Destination Hotels & Resorts Uses Data
Collection Tools to Enable
Its 25 Hotels to Partner, Share Repeat Business
January 2004 - Destination Hotels & Resorts
(DH&R) was recently ranked the second highest revenue producing hotel
company in Hotel Business magazine�s �2003 Top 100 Management Companies�
survey. With 25 hotels under management and gross annual revenues
of $557 million, DH&R also placed first in the same survey for the
highest average daily rate. Performance like this makes the company
highly regarded by investors and hotel owners, and Destination Hotels &
Resorts� goal to grow by 100 percent in the next five years seems readily
attainable. The company�s formula for success is no secret; it combines
a discriminating eye for developing upscale properties in destination locations,
attention to detail, and philosophy of consciously leveraging specific
technologies to drive business for its properties.
�We
are a small company that likes to surprise its guests with the highest
level of guest recognition,� said Rodger MacDonald, DH&R�s Vice President
of Sales and Marketing, who noted the company manages properties in choice
destination locations for various ownership groups, matching their management
and marketing strategies to owner objectives. According to MacDonald,
those objectives vary from property to property and it is not uncommon
for investors to bring in DH&R to groom a property for later sale.
�We have several distinct specialties at DH&R, among them real estate,
acquisitions, development, and marketing,� said MacDonald. �How we
market each hotel is key to its success.� Destination�s chain-wide
business mix is divided at 55 percent corporate and leisure, and 45 percent
meeting, with three separate portfolios: mountain ski area; beach;
and city center. The company is unique in its consistent use of database
marketing technology to collect and leverage guest-stay information to
boost brand loyalty and occupancies across a spectrum of properties.
Guest Recognition = Guest Loyalty
Reaching the most receptive guests with effective
email campaigns is at the heart of DH&R�s marketing efforts.
Correctly identifying which guests are receptive is essential.
Five years ago DH&R engaged hospitality database specialists, The IDT
Group, to collect guest information from all its hotels and compile lists
of guests with specific stay patterns and preferences. Rodger MacDonald
explained, �We use database technology and e-commerce to level the playing
field with chains by developing marketing strategies that benefit all our
properties, not just the ones where a specific guest stayed in the past.
This increases the profitability of our properties, especially since they
are not paying the high fees associated with major franchises. Our
vendor was instrumental in helping develop extraction tools to pull guest
data from our properties� various front office systems and aggregate it
in a central warehouse. In the past, properties had to download this
data onto a diskette that was mailed into corporate and rekeyed.
We can now quickly identify and market to customers who show a tendency
toward repeat business at multiple properties, or who prefer specialty
segments such as beach or golf hotels.�
MacDonald cited a property in their city-center
portfolio that increased bookings with a strategically targeted email campaign.
The hotel had high mid-week business traveler occupancies, but on the weekends
the property often had vacancies. With the holiday season approaching,
the hotel worked with their vendor to identify guests in the database who
were just in the leisure segment and had previously booked a Friday or
Saturday arrival at a DH&R property within a hundred mile radius of
the city-center property. This resulted in increased bookings for
the hotel.
At the corporate level, once DH&R built a
data warehouse they began a period of discovery to learn who its guests
really were. Destination Hotels identified more than 50,000 guests
who consistently stay at its properties, and over 25,000 who are truly
loyal. DH&R found revenue is not always the basis for what makes
the �best guest,� but loyalty is. Next, the hotel company had their
supplier develop individual mailing lists of its most valuable guests for
segment- and region-specific marketing campaigns. �We have a tremendous
wealth of marketing data. Knowing what our guests want in a property
and the geographic region they prefer enables DH&R to create marketing
campaigns that generate a significant response rate and a high percentage
of cross selling and repeat business across all our properties.�
Prepared for Can-Spam and E-mail Marketing
DH&R has a quarterly campaign of marketing
communications with customers who have shown a propensity to stay at multiple
properties, and is already preparing for federal anti-span legislation.
�The �Can-Spam� law will have an impact,� said Rodger MacDonald.
�We are focused on this important issue and continue to evaluate our options.
If a guest has done business with us in the past it may open the door for
future email communications; but we are careful to provide them a choice
to opt-out. The wording of the California anti-spam law also specifies
that people who supply the emailing list are liable, as a result we are
also contemplating a pure opt-in program. The advantage of working
with The IDT Group is they already have flags created for both opt-in and
opt-out sorting, so we are prepared regardless of how the final legislation
reads. In some case postal mail will become a more viable option.�
CRM As an Engine For Growth
To support marketing campaigns and enable greater
guest recognition, Destination Hotels & Resorts is moving toward a
program that collects data from every touchpoint within each of its hotels
and then uploads the data to the corporate database. �Data collection
is an evolving art,� said MacDonald. �CRM was bounced around five
years ago, but it is much more important today, especially when a company
is positioning itself for expansion. The IDT Group is a key partner
in our core initiatives and evolving with us to help refine our marketing
strategies. For example, they set up an Internet-based guest information
collection system and assist with analyzing use patterns, revenue associated
with guest stays, and seasonal fluctuations to spot trends. Each
of our properties works with our vendor to secure a variety of operating
reports that monitor usage, and watch for shifts in markets. At the
corporate level they are a excellent source of consultative information;
they help us parse the data to either validate our current courses of action
or signal adjustments.�
Destination Hotels & Resorts is continually
focused on a high level of service, customer intimacy, and return on owner
investment. Rodger MacDonald concluded, �Finding ways to meet and
surpass the expectations of our guests is a primary value in our ongoing
effort to maintain our reputation as a management company that delivers
a quality environment at each destination. When a guest stays at
our Royal Palms Resort & Spa in Scottsdale, Arizona, the property staff
will know her, even though she has not been there before. Having
reliable data is absolutely critical to our operation. The IDT Group
has been a very good partner for the last five years ensuring that we capture
the maximum amount of data across all of our properties to support our
growth.�
About Destination Hotels & Resorts
Destination Hotels & Resorts is the nation�s
second highest revenue producing management company for 2003 and an industry
leader in the management and marketing of high-quality independent properties,
many of which it successfully converted from major brand affiliations.
With 32 hotels under management and gross annual revenues of $557 million,
DH&R is also ranked first for average daily rate in 2003. A wholly
owned subsidiary of Los Angeles-based Lowe Enterprises, DH&R began
in 1972 with the management of condominium resorts; it has grown to over
7,826 employees, 7,000 guest rooms, and more than $1.8 billion in assets
under management. Destination Hotels & Resorts� primary mission is
to create value in the properties it manages by developing an innovative,
customized business plan for each property and combining it with the sales,
marketing, and operating resources of a company many times its size.
About IDT Group
The
IDT Group is a solutions provider that organizes, consolidates, cleans
and enriches data from various systems - such as PMS, point of sale, sales
and catering, club management, spa, and other applications - into one customer
database, and generates custom, client-configured reports from the database.
Through a Web interface, The IDT Group provides utilities for combining
duplicate guest history records and editing data fields. The
company also provides an array of data mining and consulting services to
support marketing, sales, revenue management, planning, reporting, and
CRM activities. The IDT Group is the leader in the hospitality industry's
growing commitment to integrate operational systems - and the data locked
within them - by providing solutions that bridge the gap between "silos"
and exploit the profit potential of untapped information assets.
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