, we need to embrace that.