Hotel Online  Special Report

 Five Major Innovations for Your Hotelís Performance
Technology Innovations Designed to Positively
Impact Your Hotelís Bottom Line
By Tim Henthorn, February 2006

Over the last 10 to 15 years, technology has changed dramatically in the hotel industry.  Letís take a closer look at five different innovations and their impact on hospitality.  These five innovations offer solutions that leverage the power of the Internet and software technologies.  They also create opportunities for new revenue, reduced costs, improved productivity, heightened guest service, and a more holistic view of your hotel and its customers.  While it is always difficult to know when to make technology investments, these opportunities offer higher than average returns for most hotels.

Five Major Innovations

1) Web Site Reservations with an Internet Booking Engine (IBE):

There are many solutions available that enable your customers to make reservations at your hotel right on your own web site.  These solutions can be stand-alone software packages, optional modules available with various Property Management Systems (PMS), or extensions to Central Reservation Systems (CRS).  There are inexpensive solutions available to Inns, Bed & Breakfasts, and Motels.  Most Property Management System vendors now offer integrated modules to extend their software and handle your online web reservations.  Finally, most CRS companies offer solutions that can handle web site reservations as well as integrate with your PMS.

The statistics on web reservations are impressive.  Roughly one quarter of all reservations occur online, and the channel continues to grow rapidly.  For those hoteliers still wondering whether they need to put their hotel online, the answer is easy Ė get online fast.  Listing your hotel online is more important than being in the phone book in todayís electronic world.

Getting your hotel online will drive a return, but you may need to test various marketing and advertising opportunities to see what works for your hotel and your customer base.  Donít expect to put reservation capabilities on your web site and start counting money.  There is a significant learning curve to driving consumers to your web site.  Get started as soon as possible and get familiar with the online environment.  It is a lot more complex than buying a listing in the phone book.  There are completely new tactics you will need to use to get your hotel exposure, drive the consumer to your hotelís site, and convert them into a guest.

2) Web Site Marketing

In becoming a significant channel for reservations, the Internet has lived up to most hotelsí expectations, and the industry continues to work hard to create an infrastructure to support this rapidly changing channel.  Now more than ever, a hotel has numerous ways to reach the individual consumer.  In fact, an entire industry built around Search Engines has grown to help businesses market their services directly to consumers more cost effectively.

So with a web site and a Hotel Internet Booking Engine in place, what is next?  Well, it is time to attract consumers to your web site.  You should partner with a company with specific experience in Hospitality Internet Marketing.  There are a number of good companies out there designed specifically to help you achieve this goal.  They typically offer a number of services that range from marketing your web site in search engines with search engine optimization (SEO) and pay-per click advertising (PPC), to using a linking strategy and e-mail marketing.  Each of these tools attempts to expand the visibility of your web site and get you in front of all those consumers researching their travel options online.  Once you find a partner, get involved with them and actively manage the work they do for your hotel.  This level of involvement will maximize the value of your partnership and enable your hotelís employees to learn about this new type of marketing.

Since about a quarter of all hotel reservations occur online, you should be looking for ways to increase your hotelís exposure in online channels while minimizing your distribution costs.  Driving potential guests to your hotelís web site will do just this.  You may pay more for marketing out of your own budget, but your overall distribution costs will be lower.  In addition, you can engage your customers on many levels, since you control the content they experience on your web site.  For example, you can foster a relationship with your customers by sending them a newsletter, marketing to them through e-mail, or even allowing them to customize their upcoming stay with you through online tools.  This relationship can start with a visit to your web site and grow over time.

Using solid online marketing techniques will drive traffic to your site, and then it is up to your hotelís team to maximize the conversion rate of your visitors.  As volume grows and your marketing costs decrease per reservation, your overall distribution costs will drop below most other channels.  You will never move all traffic to your web site, but building a stronger relationship with your more loyal customers will prove valuable.

3) Software with Multi-Function Support:

The amenities offered at many hotels continue to change to meet new consumer demands and wishes.  Systems to support these services are transforming business processes and operations, making it more feasible to deliver additional services without large investments in labor.

Many Property Management Systems have expanded the number of functions they can support across your hotel operation.  There are now multiple examples of systems that offer modules for managing core reservations, Point-of-Sale, Sales and Catering, Spa, and more.  These solutions enable you to tie together previously disparate systems and sets of customer information.  With this power, you are able to understand more about your guests and what they want from a stay at your hotel.

If your hotel has adjusted its services or amenities over recent years to keep pace with its guests, you may want to revisit how well your hotelís systems can help you meet the needs of your guests.  Property Management System vendors have worked to streamline activities that used to take multiple steps.  Cancellations of rooms reservations at the hotel may impact reservations at other locations across your property Ė like the spa or health club.  Linking these transactions can help productivity, ensure processes are followed, and seamlessly tie together all of a guestís requests.

Saving time and improving how well you understand your guests are natural outcomes from upgrading or replacing your core systems.  If it has been more than five years since your last system investment, now might be a good time for both productivity and economic reasons.

4) Improved Productivity & Guest Service:

Just about every system in the hotel impacts the service delivered to guests.  For example, Property Management Systems are responsible for a number of guest interaction points.  The software companies that deliver these solutions continue to enhance their ability to support best practices in customer service.  Over recent years, user interfaces have changed to leverage the graphic abilities of the Windows operating systems.  Drag and drop features now exist to handle many processes that previously required multiple steps.  Even hotels upgrading from an earlier PMS version on Windows can benefit from these more recent advancements.  Those hotels still waiting to upgrade from a DOS system are in for an enormous improvement in both productivity as well as the service level they can deliver to their guests.

These functionality improvements can shorten the front desk experience, when the hotelís service capabilities impact the customerís time.  They can help track messages or special requests that previously required more manual processes.  They can help simplify the splitting, merging, or reassigning of folio charges, which historically required multiple steps.  Most of todayís systems offer simplified processes to improve productivity.

An investment in this area will help you keep your labor costs in check, as well as allow you to keep pace with new services offered by competing hotels in your local market.  By using a system that is five years old or more, you are likely sacrificing a level of productivity that is impacting your success in the marketplace.

5) CRM & Guest Centric Systems:

First, letís define CRM.  Customer or Guest Relationship Management is the art of understanding your guests across pre-sale, sale, stay, and post-stay related interactions, and applying this new knowledge to improve your overall business.  A combination of technology and processes are used to execute these improvements.

Each of the above technology advancements supports the concept of Guest Relationship Management on some level.  As you put more of these tools in place for your hotel and tie them together, the better your understanding of your customer will be.

While marketing to these customers, your hotel will create a better understanding of their travel research and shopping habits.  With customers booking directly on your web site, you will see more about their actual buying preferences and thus learn how you can adjust your offerings.  Tracking a guestís activities and buying behavior while at your property gives you a better perspective on their service requirements.  Tying all of this information together will help you enhance all business processes from initial marketing to post-stay interactions.

About the Author: Tim Henthorn is the Managing Director of Software Strategy (  Software Strategy delivers practical technology information and research to help hotels understand their Hotel Software and In-Room Technology options.  The Software Strategy web site lists available solutions from across the industry and offers a place where hoteliers can easily learn which solutions will meet their most critical business needs.
Tim Henthorn
Phone: 773-551-2088

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