Spinning Straw 
into Gold
By Cindy Estis Green, May 1999

A couple walked into the Sanderling Inn Resort & Conference Center on March 6, 1998. They checked in. The desk agent asked if they would like the same room as they had last year. They stayed for three nights and had a great time. Spent an average of $300 per night. Swore they would come back again. This happened forty times between 1996 and 1998 with forty different couples. What linked these families? What is it about this incident that made it so important to the resort management?

These guests come from Cary, NC. There are 449 families in Cary, NC that have been identified by Sanderling management as having the resources and inclination to choose a getaway at their resort. So far, they have 40 of them as their customers. The goal for 1999? Another 40.

How did they know that? How could they pinpoint their potential customers with such precision? How can a resort find other towns like Cary, NC to target that has similar likelihood of having sufficient households with a propensity to spend upwards of $300 per night in the resortís various revenue centers?

Itís called Database Marketing and several hotels and resorts have made a serious commitment to its art and science. Sanderling had their PMS vendor create an extract file for Pegasus Business Intelligence (formerly Driving Revenue), a service of Pegasus Systems, Inc. Pegasus Business Intelligence took the folio, TA and other data and built a marketing database. The data was not just consolidated into a relational database. It went through an extensive cleaning and transformation process in which the source data from the PMS is cleaned, standardized and dozens of statistics and outside data such as demographics and psychographics are added to enhance the raw data.

It is this part of the analysis that led The Sanderling Inn Resort & Conference Center to Cary, NC. Did they know Cary was in their feeder market area? Of course, they did. They also knew the population of Cary, NC is 165,000. How could they have figured out which 449 they should target? In the old days (before their database), they would have bought a list of 5000 names of upper income residents of several towns, including Cary. Now they can narrow their focus to the 449 most likely to convert. This move is much cheaper, much smarter and a lot more effective.

And it does not end there. So once Sanderling knows who they want to target, they want to track the conversion rates for each promotion. Itís not enough to know that 5% of the target market made a reservation after receiving the Sanderling offer. It is critical to know what the demographics are of those 5% and how they differ from those who got the offer and did not respond. And it is equally important to track how many times anyone was made an offer and decide how many times they should be approached before they are removed from the promotional lists. Who likes two-for-one offers and who prefers fourth night free? All of this is done through the Pegasus Business Intelligence database service to which Sanderling subscribes.

In this day and age of relationship marketing, one-to-one marketing is the buzzword. But what is the reality in the hospitality industry? Itís a technique that requires investment in marketing and technical resources and it is very specialized. Itís not about buying software. Its about having the support to conduct the analysis and stick with the promotional efforts every season to constantly build the intelligence to know who should be approached for each offer, for each need period.

Once the data is run through the specialized data transformation system, it is ready to be
put into a database to undergo marketing analysis.
About Pegasus Systems, Inc.

Pegasus Systems, Inc. provides electronic distribution technology solutions to hotels, travel agencies, meetings and convention planners and corporate travel departments around the world. The Pegasus Electronic Distribution hotel room reservation services including TravelWeb.com improve the efficiency and effectiveness of the reservation process by enabling travel agents and individual travelers to electronically access hotel room inventory information and conduct reservation transactions. The Pegasus Commission Processing service improves the efficiency and effectiveness of the commission payment process for participating hotels and travel agencies by consolidating payments and providing comprehensive transaction reports. Pegasus Business Intelligence provides database marketing and consulting services and is being expanded to provide data mining and reporting services for benchmark analysis and strategic planning for the hotel industry. Pegasus Systems' customers include nine of the 10 largest hotel companies in the world based on number of rooms and four of the five largest travel agencies in the U.S. based on gross sales. Pegasus Systems has its headquarters in Dallas, and offices in London. The companyís stock is traded on the Nasdaq National Market under the symbol PEGS. 


Debbie Estis
Vice President, Sales 
Pegasus Business Intelligence 
214-523-9430, debbiee@pegsinc.com
Cindy Estis Green
Sr. Vice President 
Pegasus Business Intelligence 
214-523-9425, cindyg@pegsinc.com

About Pegasus Business Intelligence
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