Being engaging and relevant is key to finding and keeping loyal customers. We talk to Starwood Hotels & Resorts Worldwide to find out how they are going about it.
Armed with thorough forward-looking reporting on segments and channels at the hotel level, revenue management teams are increasingly able to shape overall revenue activity. Although the business environment has made this a far from straightforward task, established chains have been trying to capitalise on loyalty of their customers and international distribution.
EyeforTravel’s Ritesh Gupta talks to Devdutta Banerjee, Regional Director of Franchise Support at Starwood Hotels & Resorts Worldwide, about the business environment and how the chain has performed this year in a market like South Asia. Banerjee works with the regional and divisional teams to drive performance of franchised properties to improve overall operational efficiencies.
EFT: At this point in time, what are the sentiments towards your business?
DB: The overall business sentiment has seen an upward swing in the recent past especially in India. This is also being supported by the relative lack of bad news emanating from Western Europe. The positive numbers from the US and relative peace in the economic situation has had a positive impact on the travel patterns and we are seeing some good numbers coming in. Having said that one needs to consider that the numbers are nowhere near the peak year of 2007 and the significant increase in supply across all major business and leisure markets have had an impact on the ability of the hotels to drive rate. The uncertainty with regards to Kingfisher Airlines coupled with the high cost of flights in the country has had a huge impact on people travelling and that has impacted the growth of domestic air connectivity. The recent changes in policy have been good for the overall business sentiment and this has led to an improvement in pace in the last quarter of the calendar year.
EFT: Have domestic chains been worse affected by the slowdown than international chains?
DB: The former have the advantage of having people-driven sales organisations while global chains can leverage loyalty programmes and international distribution. However with time, Starwood in India has managed to develop a strong domestic sales force and is able to leverage a very powerful global distribution network which can move and shift business demand. Our loyalty programme in India is the most powerful business driver and in many hotels is the source of more than 80% of the business. With the Indian traveller becoming more exposed and foreign travel no longer being that difficult, the choice of getting rewards outside of the country of origin is a powerful motivator.
EFT: How do you think global chains have responded and what sort of initiatives have stood out?
DB: I can say with certainty that Starwood has ramped up it sales force to capture the burgeoning Indian business and leisure traveller segments. We are offering a plethora of products and services, which are global in reach but are local in flavour. This includes recognising the fact that our guests are well aware of international trends and are very knowledgeable about the very best. Our branded food and beverage options like Prego (Italian restaurant), Kue Bar (Cuban and Latino cultures have inspired Kue Bar’s hip, relaxing surroundings), Kangan (Indian restaurant) and so on to name a few are trendsetters and the ability of the guests to enjoy these facilities in India are huge demand drivers.
EFT: Do you cater for your Indian clients travelling abroad?
DB: Yes we have customised our product offerings internationally as well, to ensure that the Indian traveller travelling outside of India, gets a flavour of India. This has led to a significant growth of Indian travellers staying at Starwood hotels outside of India as well. Macau, which has recently seen the largest Sheraton hotel open, is one of the key destinations for Indians travelling on leisure or for MICE and the extended awareness of Starwood brands in India has been a huge factor in people travelling from India to these hotel destinations.
EFT: How do you measure success of various initiatives?
DB: Our revenue optimisation software, TLPe, has been introduced in most of the key hotels and they have seen a significant lift in performance as against competition. Also, recognising the local demand in India and the potential outbound Indian traveller, we have set up a fully operations Customer Contact Centre which allows our guest to make reservations across the world by dialling a local toll free number. This initiative has made this channel of bookings, the fastest growing channel for us in terms of year-on-year growth.
EFT: What about uncertainties associated with demand?
DB: The increase in supply and uncertainties of demand is something that we have all become used to. The real challenge is that the business cycles that we have grown up with are no longer as relevant as they have been significantly shortened in duration. The growth markets of today may not necessarily be the growth markets of tomorrow. The same holds true for industries and businesses. Our long history and our experience in various markets has allowed us to build a huge knowledge base which we can share within the organisation. Our internal learning mechanisms are extremely robust. The best part about working in such a ‘glocal’ organisation is that we have access to the best of international experience and local knowledge.
EFT: How has the chain performed this year?
DB: This has been a good year for all our hotels in the competitive landscape. With the challenges of topline growth notwithstanding, we have been able to show some significant gains in RPI (RevPar Index) and the overall growth in the region has been stellar from a competitive performance perspective.
The contribution from central sources (other than property direct reservations) has shown a very healthy growth, clearly improving our belief that in the domestic Indian traveller being tech savvy.
We have invested significant sums in digital marketing and the ROI has been very heartening. Our ability to understand trends and business patterns allowed us to drive our marketing efforts in the right direction, be it the channels of reservation or new regions of growth, to drive business into our hotels.
EFT: What are your expectations going forward?
DB: Technology is the driving force and with mobile Internet penetration growing in India, our ability to engage and be relevant to the traveller of today is what is keeping us ahead of the curve. We understand the need to create and develop platforms which interact with the customers.
Social media and its inherent ability to connect with people is one of our key areas of focus. We have been able to harness social media to drive business and engage with customers in a meaningful manner. Going forward, every area of our lives are going to get more connected and better we embrace the convergence of technology and life, the better we will be able to give our customers a ‘wow’ experience.