The tragic events in America and their potential ramifications have had a far-reaching impact on the hospitality industry. It seems that almost overnight, the entire world has stopped travelling. The effect has been so dramatic that numerous airlines have gone out of business and hoteliers are currently bracing themselves for a multi-million pound shortfall over the coming year.

This, understandably, has led to an increased interest in marketing. Hoteliers are now faced with the intriguing proposition: how do you generate business when you are competing with people fear? Is there going to be a benefit in increasing your marketing budget? Or should you simply do nothing and attempt to ride out the storm?

For most people, the latter scenario is not a viable option. But if you do decide to become proactive - then where exactly do you start? One of the prime factors facing hotels in the aftermath of September 11 is the best means of expending available funds: do you opt for hopeful mass-marketing, or much more specific targeting of your existing guest base? The latter may be the only way of recovering from the current global situation.

Repeat, repeat, repeat

Whatever the external climate, repeat custom is of critical importance for hotels and guest houses. Retention of existing guests is imperative. And the only way that you can aim your advertising towards your existing database of guests is to understand precisely who those guests are by building loyalty with them. Matthew Maxwell, chief executive of Amateo, a company which specialises in warehousing business intelligence for the hospitality industry, believes it is essential to develop a long-term, high-value relationship with your customers.

is an old adage that says it's five times more difficult to get a new customer than it is to retain an old one, he says. , unlike telecommunications companies or retail, where charm will play a major role in influencing customers, the complexities of the customer relationship for the hospitality industry are far greater. You're looking at personality traits. It's very important to have all the information needed to do the analysis on the individual guests, so that you can market more effectively and retain loyalty from those guests.

Evolving out of one of Ireland's leading business intelligence providers, Amateo initially developed data warehouse and business solutions for banks, insurance companies and large manufacturing companies. Then, based on its experience in these industries, and seeing how they invested in retaining customers, it developed a solution for Jury Doyle's plc, and identified a huge void in the hospitality sector. To date, there is no alternative to Amiteo system in the marketplace worldwide, and the company hope to have their first US corporation signed up within the next six to eight weeks. The Amiteo system specialises in allowing a hotel's marketing department to analyse its guests' profiles and segment them. the guests who spend the most money on the services that you are best at delivering is clearly an optimisation process. But it's not efficient for the hotel just to determine who is the optimum guest based on value, explains Matthew.

must look at what is the optimum service the hotel can actually provide for the guest. It's about understanding these preferences from the guest's perspective, and understanding where - and with which type of guest - the hotel is successful. If you can define that and segment these individual guest types, you can market very efficiently. You can analyse their spend-pattern, you know what their demographic profile is, and - if you offer them a weekend in one of your hotels at a certain price that is within their spend-bracket, doing something they particularly like - the chances of them coming to stay with you are extremely high.

Natural selection

As most marketing experts will tell you, there is a very low response rate to the type of mass-marketing blanket advertising campaigns typically done by hotels. However, targeted marketing is highly efficient as long as you understand who the target is. The problem is, you can only do that by analysing your guests' profiles via the information available in the hotel. And if your information isn accurate or detailed enough, it isn going to be any use.

marketing means identifying what people like and dislike, explains Mr Maxwell, promoting to them based on their particular needs. It's an efficient way to market. The only way that companies are gaining access to people is through mass-marketing, but when everybody does it it becomes highly inefficient.

's back to the value equation: brand advertising is very important. Developing a brand image is a key factor for hotels because quite often, that where you make first contact with the guests. Brand advertising is a key component in the success of any business and vast sums of money are spent on it.

, identifying who the guests are from that point forward is equally important. Where most hoteliers agree they fail is in the retention process, that is, how they keep the guests coming back by identifying their type, so they can focus their ongoing marketing promotions towards that individual. That's what Amateo is offering them, the technology and the application that allows them to become very focused in their delivery.

This is all well and good, but what if the guest doesn want to be identified? How can a hotel properly market to a guest who signs in as Bart Simpson or Mickey Mouse? 's a house-keeping process in the technology, an address correction process that looks for discrepancies in the data so that you can correct them. The system has 271 countries embedded into it, and will put all the correct details into the correct fields so that letters actually get to the right address. You can also capture the information off the screen to build a profile of the guests who come to stay with you via the internet.

click-stream analysis, all the information can be relayed back into your central reservation system, and you can extract the data from the property management system. If somebody cancels their booking, you should try to identify what segment they are - you can even see if there's a consistent profile of people who constantly cancel bookings.

One of Matthew irritations is that the hospitality industry currently wastes up to $296 million a year on implementing customer relationship management systems that aren designed specifically for the hotel sector. common problem is that people have bought systems that are a bastardisation of customer management systems developed for other industries, he says.

Because there are more factors influencing customers to stay at a hotel than, say, to buy a tin of baked beans, Matthew argues, understanding the guests you already have exposure to is more important than trying to gain exposure to others. the point of spending huge amounts of money advertising to those who aren interested? he asks. your profitability is always an important factor - and particularly when times are tight, you should provide the highest level of service possible.

Published in License and Catering News - November 2001

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