Lest not forget CRM = Customers Really Matter!

It’s now some three years since the NASDAQ reached an all time high of 5,048.62 points; a time when people were filled with euphoria and driven by adrenalin in the hope of becoming an overnight zillionaire by taking their DOT COMS through to IPO. Hotels were full to the brim, often charging astronomical rates for their rooms, and restaurants were selling foie gras and caviar with champagne flowing as though it were the equivalent of a burger and fries with a chocolate shake thrown in for good luck, all this while people discussed exit strategies. What delusions of grandeur we all had…

Now over a quarter of a decade later, and with more than a trillion dollars being wiped off the value of four once-darling companies like CISCO, DELL, INTEL and Microsoft, many worthless (DOT BOMB) stocks are floating around, and many home owners are for the first time in their lives experiencing a phenomenon called negative equity. Travel budgets have been cut, and news announcements about lay-offs are more the norm than the exception.

Hotels have somewhat responded to market trends by re-defining their coffee shops, morphing them into all-you-can-eat buffets complete with such tantalizing and mouth watering delicacies as sushi, seafood, hot carvings and even made to order soufflés like the enormously successful Café Too at Hong Kong’s Island Shangri-La. But, has the DoSM (Director of Sales and Marketing) applied a similar winning formula this for their rooms? NOT I hear you say.

These people are still living in cloud cuckoo land believing the all powerful corporate traveler (everyone’s dream client) is still a walking pot of gold, ready and willing to hand over increasingly harder to earn (plastic) dollars for such extras as HSIA (high speed internet access), local calls, IDD surcharges, photocopies, use of internet browsing stations, laundry, a bottle of mineral water or stick of candy in the mini bar.

I have just returned from a week long trip to Singapore where I attended the 5th Annual Customer Contact World Asia 2003. Unfortunately, it was not very well attended by both exhibitors and attendees perhaps due to the world’s prevailing economic situation, or perhaps due to the world’s increasingly unstable political situation. It’s a shame really because the focus was on CRM (Customer Relationship Management), and all about building brand loyalty – something hotels are in desperate need of – especially during these competitive and tough times. Emphasizing the impact of those conditions on international travel, one of the panel speakers whom was as the moderator (James Smith, Managing Editor, CCW Magazine & Portal, Singapore) aptly put it, "was made up of frightfully intelligent people" however, Patricia Vas, Managing Director Customer Service, British Telecom, UK was supposed to fly out, but was forbidden from doing so by her company (a sign of the times...), and instead, used an excellent video tape presentation to extol the virtues of what her company had done in this all important area. Many companies shared their (theoretical) views on how to ‘service the customer’, ‘how to reward the employee who goes the extra mile’ (like a £50 instant bonus in the case of UK's Pret A Manger which is handed over by a Mystery Shopper to a staffer that perhaps smiled more than other team members) and ‘how to build a relationship with your customer’.

From first-hand experience, I know many companies are on ‘capex hold-downs’, so surely this would have been an opportune moment to send your scouts out and research such things, so that when things turn around, and we all hope and pray they will,  you’ll be prepared with all the knowledge and tools to make that educated and most likely rushed decision.

The Plenary  speaker was Peter Williamson, Professor of International Management and Asian Business, INSEAD, Singapore, and he talked about Seven Keys to Building a Customer-Centric Enterprise.

Professor Williamson goes on to say, that being Customer-Centric Doesn’t Often Come Naturally:

      •         Good intentions meet operational constraints

 •          Just doing everything the customer wants doesn’t guarantee profitability!

So the Professor has come up with ; Seven Keys to Building a Customer-Centric Enterprise

1. Opening up your communication channels with your customers
2. Recognizing the customer wants you to help resolve their contradictions
3. Using CRM to build links with profitable customers, not just loyal ones
4. Accepting that customers need to be rewarded for investing more time and effort
5. Avoiding the trap of proximity = attention
6. Organizing your company around the customer
7. Innovating with the customer, not just “at” them

A consistent message throughout the show was as more and more of us are under cost pressure, it’s really a matter of positioning yourself 'as far as what the customer will pay for', and 'not necessarily what they want'.

A good example of this was the fact that while in this Fine City as some people label it, I stayed in a 5-star hotel (just a short covered walkway away from SUNTEC) on their recently upgraded Pacific Floor. Superficially, my room on the 33^rd floor was very nice and comfortable, with my first night yielding a better sleep than I have had for a very long time. The desk was amply equipped with good lighting and accessible power sockets, and a Hermann Miller Aeron chair which is always a dream to use. Someday I must get one of these! The overall bathroom size was good, and although the shower was fitted with a Hans Grohe Pharo power shower, it was disproportionate in size to the toilet cubicle which was definitely missing a magazine rack to hold the extensive selection found in the drawer under the TV.

With a S$70 premium over my ‘special travel agent booked rate’, the upgrade package included (apart from a nicer room, access to the Lounge and superior bathroom amenities)

• Complimentary unlimited pressing
• Complimentary daily newspaper (not once received even though I ticked the box on the Registration Card)
• Complimentary full breakfast in the lounge
• Complimentary Mercedes-Benz to a local business address from 07:15 to 08:40
• Complimentary afternoon tea
• Complimentary hors d’oeuvres from 5-7pm
• Complimentary mini bar for drinks consumed during my stay (stocked with Perrier, Evian, sodas, beer, Chivas Regal, Gordon’s Gin, Remy Martin and nuts)
• Complimentary liqueurs (in the lounge) from 8pm-10pm with tea and coffee served throughout the day
• Complimentary local calls
• DVD Player (but where do you get the disks?)
• Free entry to the Health Club

But what irked me about this on the surface great sounding deal, was the fact that I would have much preferred to have paid for the mini bar (since I don’t drink) and in exchange be given free HSIA and use of the business centre for printing and photocopies. Assuming that I am a large consumer of F&B is wrong. Assuming that as a Road-warrior I am burning the midnight oil (which I often do) and would need business type services (such as at 0100 when the broadband connection failed and the helper had gone home at 11pm) would have been much more realistic and visionary. At least give me the choice! One night, I met another guest in the bar who without initially knowing who I am, and what I do, echoed this sentiment 150%.

Thinking (as the industry does as a whole) that I prefer to consume on an a la carte basis for my business services instead of making this an all-in-one business buffet is wrong. It’s also wrong to position me as a cash cow, especially knowing that the general market sentiment is gloomy and uncertain as the threat of war looms large day by day. CRM in this case should mean Clever and Resourceful Management.

Internet access and business services should be higher on the list of priorities a hotel offers to people whom they know are staying with them to do business. It’s no longer good enough being a home away from home you also need to be an office away from office helping support me on my mission. This hotel has about four different comment cards you can fill up and one is specifically designated for ‘in room business services’ so I better print this out, fold it up and stick it inside the nice yellow envelope for the invisible management to (possibly) contemplate and action.

How can hotels believe I can be there at 3pm in the afternoon to take tea, or at 5pm in the evening for cocktails, when more than likely I’m in a business meeting, or in my room doing emails (as I am now). Actually, to be honest, I did struggle on one day to do this, and combined several meeting together with some business associates just to check it out. It’s also a shame that the 2-floor Executive Lounge only had 2 plasma TV’s in the upper section which serves breakfast, and not the lower one open for the rest of the day. Don’t they think you might want to watch CNN or Fashion TV in the event you can drag yourself away from your work?

One of the conference speakers this formula will definitely not apply to is: Edwin Yeow, Joint Managing Director/Senior Vice President – Marketing, Banyan Tree Hotel and Resorts who differentiated his brand in one of the sessions as “romance in the seclusion of your own pool villa”. That’s a very clear positioning statement if I ever heard one!

In all fairness to the hotel, I liked the chocolate and mint candies on the desk; I also found the front line staff to be some of the most attentive, hard working and courteous that I have come into contact with in a very long while. But did I witness any ‘management by walking about’ measuring the heartbeat of the customer – I don’t think so. Did I see people come out from hiding behind the omnipresent fluorescent yellow comment card (which probably ends up in the Bermuda Triangle of the service experience) rather than leave the service delivery to the lowest paid member of staff? No.  

How can you possibly hope to get close to your customers if you don’t speak to them and help in the delivery of the brand promise? I suppose you’ll just rely on those expensively priced mechanical CRM solutions (that I came to see) that have all the bells and whistles, and try very hard to make a guest look like a pie chart – you’ll also rely upon profiling guests (such as security organizations try to do with terrorists) and take that good old dartboard approach in the hope of getting it right.

But just consider this - maybe it’s time to put the F&B Manager in charge of rooms – they seem to be more creative, visible, and have a handle on what’s going on….and after all, they say the way to a man’s heart is through his stomach.

Author's Website:  http://www.pertlink.net

Contact:  terence@pertlink.net

This article first appeared in  Hotel Asia Pacific

Shangri-La wins bid to manage former ANA in Sydney

News has come to hand that Shangri-La Hotels & Resorts has won the much-desired bid for the management contract of the former ANA Hotel in Sydney, and that an announcement is due tomorrow.

The former ANA Harbour Grand Hotel Sydney will be formally rebranded as the Shangri-La Hotel, Sydney. It is owned by a subsidiary of GIC Real Estate Pte Ltd (GIC RE), and located between the Sydney Opera House and the Harbour Bridge in the historic Rocks district.

“We are delighted to be working with GIC RE, and to have this opportunity to enter the Australian market with such a prominent hotel,” said Giovanni Angelini, Shangri-La’s chief executive and managing director.

“This move is a strategic step in the group’s expansion and will be a tremendous addition to the new hotels we have already announced in Dubai, Oman, the Maldives and China.”

The hotel’s location, views and large bedrooms would ensure that it continued to be the preferred choice for travelers, said Angelini.

A fierce battle for the harbour-front property began when it was sold to the Government of Singapore Investment Corporation's GIC Real Estate last year.

GIC at the time beat a field of 20 hopefuls and four final bidders with its US$115 million purchase price - the highest ever for an Australian hotel.

Ritz-Carlton and Shangri-La were the two main contenders in the race. Shangri-La has been waiting for an entry into the prized Australian market for a while; while Marriott International was known to be trawling for a replacement for the Ritz-Carlton in Sydney since losing the management of its Macquarie St hotel to Ow Chio Kiat's Stamford brand in 2000.

TravelWeeklyEast.com  

News @ PATA

DE JONG PRAISES FORTY NATIONS REGISTERED FOR BALI -  PATA President and CEO, Mr. Peter de Jong, praised delegates from 40 countries who have registered for PATA Annual Conference, April 13-17 in Bali, Indonesia. He said: "PATA is deeply encouraged by their commitment to the one annual travel event in our region which unites our diverse membership in the name of peace through travel." He added: "PATA's Annual Conference is unique in its ability to attract such broad support from across many cultures. This shows that PATA is a truly international organisation representing a wide range of people in travel." For further information about PATA Annual Conference visit www.pata.org and click on the Conference link.

STRONG BOOKINGS FOR MEKONG TOURISM FORUM
PATA is pleased to announce that the 8th Mekong Tourism Forum, to take place in Hanoi, Vietnam, March 28-30, 2003, has received 175 confirmed registrations. Local registrations are likely to boost numbers comfortably beyond the 200 mark, creating what PATA expects to be the best attended Forum in the event's seven-year history. The Vietnamese authorities have acted swiftly to contain the outbreak of SARS flu to the Vietnam-France hospital in southern Hanoi. The Vietnamese Ministry of Health announced that the cause of the disease is now known, there are no new cases, and existing patients are responding to treatment. Dr. Pham Tu, Vice Chairman of the Vietnam National Administration of Tourism, told PATA on March 20: "Travellers should no longer be worried about this situation. Visitors to Vietnam will be well taken care of and given high quality service and safety." No restrictions on travel have been called for by the World Health Organization. Its regular updates on SARS can be found at
http://www.who.int/en/

DONATIONS FOR PATA FOUNDATION SILENT AUCTION The PATA Foundation would like to invite all PATA and Chapter members to make contributions to the upcoming PATA Annual Silent Auction to be held at PATA Annual Conference in Bali, Indonesia. All proceeds from this fundraising activity will go to the Foundation which will be used to support grass-roots environmental, cultural and educational programmes. So far, the Foundation has raised over US$135,000 for the upcoming auction. Travel donations can be accepted until March 31, 2003. If you would like to participate and help the Foundation continue its important role, simply donate a travel product or service to the auction. Contact PATA Senior Policy Analyst, Mr. Tongchan Srinava. Tel: (66-2) 658-2000 ext. 115. Fax: (66-2) 658-2010. E-mail: aye@pata.th.com

PACIFIC ASIA TOURISM FORECASTS 2003-2005
Due to the increasing trend towards intra-regional travel, the Pacific Asia region will be relatively insulated from any negative short-term effects of the current conflict in the Middle East, according to a new study by PATA's Strategic Intelligence Centre. Furthermore, destinations in the region could turn more to medium- and short-haul source markets should long-haul markets decline. PATA's new 272-page report, Pacific Asia Tourism Forecasts 2003-2005, has factored in the effects of a limited-duration conflict in Iraq on travel flows to, from and within the PATA region. The book will be released at PATA Annual Conference in Bali, on April 13 and will sell for US$350 to PATA members and US$499 to non-members. For further information, contact PATA Coordinator-Publications, Ms. Patcharin Hongprapat. Tel: (66-2) 658-2000 ext. 121.
Fax: (66-2) 658-2010. E-mail: publications@pata.th.com

PATA BALI RECOVERY TASK FORCE OUT NOW - PATA has released the PATA Bali Recovery Task Force Report. The report was charged with giving practical advice, based on expert opinion and local knowledge, on how to accelerate the healing process and regenerate Bali's and Indonesia's tourism sector. The report provides practical advice applicable, not just to Bali and Indonesia, but to other PATA member destinations in crisis recovery mode. The report is priced at US$25 for PATA members and US$35 for non-members. For information and to order, please contact PATA Coordinator-Publications, Ms. Patcharin Hongprapat. Tel: (66-2) 658-2000 ext. 121. Fax: (66-2) 658-2010. E-mail: publications@pata.th.com .

PHONE AND FAX NUMBER CHANGES IN NEPAL An extra number has been added to Nepalese phone and fax numbers, effective March 15, 2003. A digit needs to be added to the beginning of existing six-digit numbers when phoning or faxing anywhere in Nepal. For example: Kathmandu - 4; Lalitpur (Patan) - 5; Bhaktapur - 6; Dhulikhel - 6;  Chitwan - 5; Pokhara - 5. The old phone number of the PATA Nepal Chapter based in Kathmandu was (977-1) 256163. The new number is (977-1) 425-6163. For more information about the changes, visit the Nepal Telecommunication Corporation's Web site: http://www.ntc.net.np.

MONGOLIA MULTI-MEDIA A new multi-media CD-ROM about Mongolia is being promoted by the Mongolian Tourism Association in cooperation with The Competitiveness Initiative, a not-for-profit organisation based in Ulaanbaatar, Mongolia. Interested parties should e-mail: saffery@tcimongolia.org .

PATA STRATEGIC INTELLIGENCE CENTRE WORLDWATCH

** In anticipation of a downturn in travel following the outbreak of hostilities in Iraq, Singapore Airlines has announced the suspension of 65 weekly services. The cutbacks will be applied to schedules until May 31. Other airlines such as Thai Airways International, SriLankan Airlines, Korean Air Lines and Delta Air Lines have also made service reductions.

** On March 19, United Airlines said international bookings were already 40 percent down on a year ago.

** Initial reports suggest Europe's leisure travel industry has experienced a fall in bookings of about 15 percent, with European summer vacation bookings taking the brunt as holidaymakers take a "wait and see" approach. According to research by AC Nielsen in the UK, January bookings were already down seven percent, February 15 percent. A Mori poll showed that 17 percent of travel buyers were intending to go abroad this year, but would not commit to booking until hostilities were over. 

AH&LA Provides Extensive Industry Materials In Wake Of National Crisis 

The American Hotel & Lodging Association (AH&LA) has established a "National Homeland Security" section on its Web site. This resourceful segment offers up-to-date travel safety and industry resource information.

Via www.ahla.com , Internet browsers can view a variety of pertinent materials including tips from lodging security experts, general guidelines for crisis communications, links to important government-related sites, and much more.

In addition, AH&LA is offering property members specially priced security training videos*. Available through its Orlando, Fla.-based Educational Institute (EI), these products focus on such topics as emergencies, fire safety, workplace violence, employee awareness, and problem prevention. The security training videos are available until Sept. 30, for the rate of $50 for AH&LA members and $85 for nonmembers. To order the videos or for more information, call EI at (800) 752-4567 or (407) 649-8252.

"AH&LA is committed to leading the industry through this national security crisis with every available resource. We are confident these tools will assist everyone as they address potential situations," said AH&LA President and CEO Joseph A. McInerney, CHA.

War crushes hopes of UK hotel industry

London Times  -  The UK  hotel market took a sharp turn for the worse in February as the threat of a war with Iraq exacerbated the gloomy economic picture, according to figures published yesterday.

Monthly statistics from PKF, the accountants, show that the signs of recovery in the London market during the latter part of 2002 were "swept away" in February as both room rates and occupancy figures went into reverse.

The average occupancy in the capital's three, four and five-star hotels fell from 72.4 per cent to 69.4 per cent, while the average achieved room rate fell from Pounds 96.04 to Pounds 94.08. As a result, the rooms yield fell by 6.2 per cent to Pounds 65.29.

The impact of the political and economic uncertainty was also felt further afield, with regional hotels reporting a fall in occupancy from 68.9 per cent to 67.6 per cent and the room rate falling by 0.6 per cent to Pounds 60.46. The rooms yield was 2.5 per cent lower at Pounds 40.86.

Melvin Gold, managing director of hotel consultancy services at PKF, said that the figures would be a "tremendous disappointment" to an industry that had worked hard to recover from the impact of the September 11, 2001 terrorist attacks on the US.

He added: "February saw worsening economic indicators on top of a global crisis and at one stage TV screens were filled with images of tanks outside the world's busiest international airport. It was never going to be easy in that environment and these figures confirm the difficulties."

Mr Gold said that, while it was impossible to predict the impact now the war had started, the hope was that the hostilities would be "short and decisive, encouraging people to travel with confidence after it is concluded". A longer war would "damage the industry's prospects still further".

PKF's figures have been mirrored by recent comments from hotel operators, none of which has been able to give any guidance on the immediate outlook. A number of big hotel companies, including Le Meridien Hotels & Resorts, are believed to have implemented contingency plans to close whole floors if the hostilities result in a prolonged slump in international travel.

Hong Kong Hotels hard hit

TTG Asia  -  With bookings, occupancies and summer plans for millions of people in a state of flux, the Hong Kong industry can do little but cross its fingers, hold its collective breath - and pray, one veteran agent says.

A spokesman for the Hong Kong Tourism Board said: “Since the beginning of this year, presumably because of war concerns, long haul travellers seem to have been adopting a wait-and-see attitude. Short haul has not been so much affected by hostilities and we were not expecting the war to have much impact on intra-regional travel. But the addition of the disease outbreak has obviously changed all that.”

The spokesman said in the past 10 days, “we have heard of fall-offs of up to 80 or 90 per cent in some (but not all) package tour bookings from short haul markets. The good news, however, is that the majority are understood to be postponements rather cancellations.” There seems to have been little impact on the Mainland Chinese market so far. But Hong Kong Japanese Tour Operators Association chairman, Mr Choi Pat Tai, said widespread and negative reports on growing number of atypical pneumonia cases had scared the Japanese market. “Clients called for tour cancellations, not postponement of their itineraries, because they do not want to end up in misery."

Egypt hotel occupancy severely drops

Several hotels in Egypt slash daily rates to offset dramatic decline of occupancy rate caused by Iraq war scares.

Middle East Online  -   The war in Iraq has caused a severe drop in tourism to Egypt, with industry sources reporting Tuesday an average 30 percent hotel occupancy rate, down from a usual spring average of 80 percent.

"Almost all Italians, who are our main clients, have left," said the manager of a four-star hotel in the Red Sea resort of Sharm el-Sheikh, on the southern tip of the Sinai peninsula.

"A few Russians remained, but charter flights are becoming rare and 30 percent only of our rooms are occupied," he said.

The same decline has been reported by hotel managers in the Upper Egyptian cities of Luxor and Aswan, rich with ancient pharaonic sites.

Several hotels in Cairo have slashed prices. The five-star Marriott in the upscale neighbourhood of Zamaleck has cut its daily rate by half to 50 dollars.

"Our occupancy rate is 30 percent, whereas the normal March average is 80 percent," said the manager of a luxury hotel on the Nile river front in Cairo.

"March is usually a high season, the drop is quite significant and it will continue because it's a matter of security," he said.

The Semiramis Intercontinental also reported a slump, but has not modified its rates yet to maintain high quality service.

The industry federation has forecast that tourism revenue losses will amount to at least 1.7 billion dollars, almost 50 percent of the country's yearly earnings from this sector, its first hard currency earner.

The crisis is having a knock-on effect on other sectors, including travel, as flag-carrier EgyptAir cancelled and regrouped several flights to cut costs due to lower passenger occupancy and rising fuel and insurance bills.

EgyptAir chief executive Ahmed al-Nadi has said his company could be hit harder than any other airline in the region because it is highly dependent on tourist traffic.

The war has also exacerbated pressure on the Egyptian pound, which has lost more than 20 percent to the dollar since it was free-floated on January 29.

Taiwan hotels fear drawn out war to hurt occupancy rates

Even the most solid performers in Taiwan's lodging industry are being rocked by the turbulence sweeping the Middle East.

Taipei's five-star establishments told the Taiwan News yesterday they expected a slight drop in bookings as leisure travelers - jittery over the U.S.-led war on Iraq and the deadly flu-like illness (SARS) that had killed 17 and sickened 456 worldwide - chose to stay at home and delay their trips to Taiwan.

Many of the executives interviewed were reluctant to forecast just how drastically their earnings would be affected by those crises, saying the impact might not be as strong if the Middle East conflict remained short and contained.

Charlotte Chen of the Landis Taipei said the hotel's occupancy rate remained stable, adding that the property had not received "much cancellations" in the past few days.

"I think those businesses that rely on Japanese tour groups will be hurt the most by the tourism downturn," Chen said. "We have heard that several tour groups from Japan have canceled their bookings because of war worries and fears over SARS (severe acute respiratory syndrome)."

Panic cancellations were also evident following the September 11 attacks on the U.S. and the Bali bomb blasts in October last year.

In an informal survey conducted by the Landis Group, poll results showed that the occupancy rate among Taipei hotels peaked at 70 percent on Monday, said Chen.

"It's not very good compared with bookings in March or April of 2002," she said.

But Luanne Li, marketing communications director of the Grand Hyatt Taipei, said her hotel had managed to keep its March occupancy rate at 80 percent.

"(The war and SARS) did affect us a little," Li said. "Our room occupancy rate saw a three to four percent drop in March."

The executive noted that Asian travelers, particularly the Japanese, canceled their Taiwan bookings. Some tech executives from the U.S. also delayed their trips to the country, she added.

"This however won't put a stop to our overseas promotions," said Li. "We will keep on selling our packages abroad and intensify our campaign targeting local tourists."

The Grand Hyatt Taipei is currently pushing for its NT$4,999-package-for-two inclusive of a one-night stay at the Hyatt. On weekends, the hotel said it was throwing in free buffet breakfasts for couples, she added.

Chen of the Landis Taipei said she expected other Taiwan hotels and resorts to roll out similar products in the coming weeks in an attempt to bounce back and remain competitive.

"Many Taiwanese may be putting off their European, U.S. and Asian holidays but that does not mean that they will be giving up their recreational activities altogether," she said. "Instead of taking those long-haul trips, we expect them to spend their money at home. That's where we come in. Competition encourages the creation of new, low-cost packages."

The Westin Taipei, another five-star property, said business was thriving despite the projected travel fallout fueled by war fears.

"The bulk of our earnings comes from business travelers since we only have 200-plus rooms," Westin communications manager Joyce Weng said.

"Unlike leisure groups that can cancel their trips at the drop of a hat, businessmen 'need' to travel. This makes our core market more stable compared with other properties."

The Sherwood Taipei, a small deluxe property in downtown Taipei, was also confident it would weather the tourism downturn.

"We have a loyal following," said hotel executive Paulina Lin. "We target individual business travelers, not tour groups."

Earlier, a number of airlines told the Taiwan News that they too were feeling the pinch of the U.S.-led military strike on Iraq as cautious passengers had opted to put their long-haul trips on hold.

EVA Airways, Taiwan's No. 2 international carrier, said it had been seeing a drop in passenger volume since mid-March.