by Mark Haley, January 2004
Sometimes, you simply
know that you have arrived somewhere different, somewhere unique, just
like Dorothy did when the tornado dropped her off on the Wicked Witch.Many
hotels and hotel companies strive for this sense of differentiation employing
a variety of strategies.Doormen in formal topcoats
are one way. Opulent décor with elaborate floral presentations set
amid marble, gilt and original artwork is another.Extraordinarily
high service levels with butlers on each floor yet another.A
signature restaurant offering a regional or specialty cuisine works as
well.
Some hoteliers
have pursued technology as a means of differentiation.The
business logic supporting this strategy strengthens as technology becomes
more important to our guests and meeting planners for their business and
professional reasons.Many baseline elements of technology
offerings are no longer differentiators (voice mail and telephone modem
jacks, for example) but simply part of the price of entry in the marketplace.Some
are differentiators today, but rapidly heading toward commoditization.High-speed
Internet access (HSIA) is one example.
The key thing
here is that numerous hotels and hotel companies see technology as a crucial
differentiator and apply it as a strategic weapon in the marketplace.The
objective of this strategy is to take customers away from competitors and
increase return visits by guests that experience the benefits.
Let�s examine
some of the principles of employing technology as a differentiation strategy:
Make
It Obvious � If you are
making technology-based services a part of your value proposition to your
guests, don�t keep it a secret!Make it obvious throughout
the property that you are offering these services.In
short, tell everyone that this is what you do by doing it consistently
throughout the property.
A visitor to Boston�s
Seaport Hotel, for example, will find public Internet access computers
in the lobby, real-time reader board displays, browser-based information
screens in the elevators, digital telephones in the guestrooms and wall-mounted
Ethernet jacks over the desks.The visitor will also
likely see people using Wi-Fi services in the public spaces as well.According
to Steven C. Bearden, VP development for Fidelity Capital, the hotel�s
owner, �The Seaport Hotel was conceived from the ground up to offer state-of-the-art
technology to our guests, knowing that easy access and use of technology
is important to our target clientele.Providing these
services more effectively than competitors drives our high return patronage
rate.�
Keep
It Current � Technology is a
rapidly changing environment with very rapid cycles from early adoption
to established tools.Within this environment, budgets
must support implementing new technology and also include maintenance and
upgrades rather than a one-time investment.Omni Hotels
is currently deploying wireless Internet access throughout their owned
and managed hotels.The aggressive implementation
cycle is on schedule for completion in the first quarter of 2004, but for
Omni, installs are the beginning, not the end.Notes
Paul Dietzler, Omni�s Senior Vice President of Finance and Information
Technology, �Having executed a successful roll-out, we are planning upgrades
in 2005.In the meantime, we intend to monitor the
rapidly evolving wireless standards and service offerings for additional
opportunities to provide value to our customers.�
Think
Carefully About Pricing � Be
cautious about what services you charge for, especially in the guest room.Although
guest-facing technology is not inexpensive to deliver (especially on a
retrofit basis), one needs to carefully consider the impacts of charging
guests incrementally for every service.Consumer backlash
against the hotel industry�s telephone pricing policies is one of several
factors that drove the decline in telephone revenue.
When people
think they are being nickel-and-dimed, the entire experience becomes devalued,
impacting loyalty and repeat patronage. This
understanding of customer requirements is why the Seaport Hotel, among
more and more others, does not charge per use for HSIA services in guestrooms
or public spaces.
When Craig
Farrington, director of operations for Tage Inns & Suites, was overseeing
the development of the TageInnManchesterAirport,
he made an early decision to offer complementary high-speed Internet access
in every room.�The Tage Inns experience means value.One
value we offer is including wired and wireless Internet access in the room
rate.None of the competitive set can offer that experience
and their customers are now ours.�
One approach
to reconciling the dilemma between funding technology services and not
�charging by the drink� is to bundle a package of upgraded amenities into
room types available at a higher rate.These amenities
might include free telephone service, Internet access, a better desk and
so on, in addition to bathrobes and continental breakfast.
Most of the
major brands have such room types labeled Executive Room, Concierge Level
or some similar category.These rooms typically earn
rate premiums ranging from $20 to $50.While usually
a major brand initiative, smaller brands and independent properties can
certainly take advantage of the same strategy�and $50 a night will buy
a lot of technology.
Other bundling strategies
in the market include:
-
Bundling several technology amenities into
a single flat-rate, such as unlimited Internet access, local and long distance
telephone service at $9.95/day
-
Tying complementary Internet access to membership
or status in a chain�s frequency program.
This section could
be titled �Beware the Revenue Share.�Although revenue
share agreements have a long tradition in hospitality technology, notably
in in-room entertainment, hoteliers need to recognize that signing a revenue-share
deal removes the hotel�s ability to flex pricing according to the needs
of the market or for high-value customers.This flexibility
can be important, especially for key customers that place a high value
on a given amenity.
Service,
Service, Service � The historical
mantra for hotels has long been location, location, location.Relative
to technology, however, consider service, service, service.Offering
a technology-based service to guests states a commitment to making it succeed.The
hotel must have an effective mechanism for supporting guests with technology
services.Some properties rely on trained hotel staff,
while others utilize vendor resources.What you
cannot do is ignore the need to make support available.
Meeting
Planners Matter � The necessary
corollary to service, service, service is the need to support the crucial
meeting planner segment effectively.Meeting planners
are more service-sensitive than price-sensitive, and simply cannot tolerate
a failed Internet connection or videoconference.More
so than guest room technology, technology services sold in the meeting
rooms need to be fully supported and supportable.
Mark Haley is a Partner at The PrismPartnership,
LLC. Prism is a consulting practice servicing the global hospitality and
travel industries based in Boston, 978-521-3600 or http://ThePrismPartnership.com.Email:
[email protected].
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