Shifting away from the PMS as the data warehouse
The CRM data warehouse
Traditionally, the PMS has been considered the primary hub of hotel operations. But as data management becomes more complex, the limitations of the PMS, as this primary hub, are becoming increasingly apparent.
“The PMS provides fantastic information for establishing metrics like recency, frequency, and monetary value,” said Tim Sullivan, Chief Revenue Officer at Cendyn. “However, as powerful as that data is, it doesn’t tell you much about guest preferences, demographics, or what they do when they’re not staying at that particular hotel. The profiles are generic.” Another challenge is that the PMS tends to be property focused rather than brand focused.
“If a customer likes a brand, he will use more properties within the brand,” said Chetan Patel, Vice President, Strategic Marketing & eCommerce at Bangkok-based Onyx Hospitality Group. “The other properties need to know what to expect from that customer and how best to serve him/her. Front office and management need to know that the guest is important to the entire brand. A single-property PMS can’t do this.”
In the past, TFE Hotels’ website booking engine was administered by the PMS provider. “It did what it needed to do, but it wasn’t at the forefront of the technology. A PMS is not a distribution system and we should not expect it to be either,” said Shaizeen Contractor, Chief Revenue Officer, TFE Hotels. The company switched to a specialized provider and can now take advantage of advanced features and functionality.
The hotel CRM as the central hub
Increasingly, hoteliers are reaching the same conclusion: the CRM represents the ideal solution as the central repository for guest profile data and engagement.
Today’s CRM systems are built using the latest technology, are cloud-based and secure, and are nimbler and more agile than the PMS. Moreover, they employ open API technology that enables easy integration with other sources. “Hotels need access to rich data—the ability to store it and leverage it,” said Michael Bennett, Cendyn’s SVP of Global Marketing & Business Development. “Now all these systems, not just marketing, sales, and revenue but also the spa system, golf system, food & beverage system, are trying to mine data. But it’s more than just the data. You need to be able to perform data appends, behavioral analysis, and the slicing and dicing of profiles.”
Bennett noted that another piece of the puzzle is revenue management. “The CRM provides access to guest information based on factors like history, response to advertising, rate, aptitude to book, clicks, conversions, etc.,” he said. “A PMS company can’t do all this. And it would be a massive undertaking to build such capabilities in-house. Which is why the CRM is the obvious choice as the single point of truth for guest profiles.”
Bennett continues “this isn’t to say the CRM replaces the PMS. Rather the two systems work side by side and are fully integrated. When a guest checks in, the front desk agent has both systems open. The CRM delivers two or three talking points to engage with the guest. Throughout the encounter, the agent enters data in the PMS and it pings into the CRM.”
While other industries, including retail, business services, technology, and banking, have made significant progress in integrating customer data into the CRM, the hotel industry is lagging behind. This is in part due to hoteliers’ h3 attachment to the PMS.
“Changing the mindset is a serious roadblock,” said Bennett of Cendyn. “Even smart hotel executives believe that the PMS is the ultimate source of truth because that’s how reservation data is coming in. Once we help them visualize the flow of data, they start to understand that the PMS is just one source of data among others, albeit a crucial one, and that the CRM is better positioned to be the ultimate source of guest data.”
Another obstacle is outmoded perceptions of CRM. “In the early days, CRM was thought of as limited to email marketing—collecting email addresses, sending emails, and hoping some customers will buy again from you,” said Patel of Onyx Hospitality Group. “CRM has evolved since then, and communication is just a small piece. Now it includes features like business intelligence, filtering, targeting, and personalization.”
Although his company is in the early stages, Patel said that its end goal is to build a centralized set of data for all the company’s properties and brands. “Our aim is to connect as many of our properties as possible, starting with the branded ones. We’ll collect all guest information and centralize it into the CRM system, providing one point of truth.”
Patel continues “How can we wean property staff from the PMS when it comes to guest data? How can we get them to think about how to personalize and communicate better and get them into the mode so they don’t automatically go into the PMS, they go into the CRM, which will be sitting side by side with the PMS?”
Improving the guest experience
Perhaps the most effective way to change mindsets and habits is to demonstrate the potential of the CRM to transform the guest experience. “Guest expectations are increasing,” said Marcos Cadena, VP of Digital, Ecommerce & Distribution, Minor Hotels. “The only way to keep up is to maintain a system that unifies all systems together. If one guest wants to chat with staff online, the chat must be integrated with the system. If another guest wants to call us or email us, that needs to be integrated too. It’s about moving the guest profile to the CRM level and integrating it seamlessly with other channels.”
As one of the many ways to enhance service, The Set hotels – a group of hotels with properties in London, Amsterdam, and Paris – plan to connect its phone system to the CRM. “We receive lots of direct reservations by phone,” said Martijn van Eijk, Director of Guest Loyalty & Retention. “Previously, if the caller was a repeat guest, we had no idea without pulling up his profile. Now, the CRM will recognize the phone number, and the guest’s profile and photo will pop up as soon as the employee picks up the phone. We know right away that the guest stayed with us before.”
The Set hotels also intend to take advantage of the CRM’s built-in loyalty program management features. “With the CRM, it will be easier to identify our most valuable guests across properties,” said van Eijk. “As soon as we go live, we’ll be able to run reports based on historical data for all three hotels, such as top 25 guests in the group. Then we can approach our top guests and offer them membership, return benefits and highly personalized experiences.”
Preparing for the future
It’s been a year of transition for the hotel industry, with dramatic changes in traveler expectations, technology, and government regulations. Hotels must adapt with the times or risk being left behind. This means putting into place strategies, technology, and staffing.
In the process, many hotels are discovering a shortage in the requisite skills. In the Adobe-Skift survey, 74 percent of respondents identified the lack of skilled digital marketers/analysts as a challenge in the upcoming year. Hotel companies need h3 leaders to champion the cause.
At Minor Hotels, Marcos Cadena is implementing a strategy he calls total digital management. “Much as we speak of total revenue management, the concept is the same,” he explained. “Over the years, the role of the revenue manager has expanded from a rooms-only focus to optimizing every revenue stream in the hotel. The same thing needs to happen with digital managers. We need people responsible for managing guest data in every department.”
As Cadena and other forward-thinking hoteliers attest, it’s a data-driven world, and with data comes both power and responsibility. To realize the full potential, hoteliers must accept that the old-school, siloed, PMS-centric approach to guest data management is thwarting innovation and making them vulnerable to data breaches.
Only by embracing an integrated, centralized and CRM-powered model will hotel companies be truly positioned to provide the high degree of personalization and data security expected by travelers today and into the future.
Want to find out more about how a CRM-powered model at your hotel can enhance the guest experience? Download our recent guide The CRM data warehouse.