Hotel Online Special Report


We're Not In Kansas Anymore 

Differentiating your hotel
through technology

Mark Haley is a regular contributor to Hospitality Upgrade magazine.To view more articles covering technology for the hospitality industry please visit the Hospitality Upgrade Web site or to request a free publication please call (678) 802-5303 or e-mail
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].

©Hospitality Upgrade, 2003. No reproduction or transmission without written permission.

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Also See: Understanding the Power of Customer Relationship Management / Neil Holm / Hospitality Upgrade Magazine / November 2003
The Case for Self Service in Hospitality / Marvin Erdly and Amitava Chatterjee / Hospitality Upgrade
Magazine / October 2003
Five Questions to Ask Online Distributors / Michelle Peluso / Hospitality Upgrade Magazine / October 2003
Surf's Up - Internet Marketing for Destination Properties / Marvin Erdly and Amitava Chatterjee / Debra Kristopson / Hospitality Upgrade Magazine / October 2003
Wireless Changes Everything; So, do ya want a latte with that or what? / Jocelyn Valley / Hospitality Upgrade Magazine / June 2003
Customer Awareness or Customer Beware? Data Security in a CRM-Obsessed Industry / Elizabeth Ivey / Hospitality Upgrade Magazine / June 2003
Your Magnificent Selling Machine Would you Prefer Your Hotel to Get: the Web Hit or the Phone Call? / Robert Camastro / Hospitality Upgrade Magazine / June 2003
Tradeshows & Economic Soldiers / Dan Phillips / Hospitality Upgrade Magazine / April 2003
Hotel Telecommunications in the 21st Century / Geoff Griswold / Hospitality Upgrade Magazine / March 2003
The ABCs of CRM  / Mark Haley & Bill Watson / Hospitality Upgrade Magazine / March 2003
Getting the Most out of Your IT Investment / By: Clay B. Dickinson / Hospitality Upgrade Magazine / Fall 2002
The Role of Paper in a Digital World / By: Bill Fitzpatrick / Hospitality Upgrade Magazine / Fall 2002
The Rotten Pineapple (international symbol of hospitality) / By: Steve D'Erasmo / Hospitality Upgrade Magazine / Fall  2002
Focusing on Labor Can Improve More Than Just Cost / Hospitality Upgrade Magazine / Summer 2002
Attention Hotels - An Ounce of Prevention is Worth a Pound of Cure / Elizabeth Lauer Ivey / Hospitality Upgrade Magazine / May 2002 
HOSTEC - EURHOTEC 2002 - Room for Improvement / Christel Dietzsch / Hospitality Upgrade Magazine / Feb 2002 
Technology and the Human Touch / Dan Phillips / Hospitality Upgrade Magazine / Spring 2002
Wireless Technology:  Where We Have Been, Where Are we Going? / Geneva Rinehart / Hospitality Upgrade Magazine / Spring 2002
Effective Customer Relationship Management (CRM) Implementations / John Schweisberger and Amitava Chatterjee, CHTP / Hospitality Upgrade Magazine / Fall 2001 
What's Up With Call Accounting Systems (CAS) / Dan Phillips / Hospitality Upgrade Magazine / Fall 2001 
Technology Dilemmas: What have IT investments done for you lately? / Elizabeth Lauer / Hospitality Upgrade Magazine / Summer 2001
Full Circle from Centralized to ASP - The Resurrection of Old Themes and a Payment Solution / Gary Eng / Hospitality Upgrade Magazine / Summer 2001 
A High Roller in the Game of System Integration / Elizabeth Lauer / Hospitality Upgrade Magazine / Spring 2001 
CAVEAT EMPTOR! Simple Steps to Selecting an E-procurement Solution / Mark Haley / Hospitality Upgrade Magazine / Spring 2001 
Your Bartender is Jessie James and He Needs to Pay for College / Beverly McCay / Hospitality Upgrade Magazine / Fall 2000 
Choosing a Reservation Representation Company / John Burns / Hospitality Upgrade Magazine / Spring 2001 
Understanding and Maximizing a Hotel�s Electronic Distribution Options / by John Burns / Hospitality Upgrade Magazine / Fall 2000 
The Future of Electronic Payments - From Paper to Plastic and Beyond / J. David Oder /  Hospitality Upgrade Magazine / Summer 2000
Timeshare Technology Steps Up / by Elizabeth Lauer / Hospitality Upgrade Magazine / July 2000 
Biometric Payment: The New Age of Currency / by Geneva Rinehart / Hospitality Upgrade Magazine / Mar 2000 

Contact:

Geneva Rinehart
Associate Editor
Hospitality Upgrade magazine 
and the Hospitality Upgrade.com website
http://www.hospitalityupgrade.com
[email protected]


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