in Next 5 Years; Leverages Data to Multiply
Loyal Guests and Please Investors
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.
Destination Hotels & Resorts
|Also See:||Ultra-Luxury Segment Stays Strong in $525 Billion Travel Industry; Rosewood Hotels & Resorts Consolidates Global Guest History to Target 10% Increase in Repeat Business from World’s Traveling Elite / September 2003|
|World’s Top Destination Health Resort Consolidates Guest Data to Develop Unique Services for Discriminating ‘Happy’ People / September 2003|