The Impact of Guest Experience on Hotel Revenues

The Impact of Guest Experience on Hotel Revenues

How the right technology can result in higher profitability.

Table of Contents

A Case Study: Choice Hotels connection between guest satisfaction and financial success ........................................... 1

How Vail Resorts is creating

“wow” customer experiences .................................. 2

Gain customer loyalty at every stage of the guest life cycle ........................................ 3

Detailed guest profiles can transform your guest experience .................................... 4

The key to achieving higher guest satisfaction is engagement ................................. 6

Enable your staff to be more engaged ............................. 6

Transform your applications .. 7

Avaya Engagement

Environment driving a breakthrough in engagementenabled applications ................ 8

Avaya Team Engagement improves guest experiences .. 9

Avaya Customer Engagement can make the difference between loyal guests and lost opportunities ...................... 9

Avaya Fabric Networking enables engaged guest experiences ................................ 10

Summary ..................................... 10

Learn more ...................................11

Positive guest experience is the #1 criteria that travelers use to select hotels – far outweighing price and location.

Positive guest experiences are profitable too. According to the Harvard Review, customers who had the best past experiences spend 140% more compared to those who had poor experiences 1 . Clearly happy guests can help ensure that hotel revenues remain healthy.

Forrester Research suggests that customer experience is highly correlated with loyalty 2 . The importance of loyalty in the hotel sector can’t be underestimated.

For starters, it’s much less expensive to attract repeat business than to bring in new business. One high-end hotel operator puts the lifetime value of a loyal guest at over $100,000.

Choice Hotels studied the connection between loyalty, guest satisfaction and higher revenues. Here’s what this hotel chain discovered.

A Case Study: Choice Hotels connection between guest satisfaction and financial success

Choice Hotels knew that unhappy hotel guests would not recommend its hotels to others. The online reviews were uneven so the organization decided to take action. By analyzing organization-wide guest satisfaction and financial data,

Choice Hotels found that the 25% of its properties with the highest Likeliness to

Recommend (LTR) scores also had higher-than-average Revenue Per Available

Room. What’s more, the inverse held true for properties in the bottom quarter of LTR. This data suggested that guest satisfaction was tied to a hotel’s bottom line.

With a customer experience management (CEM) system in place, Choice Hotels was able to determine the aspects of its guest experience that most impacted

LTR scores. “Room condition” emerged as one of the biggest drivers. As a result, Choice Hotels instituted a “Great Room Condition” initiative to help avaya.com |

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Studies have shown that improving customer experience can increase annual revenues by more than

$1B for large hospitality companies 3 . properties make sure their rooms always met guests’ great expectations. The organization began by piloting the initiative in a few properties— and participating properties saw LTR scores rise. That gave the company the ability to roll out the program organization-wide.

The initiative had a big impact on Choice Hotel’s bottom line. The chain attributed over $18 million in incremental revenue to increasing guest satisfaction.

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How Vail Resorts is creating “wow” customer experiences

During a recent interview, Darren Jacoby, Director of Customer Relationship

Marketing (CRM) at Vail Resorts shared his secrets for customer-centric marketing success: “Ski resorts used to just be in the ski business. They were concerned about the slopes and weather conditions, accommodations, ski classes and the like. Not anymore.”

Today, ski resorts – along with cruise lines, theme parks, hotels and more – are in the

“experience” business.

These organizations aim to deepen the entire customer experience by creating a highly personalized, emotional connection. That requires taking marketing to a whole new realm.

Consequently, Vail Resorts overhauled its entire marketing strategy and refocused its efforts on being wholly customer-centric. Here’s how technology helped Vail achieve its goals.

Link customer information

Vail Resorts once housed all guest information in disparate systems. “We might have known that you stayed in one of our lodging properties, but we might not have known that you had a season pass or that you had taken a ski school lesson, for example. We weren’t connecting the dots on all the customer touch points,” Jacoby said. His first step? Building a database that integrated all guest information.

Make emotional connections

“We start with the guest at the core,” Jacoby said. “We try to understand our guest and what motivates that guest. Underneath that, we’re doing micro-level segmentation to really understand the nuances and personalized pieces of content that we need to relate to that guest. Then we’re taking all of that avaya.com |

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Creating an unparalleled customer experience is a cost effective way to help drive revenue, loyalty and support from your guests.

Wowing guests with your hotel décor, trendy spa treatments and really good service is no longer enough.

information and automating it through our marketing campaigns. Instead of sending out one email or one direct-mail piece, we’re sending out one piece that has multiple iterations – so different people get different components and pieces of the campaign.”

Harness social media

“Originally,” Jacoby said, “we put RF [radio frequency] technology into our passes so our guests wouldn’t have to fumble around and take off their gloves to show their lift ticket when it was scanned. But then we said, ‘we’ve got all this great infrastructure; let’s create a social game that takes this experience to the next level and ties in what you’re doing on the mountain with a digital experience.’”

This idea led to the creation of EpicMix, an app that allows Vail Resort guests to share their vacation experiences via social media. The response was astounding. Nearly 100,000 guests activated their EpicMix accounts and 45% of them shared their results on Facebook and Twitter. Vail Resorts views the app as a resounding success that creates real value for both its brand and marketing efforts.

Turn happy customers into brand ambassadors

“It’s really been amazing,” Jacoby said. “We had almost two million social posts this year, and over half of those included a photo. If you take Facebook’s average of 130 friends in your network, that’s [potentially] 260 million impressions. Those are all people talking about our brand and sharing their experience about that brand with their family and friends.

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Gain customer loyalty at every stage of the guest life cycle

Hotels that are struggling to deliver that engaging guest experience need to move beyond features, products and processes by creating a positive relationship derived from engagement enabled apps, personalization and quality experiences.

Companies like Ritz-Carlton and some of the well-known airlines practice this philosophy. These companies pride themselves on engaging customers and exceeding expectations. Each one has developed an extensive database of customer information so they can analyze how successful their service has avaya.com |

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Technology is the key to managing a guest’s experience at all stages of a visit—from the moment that a guest plans a trip to when they check in, are on property, check out, and even after they have walked out the door. been, what it lacks, where it could be improved, and how to predict what these customers may expect in the future 6 .

In other words, they’ve used technology to understand gaps and unified the information silos of guest interactions so they’re in a position to deliver an engaging guest experience.

Detailed guest profiles can transform your guest experience

The right technology can help you profile your guests at every hotel interaction

(reservations, concierge, check-in, room service, etc.) and integrate that information with the property management system (PMS) and CRM. To understand how to engage customers, hotels need to tailor communication options to an increasingly tech savvy guest base and ensure that guest outreach is on-message and targeted to the individual, while taking into consideration that today’s travelers:

• Depend on mobile devices throughout all stages of travel

• Prefer online and digital communication to human interaction

• Expect speedy service delivery

• Rely on social media for recommendations and past reviews

Off Property: The more you know before they arrive, the better

When guests contact your hotel for prices, services and other information, what if you knew your guest’s history such as: type of trip, first time or repeat guest, number of visits, and average spend? Their preferences such as: coffee, high floor, quiet room, a newspaper, or feather pillows? What if you could access their complete guest profile during the conversation by automatically pulling up past records from CRM or PMS databases? How much more engaging could your customer experience be if:

• All guest profile information and past activity was available in real-time so your hotel staff can anticipate needs for a repeat or frequent guest?

• Your guest data was always current and accurate?

• You could provide more engaging guest experiences from improved staff preparedness?

• Your hotel was able to track and respond directly to guest comments on social media? avaya.com |

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Today’s travelers value brands that fit into their mobile lifestyle and can adapt to their technological demands and preferences.

What if before guest check-in you could: u Alert a guest that their room is available by sending a message to the guest’s

mobile device? Or what if your hotel app could be engagement enabled to

serve as a property concierge where guests can click on a link or help me

button within your hotel app and be connected either by video or voice to

your hotel staff so they can receive pre-arrival check-in services?

What if, once your guest was on property you could: u Enable a guest to download your hotel app that is integrated with a guest’s loyalty account so you could recognize them as a VIP and your hotel staff are notified by text so that they can address the guest by their name as soon as they walk into your hotel? u Engagement enable your guest mobile app so it is easy for guests to connect with a live hotel staff with a click of a web link for common needs such as housekeeping, room service, or valet services? u Turn that mobile app into an engagement enabled app so that guests can instantly connect with a hotel staff or also enable them?

– Request a wake-up calls and receive a personalized confirmation

– Receive a text notification when there is voicemail in the room phone

mailbox

– Use text chat to request hotel services and to get a reply from hotel staff u Push personalized advertising content to a guest’s mobile and guests are

able to instantly talk to a hotel staff by simply clicking on a link? During their

conversation, a real-time speech analyzer recognizes certain keywords and

pulls up more detailed information about the services as they converse. Your

engagement-enabled mobile app can makes it easy to purchase suite

upgrades, spa treatments and room service or take out delivery.

u Use an engagement-enabled app in your casino to deliver a SMS message to

notify the right casino host when a customer hits the jackpot, enabling the

host to congratulate the guest and offer comps by voice or video? In

addition, when an engagement-enabled guest is about to reach his or her

pain threshold, the casino host can offer a free meal or ticket to a show

through their engagement-enabled app to help keep the guest happy and

inside the building.

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Avaya is adopting engagement as its driving principle and helping hotels engagement-enable their solutions and mobile guest applications, such as room keys, to enhance and extend those engagement capabilities.

For hotel staff, what if they could: u Pull together a video conference session with catering, logistics and

operations members to discuss some last minute changes to a customer

event with just once click from their mobile?

You can. Avaya can help your hotel turn all these “what ifs” into reality.

The key to achieving higher guest satisfaction is engagement

Driven by hospitality business needs, not technology silos, Avaya helps you consistently increase satisfaction across all customer touch points.

Instead of handling each customer interaction independently, you can connect all of a customer’s engagements across their entire journey. For example, you can track web, mobile, and customer service department interactions. Enable customers looking for information on your website to click to chat, click to call, or click to video with your staff. By connecting all of your customer touch points, you create a seamless experience.

Enable your staff to be more engaged

To create an engaging customer experience, you need up-to-the-minute information in order to truly anticipate your guests’ needs and wants. That intelligence requires access to a high speed, real-time data repository for tracking, collecting, and sharing relevant data points across your organization.

Imagine how much more personal, relevant and engaging your customer experience could be if you could:

• Monitor, store and access guest information in real-time across all touch points including web, mobile, and enterprise transactions

• Track multiple conversations across all communication channels to access the comprehensive and complete profile you need to provide better customer service and more personalized on-going conversations

• Capture and consolidate guest data across web, mobile, and contact center touch points to simplify data mining and analysis

• Collect and preserve information about your guest’s web visits to better personalize follow-on call routing and self-service avaya.com |

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Transform your applications with

Avaya Engagement solutions to deliver unique personalized guest experiences

• Simplify the delivery of real time guest information to agents via screen-pop without the use of complex, fragile computer telephony

• Track repeat callers, provide a better customer experience, and handle service abusers more efficiently

• Enhance staff awareness of key events, such as informing front desk staff when guests make a new reservation

• Save responses from outbound promotions or notifications and tie to incoming guest calls

80%

of companies say they deliver “superior” customer service

Source: Lee Resources

Transform your applications

Reinvent the definition of guest experience with Avaya

Engagement Portfolio

Avaya is the leading provider of customer and team engagement solutions as well as future-proofed networking architectures to create mobile engagement environments for better guest experiences, increased productivity and higher profitability. Avaya solutions are interoperable with hotel’s existing networks and applications, allowing for the seamless integration of engagement solutions.

The entire Avaya ecosystem allows companies to harness the power of engagement to increase customer lifetime value and drive business performance.

Avaya Engagement Portfolio avaya.com |

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78% of consumers have bailed on a transaction or not made an intended purchase because of a poor service experience.

Source: American Express

Survey, 2011

A partial list of products in the engagement portfolio include:

• Customer Engagement Solutions: Avaya Elite Contact Center, Avaya Experience Portal, Avaya

Social Media Manager

• Team Engagement Solutions: Avaya Aura Platform, Avaya Scopia® solutions, Avaya Aura

Conferencing

• Mobility: Avaya Communicator for iPhone, iPad, Android devices

• Fabric Networking Solutions: Avaya Virtual Switching Platforms, Avaya Ethernet Switching Routers,

Avaya WLAN

• Engagement Environment: Avaya Engagement Development Platform, Avaya Context Store Snap-

In, Avaya Real-Time Speech Snap-in, Avaya WebRTC Snap-in, Avaya Work Assignment Snap-in

• 3rd Party Business Applications and Partner Enablement: Group Tiger, DuVoice, Libatel, Nevotek,

FCS Computer Systems.

• Cloud: Avaya Private Cloud Services, Avaya Powered Cloud Services, Avaya Branded Clouded

Services

Avaya Engagement Environment driving a breakthrough in engagement-enabled applications

Most any vendor can provide a mobile website or application but only Avaya can properly engagement-enable your applications to deliver a truly personalized and unique guest experiences with the Avaya Engagement

Environment.

On average, loyal customers are worth up to 10 times as much as their first purchase.

Source: White House Office of

Consumer Affairs

The Avaya Engagement Environment is an application development platform that allows customers to add communications capabilities to their applications.

The single, integrated platform extends across multiple devices or systems, enabling enterprises and developers to build and deploy collaboration and customer experience management applications in days without prior communication development skills. This allows you to decide which capabilities are required, and how to best incorporate them with your existing investments and processes.

Avaya Engagement Environment can help solve other unique communications and collaboration challenges that face hospitality organizations. You can create solutions with tailored capabilities that can differentiate the way you respond to customers, and collaborate across locations because Avaya Engagement

Environment is:

• An open, extensible applications development environment

• Multimodal, working across communication channels, processes, and systems

• Fully integrated into the Avaya Aura ® Platform for rapid integration with builtin scalability, security, and virtualization avaya.com |

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As in their personal lives, guests increasingly want a response from businesses just as quickly, whenever, wherever and through whatever channel they prefer.

The Avaya

Engagement

Architecture enables you to reinvent the definition of guest experience.

But what makes Avaya Engagement Environment unique is its simplicity.

Developers no longer need a deep understanding of communications solutions or protocols to create meaningful applications that solve important issues. With the introduction of the Avaya Engagement Designer, that simplicity has been greatly enhanced.

Avaya Team Engagement improves guest experiences

When aligned with your business processes and objectives, a Team

Engagement solution can provide your contact center, front desk and hospitality staff with access to a wide array of productivity applications that improve efficiency, productivity and guest experience. For example, Avaya

Team Engagement solution allows your organization to:

• Use one familiar interface to access many communication applications, regardless of location, which makes contact center agents, hotel staff and back office more efficient and productive.

• Have a single contact number, regardless of the device, which improves staff responsiveness and customer satisfaction.

• Improve collaboration and increase time-to-decision by unifying telephony, email, calendars, corporate directories, presence, conferencing, and Instant

Messaging.

• Bring third-party conferencing and mobility solutions in-house and eliminate the expense and learning curve. By leveraging your enterprise dialing plans, you can further reduce costs.

Avaya Team Engagement is about bringing everything together all in one portfolio. You get everything you need to allow your users to work productively wherever they happen to be.

Avaya Customer Engagement can make the difference between loyal guests and lost opportunities

With the use of mobile devices, search engines, text messaging and social media commonplace, connecting with people or information is instantaneous.

This rapidly changing environment means hotels need to evolve their customer experience management processes and contact center capabilities just to meet, let alone exceed, guest expectations. avaya.com |

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It takes

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positive experiences to make up for one unresolved negative experience.

Since exceptional customer experience depends on knowing your guests and delivering a highly personalized, engaging experience, arming your contact center with powerful customer experience management capabilities should be at the heart of your guest experience strategy. How your front desk and contact center staff manage guest communications can make the difference between loyal customers and missed opportunities. The Avaya Customer Engagement solution can help you drive higher performance by improving the quality and value of guest interactions, providing:

Source: “Understanding

Customers” by

Ruby Newell-Legner

• Increased loyalty with valuable customer relationships

• Reduced operating costs

• Competitive differentiation

3 in 5

Americans

(59%) would try a new brand or company for a better service experience.

Avaya Fabric Networking enables engaged guest experiences

Hoteliers that want to get customer and team engagement solutions may be blocked from doing so because of their networks. Engagement solutions need flexible and robust network infrastructures.

Avaya Fabric Networking is a pioneering solution that transforms the way networks are deployed, implemented and operated. It is a fabric connect based architecture which simplifies networking while helping maintain security. It enables hotels to provide secure BYOD to mobile environments as well as separate critical applications from non-critical applications.

Source: American Express

Survey, 2011 Summary

With Avaya, organizations can build on existing systems and deliver a radically different approach to communications and customer service. It transforms traditional, single-purpose solutions for voice, video, e-mail and instant messaging into a true “Engagement” architecture. This enables hospitality organizations to:

• Deploy an interconnected team and customer engagement platform that eliminates information silos and provides a comprehensive view of guests and their history

• Leverage broadband internet to enable guests to use their own devices to request and book services

• Create an infrastructure that is capable of storing guest interaction at every touch point

• Provide the tools needed for the staff to engage with guests avaya.com |

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81%

of companies with strong capabilities and competencies for delivering customer experience excellence are outperforming their competition.

Source: Peppers & Rogers Group,

Customer Experience Maturity

Monitor, 2009

The result is a solution that simplifies engagement and cost savings. Most importantly, it provides:

• A platform that abstracts the complexity of the communications layer from the applications layer, enabling developers to focus on business needs and requirements rather than on becoming experts on communications solutions or protocols

• A foundation that offers scalability, reliability and security for every solution and lets developers concentrate on value creation instead of logistics and interoperability

• A snap-in model that allows capabilities from a variety of solution providers to be included, enabling rapid, more cost-effective solution development

Avaya solutions enable you to realize the total power of engagement when hotels implement guest and staff engagement capabilities and an infrastructure that is capable of supporting them.

According to consumers, customer service agents failed to answer their questions

50%

of the time.

Source: Harris Interactive

Avaya has built its business on connecting people to the right information at the right time in the right context. Whether implementing solutions for a major hotel or providing the infrastructure for a premier international event like the

Sochi 2014 Olympic Winter Games, Avaya offers a complete communications experience with anytime, anywhere access to content from any device.

Learn more

To learn more about how Avaya can help you provide your customers with a memorable, enjoyable experience at every stage of the guest cycle— while increasing revenue, reducing costs, and improving performance— contact your Avaya account manager or authorized business partner.

Visit avaya.com/hospitality for more information and resources for the hospitality industry.

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About Avaya

Avaya is a leading, global provider of customer and team engagement solutions and services available in a variety of flexible on-premise and cloud deployment options.

Avaya’s fabric-based networking solutions help simplify and accelerate the deployment of business critical applications and services. For more information, please visit www.avaya.com

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1 The value of customer experience, quantified, Peter Kriss, Harvard Business Review, August 1, 2014

https://hbr.org/2014/08/the-value-of-customer-experience-quantified

2 Loyalty programs don’t drive loyalty; customer experience does, David Jacques, October 18, 2013,

http://www.customerinput.com/journal/loyalty-programs-dont-drive-loyalty-customer-

experience-does/

3 The importance of customer experience to your business today, Ann Vogl and Clare Buxton,

July 30, 2014,

http://www.heidrick.com/Knowledge-Center/Article/The-Importance-of-Customer-Experience-

to-Your-Business-Today

4 http://blog.medallia.com/customer-experience/choice-hotels/

5 Vail Resorts Creates Epic Experiences with Customer Intelligence,

http://www.sas.com/resources/whitepaper/wp_48883.pdf

6 Closing the gap between guest expectation and management perception, Venkat Rajagopal,

Hotel Business Review,

http://hotelexecutive.com/business_review/2382/closing-the-gap-between-guest-expectation-

and-management-perception

© 2015 Avaya Inc. All Rights Reserved.

Avaya and the Avaya logo are trademarks of Avaya Inc. and are registered in the

United States and other countries. All other trademarks identified by ®, TM, or SM are registered marks, trademarks, and service marks, respectively, of Avaya Inc.

02/15 • MIS7693 avaya.com |

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