By Durba Ghosh
The usage of IT in hospitality has for long been limited to reservations and cancellations, but the sector is now waking up to the benefits of IT in other administrative spheres, including marketing and advertising. The growing use of IT is likely to be driven by a boom in India’s hotel industry. According to a report by rating and research firm ICRA, with 740 million domestic travellers (in 2011) and over 6.3 million foreign tourist arrivals, India is one of the most lucrative hotel markets in the world and has the second largest construction pipeline in Asia (after China). Further, India has an estimated 1, 70,000 hotel rooms of which around 60,000 are branded. With the expected addition of another 60,000 hotel rooms (across segments) over the next three to five years, the industry is expected to fall short of meeting the long term demands of an economy growing at 7-9% p.a.
Technology is revolutionising the Indian hospitality business. Automation of front office, networked properties, broadband and Wi-Fi services are now a standard part of services.
Applications like office management and front end solutions are deployed to check on availability of rooms in an efficient manner. Though not all hotels in India are networked, many have started deploying WANs to connect their properties across different locations. This helps them to monitor sales and other growth parameters.
IT as a marketing tool
Technology has emerged as an important factor in the hospitality industry. Before a hotel can offer e-booking it has to establish its presence online through a website and online advertising. The internet allows hotels to reach out to more customers by using search engine optimisation (SEO), which is a tool that helps track increasing traffic and monitor page ranking in search engine results.
“The focus is right now on generating actionable intelligence. Understanding customer behaviour through external and internal communication mediums like emails, social networks, etc. It is crucial to monitor online traction, deal searches and online searches. It also helps in identifying the negatives. The marketing department can use the information to cull out specific plans to target potential patrons,” says Daniel Ziv, Vice President, Voice of the Customer Analytics, Verint Systems.
Apart from monitoring online traction, the hospitality industry has also warmed up to the idea of electronic customer relationship management (eCRM) as an effective Internet marketing strategy. eCRM helps the hospitality industry, specifically hotels, know more about their website visitors and patrons. It helps hotels differentiate business travellers from leisure customers and enables them to follow up with appropriate marketing messages. In other words, it helps them identify their customers and their travel planning and purchasing behaviour. This in turn enables hotels to push personalised offers and notifications to their patrons.
Infosys, for one, is helping its hospitality and leisure clients reshape their technology landscape to deliver differentiated customer experiences while doing more with less. This it achieves by addressing challenges in three key areas: business transformation, innovation acceleration and efficiency of operations.
“Trends like social networking, mobility, Cloud and Big Data are influencing the hospitality industry in a big way. Hotels are now looking at leveraging conversations and opinions on social networks and customer generated mediums. Those who do not do it will eventually fall behind,” says Gopal Devanahalli, VP, Infosys.
In today’s “out of sight, out of mind” marketplace, becoming a part of the digital consumer’s lifestyle is an imperative. Having a pervasive presence online can open the doors to enhanced revenues and stickiness, while safeguarding brand reputation.
“Integrating social platforms and online bookings is crucial for the hospitality industry today, as it is primarily a customer-centric sector. Today, a lot of unstructured data is available in the public domain also, including information about what users like and prefer, their buying pattern, etc. That kind of information can be used by the industry for targeted marketing,” says Devanahalli.
It hasn’t taken long for businesses to discover that viral marketing through social web sites—Facebook, Twitter, Flickr, YouTube and others—can easily make or break a new product or service. Branding opportunities abound on these sites.
Destination Web strategy is another corporate initiative undertaken by many players in the hospitality industry. This approach leverages the popularity of a destination for the benefit of a particular hotel or a cluster of local properties. So the hotels benefit not just from the popularity of a place but they can also reduce their overall marketing spend by cross-selling multiple properties they might have for a particular destination.
Mobile marketing
With the number of mobile subscriptions hovering around 900 million in India, hospitality players—like those in other segments—can reap the benefits of tapping into the mobile marketing medium. Again, the trick is to use the right approach and tools, so that the most relevant consumers are reached with optimal marketing spends and efforts.
Today, mobile phones are no longer restricted to voice and text communication—they have become the hub of information, research, inquiry, and even online shopping. Location-based services, which capitalise on where a particular consumer is at a given point of time and offer him relevant choices, are already the talk of marketing folks everywhere. Examples include discount coupons at a nearby pizza outlet, discounted room rates at a particular property, coupons for the water park on the next exit, etc. Mobile boarding passes, mobile bar-codes, hotel room activation, real-time weather updates, mobile valet services and other similar offerings are going to be the norm in the not-too-distant future.
Starting from hotel reservations to car booking, purchasing event tickets to booking a restaurant table, things are getting increasingly bundled with various apps on mobiles and tablets. Some of the top hotel chains who were the earliest proponents of m-commerce have reported a 70% – 90% surge in their traffic.
Although still at a nascent stage in India, mobile marketing is beginning to gain traction.”Mobile marketing is getting increasingly important as it reaches patrons directly. Hotels can carry out the survey or feedback process on mobiles, and push personalised and location-based offers on mobiles,” says Ziv.
So, if you are a business traveller and approaching Bangalore at around 6 PM, you won’t be receiving offers related to a lunch buffet in New Delhi. Instead, you could find suggested tea and coffee joints near where you are. According to an eMarketer survey, more than 486 million users will be using location-based services by 2013. Given the growth in travel within and to India and the rising use of smartphones, a significant portion of them could be in India.
“Location-based personalised offers are trending nowadays. Although it is still in a nascent stage, sentiment analysis, including tracking tweets, reviews and online searches, is coming up quickly. We already have a solution on Cloud,” says Devanahalli.
If research statistics are any indication, mobile marketing is going to be big: according to Juniper Research, mobile-enabled payments will touch $630 billion by 2014—or 5% of the total e-commerce sales worldwide.
With the use of smartphones and tablets on the rise, consumers are expected to use these devices to book a room, check in and check out. Delivering such services with mobility solutions not only enables greater reach, but also holds great potential for hospitality firms to improve employee efficiency.
Cisco, which serves clients like Le Meridian, Taj Group of Hotels and JW Marriot, believes a lot more applications will come on mobile as demand for mobility from hotels increases. “Other services like IP telephony, digital signages will also come up soon,” says Shetty.
Going forward
“The Indian market is technically savvy. Big data as a concept has really picked up here. Hotels are not domestically bound but are serving globally. Adoption and intent to adopt IT is high here. India is very competitive as a hospitality service provider,” says Ziv.
However, there are challenges for the industry. The largest problem is integration of multiple systems and applications that are used individually in each part of a hotel’s operation. This requires complex and labour-intensive interfaces to transfer information from one department to another. The result is that the IT staff is busy solving interface issues while the hotel operations suffer from the lacking information to more effectively serve their guests, optimise revenue and minimize costs.
Among others, Cenium has successfully addressed these challenges, offering what it claims is a totally transparent, single platform solution that can improve the operation of hotels.
The future use of technology usage in hotels will involve high-bandwidth services such as high-definition video conferencing, corporate VPNs and VoIP services—which will be soon be part of standard package for customers.
The new trends within smart rooms include functions such as key-less entry, rooms that can map customer preferences for room temperature, room lighting, food, TV/video preferences, etc. With more technology embedded into hotel services, marketers will increasingly use more and more customer-specific messages and rely on multiple modes of communication.