Hilton Hotel Differentiation
Hilton Hotel Differentiation
Hilton Hotels is one of the biggest players in the US lodging industry. It contributes to about 9% of the total rooms in US lodging market. It has presence in over 78 countries with more than 2500 hotels. Lodging industry is highly capital intensive industry, so to reduce capital expenditure Hilton Hotels opted for self-owned Hotels as well as franchising model with the real estate owners. One of the key features of lodging industry is low switching costs for customers. There is very little margin to differentiate from the major competitors in the industry which include Marriott international, IHG, Accor etc. Key success factor in lodging market is quality of service one provides. Hilton Hotels are highly focused about their service level by providing excellent care to the customers.
Traditionally, standardization of service delivery operations has been one of the very difficult tasks in the industry as one has to operate in different geographies. To resolve this issue and to maintain consistent service delivery across different hotels they installed an integrated technology infrastructure called OnQ. CRM system built over OnQ helped the firm to provide excellent service to the customers and provide competitive advantage over its competitors. OnQ facilitated the firm’s CRM (Customer Really Matters) initiative at each customer touch point. Reason for successful implementation of CRM
* The major organizational factor that facilitated the CRM initiative is that the firm had the same technology platform and distribution footprint throughout the brand. * Sharing the risk with the hotel owners and avoiding separate technology charges encouraged the owners to adopt the CRM system. * Moreover its focus on delivering efficient service to customers also laid the foundation among the people for the acceptance of CRM initiative.
Issue faced in CRM Implementation
The major problem during the implementation of CRM initiative was the delivery of consistent services across each brand event after the CRM systems were in place. This was mainly due to the large number of diversified hotels in the chain across the globe
Issues resolved by CRM package
* With the help of CRM along with recognition of the customer providing personal services was also possible. This helps in tailoring the experience according to customer needs and creating a long term relationship. For eg. Rooms can be pre-assigned and prepared according to customer preferences. * It was also possible to classify customers along different levels (Gold, Diamond etc.) and providing them with differential services. Tiered system allowed the hotels to prioritize pre-assignment and service delivery by identifying most valuable guests. This results in improving efficiency of service by focusing more on most valuable customers.
* To maintain brand name uniform services are to be maintained across the hotel chain. With centralized OnQ infrastructure, it became possible for Hilton Hotels to replicate their services across the various hotels across the globe. * The CRM systems helped the company in differentiating its service as well as optimizing some of the activities which lead to the reduction in operational costs. For eg. OnQ Reservation used data from the CRM, allows the agent to access callers’ personal dossier and update their preferences. This helped in reducing the call time as well as promoted the cross selling.
Another example is having information prior to arrival of customer helped the firm in maintaining efficiencies especially during later in the evenings when less staff is available. * It also helped in service recovery. If a client had some problem during the last visit, identifying the problem helped in responding better next time. * The SALT (Satisfaction and Loyalty Tracking) survey helped in getting essential feedback from the customers. * Monitoring of the various brands across the chain for quality assurance also became easy. It also enabled the firm to open new hotels at a faster pace and consistently deliver the same service.
Summary of Analysis
CRM system implementation at Hilton hotels provided with various benefits in term of improved services, cost reduction & improved efficiency. Maintenance cost of CRM system is low as compared to the overall revenue of the firm. Currently Hilton Hostels are able to leverage CRM system better than competitors. They still need to search for further options available in improving service using CRM.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 19 November 2016
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