Business agility is a top priority in the new normal. One thing we learned from recent events is just how many industries are at risk of disruption. From restaurants to retailers, no one was safe from the encroaching tide of uncertainty and the global whirlwind of lockdown measures. And yet, retailers could move online or offer click-and-collect services. Restaurants could turbo-charge their delivery game and engage a hungry, captive audience. How could hotels pivot?
To find out, Salesforce spoke with representatives from DIA and H-Hotels.com, who were joint winners of the Salesforce Partner Innovation Award in 2019. Let’s dig into some of their thoughts on where the hotel industry stands in the current climate.
Hotels are facing a series of complex issues that they couldn’t have anticipated just a year ago. They need to concentrate on delivering today, while also building business agility to meet tomorrow’s challenges.
Some issues that hotels can expect in the New Normal:
Meeting increased guest expectations: There’s no doubt that the expectations of guests have risen dramatically, as people now expect a more personalised, seamless, and meaningfully differentiated experience.
Addressing commoditisation risk: With the rise of digital-first OTAs (online travel agents), hotels are in danger of losing touch with their customers and becoming little more than a commodity provider.
Creating new revenue streams: With a shrinking number of leisure and business travellers, hotels are under pressure to increase ancillary revenue streams such as food and beverage, spa services, event planning etc.
With the hospitality landscape still shrouded in a fog of uncertainty, the hotels that thrive will be the ones that are the most innovative, the most agile, and the most ready to evolve to meet the market.
Jens Böcking, Head of Experience Management for DIA, says, “What we’ve seen from our clients during the crisis is that the ones who have prepared well from a digital perspective are more resilient.”
For instance, hotels that were able to quickly introduce digital room keys, online check-in, contactless interactions, and targeted customer acquisition and retention were in a much better position to succeed in the new climate.
“You need a strong system backbone in the form of a customer- and business-centric platform such as a Salesforce CRM.”
A recent H2C study reinforces the idea that CRM systems are particularly good at nurturing innovation and building business agility. Respondents stated that CRM platforms helped them identify marketing opportunities, strengthen relationships with guests, collect valuable data about customer preferences, and more. In the age of the digital imperative, having access to this kind of actionable data is crucial for providing creative, exemplary experiences.
For Böcking, this information also provides a competitive advantage. “Unique guest data is a very central point. You can do cross-selling, upselling. You can find out the guests’ remarks and recommendations, rather than giving it to the OTAs.”
Many hotels have yet to start their transformation, or even recognise that transformation is necessary. They’re still stuck in a pre-crisis world, furloughing staff and trying to stabilise their old business model.
It’s not easy to initiate change, especially in an industry that’s been operating in much the same manner for decades. Böcking has some suggestions for hotels that are having difficulty getting started.
What hotels should focus on when building business agility:
Mindsets: Take advantage of the current crisis to remove roadblocks to creative thinking.
Systems: Embrace a digital cloud ecosystem with an iterative approach.
Processes: Introduce digital processes to provide real-time information.
“CRM and big, business-driven processes still don’t seem tangible to many people”, Böcking says. “We are often confronted with hesitation. But you can break big projects down into simple steps. The first logical step is; you want to know your guest. You want to have the most possible information about your guest and leverage it. Once this contact information is enriched by data like newsletter preferences, customer journey, touchpoints in your hotel environment, you can drive their journey towards you. This is essential for creating a customer-centric business.”
For Andreas von Reitzenstein, Chief Commercial Officer for H-Hotels.com, the customer journey transcends the hotel environment. “Our goal is to look beyond the hotel business, and to provide our guests and customers with the best digital experience.”
H-Hotels.com had started its digital transformation with Salesforce well before the crisis, so they were in a better position to provide their users with an exceptional experience. Here are the 9 steps that Andreas von Reitzenstein and H-Hotels took to get where they are today:
Established a golden record of customer data
Implemented middleware solutions
Integrated PMS data
Introduced marketing automation
Implemented Advertising Studio
Utilised Audience Studio
Connected the loyalty programme to their CRM
Focussed on corporate sales
Used HR as part of the platform
“The next step for us is to connect B2B sales to Salesforce, and to connect human resources to the platform, using Salesforce as our main data platform,” von Reitzenstein states. “It was a long journey, but we fulfilled all the targets we had. We saw a 4.6x increase in consolidated guest accounts. We reached a 65% increase of opening rates for pre-stay and post-stay emails. Our lead conversion was 2.3x higher through personalised targeting based on refined segmentation.”
Not only did numbers improve across the board, but H-Hotels’s way of working also changed. They implemented new, faster, and more direct ways of communication. “We increased motivation and transparency,” von Reitzenstein says.
So, does Andreas von Reitzenstein have any advice for competitors who may be starting on their own digital journey?
“Better manage uncertainty and ambiguity – explore new ideas together. Create and sustain an openness to change. Clear priorities and deadlines are really important. And don’t forget – the guest belongs to the hotel, not the OTAs.”
With innovative trailblazers like Jens Böcking and Andreas von Reitzenstein leading the way, hotels are in good hands. And with an increased focus on outstanding customer journeys and better ways of doing business, their guests are as well.