Embracing Guest Centricity Over Transactions
The hospitality industry, renowned for its service ethos, is confronting a paradox. Despite the intent to tailor services for each guest, hotel management has fallen into a pattern that inadvertently inflates costs and erodes guest loyalty. This pattern, entrenched for over 15 years, stems from an outdated, transaction-oriented management framework.
Doug Rice, a distinguished figure in hotel technology, recently critiqued the stagnation of Property Management Systems (PMS)¹ in his piece for Hospitality Upgrade. Despite three decades, the core functionality of PMS has remained largely unchanged. While interfaces have evolved, the underlying processes have not, posing a significant roadblock to efficiency and personalization.
PMS may be the nerve center of on-site operations, yet the broader technological landscape of a hotel comprises numerous systems, all purporting to enhance the guest experience. The real question is: Are they succeeding?
Let’s consider the guest journey of a visitor as an illustration, starting from the hotel website to the point where hotels aim to retain or cultivate customer loyalty to enhance direct bookings.
A contemporary hotel website typically incurs a cost of approximately €30,000 or US$, along with monthly expenses ranging from 2 to 3 thousand for marketing, hosting, content creation, and other related activities. A tracking tool records the IP addresses of the visitors, and occasionally, a newsletter tool or a loyalty program endeavors to encourage sign-ups to convert the anonymous visitor into a potential guest profile. Now, let’s tally the number of profiles generated by our hotel example during the guest journey. The first one is now established!
The subsequent stage is ideally the booking process. To make a reservation, the guest must create a profile in the booking engine, which is then transmitted through the channel manager to the PMS. This results in the creation of three additional profiles for the same guest.
The third step involves the pre-stay phase. For simplicity, let’s exclude apps and upselling tools, and just consider a straightforward pre-stay message from the CRM, preferably with a registration card for a smoother check-in process. Now, profile number five is active.
Finally, the guest checks in at the hotel and hopefully avails some additional services. Let’s keep it uncomplicated by excluding table reservation systems, spa, golf, or concierge tools, not to mention communication apps for SMS or WhatsApp. This means we are only considering the essential systems: POS, housekeeping, and, of course, the WiFi. Consequently, we arrive at profiles six, seven, and eight.
A customary procedure today involves a guest survey post check-out. ORM tools nowadays not only monitor the web for feedback but also provide survey functionality. Profile number nine is now in existence!
The concluding phase in the customer journey is the loyalty aspect. If a loyalty program is in place, you end up with ten profiles for the same guest in multiple systems.
But what happens upon the guest’s return? Analysis by dailypoint™ across 4.5 million stays revealed a startling inefficiency: each returning guest, on average, had 2.3 profiles just within the PMS. This fragmentation epitomizes the transaction-oriented IT strategy that prevails across the guest journey.
The repercussions are manifold. Service and marketing efforts become fragmented and inefficient, data inaccuracies lead to flawed decision-making, and consumer rights regarding data—such as those mandated by GDPR—are difficult to uphold.
To pivot towards true guest centricity, the industry must embrace a unified approach. A central ‘golden record’ for each guest is paramount. No single solution can achieve this; rather, a symphony of best-of-breed applications, harmonized through powerful APIs and real-time data exchanges, is required.
These systems must converge on a single, central profile.
The conceptual framework for a guest-centric IT solution is straightforward: all systems along the customer journey must either utilize or synchronize with the central profile.
Creating and managing a central profile is an intricate endeavor. Success hinges on the minutiae—data quality management must be automated and operate in real-time. dailypoint has dedicated over 15 years to refining such processes, leveraging machine learning and AI for predictive analytics and valuable guest insights.
Interfacing is the second pillar of this strategy. Two-way interfaces must facilitate real-time data exchange, and a robust API infrastructure is crucial to enable seamless system integration.
The ‘golden record’ stands as the cornerstone of genuine hospitality success. A guest-centric IT approach is not just aspirational; it is essential. Leaders in the digital space, such as Booking.com, Amazon, and Uber, have already adopted guest-centric models. It’s time for the hospitality industry to follow suit.
In conclusion, the transition from a transaction-oriented to a guest-centric model is not just a shift in technology – it’s a renaissance in hospitality. Hoteliers must realign their strategies, invest in interoperable solutions, and prioritize the guest experience through technological unity. The future of hospitality is not just about meeting expectations; it’s about exceeding them through intelligent, integrated, and guest-focused technology.
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Sources:
1. Definitely Doug 11/3/23
About Dr. Michael Toedt
Dr. Michael Toedt is one of the most renowned experts in the field of Big Data and CRM. He received his doctoral degree on the subject of CRM, respectively “The influence of communication on sales performance in the luxury hotel industry” from the University of Latvia. He lectures at the University of Applied Sciences in Munich about CRM & Hotel Technology for Bachelor- and Masterclasses as well as at Hotellerie Suisse in the NDS Management Program. Michael Toedt writes articles for international magazines and online platforms on a regular basis. Among others, he wrote the official CRM guide of the Austrian Hotel Association and the book “Big Data”, which has become a standard work for the topic of Data Management. He was elected by the HSMAI as one of the “Top 20 Extraordinary minds in Sales & Marketing” in 2016.
All his publications can be found here.
