Customer Relationship Management

In

Indian Hospitality Industry

Submitted To: Date Submitted

Dr. Reeti Agarwal 05/01/2014

Submitted By:

Namita Bohra [JL12PGDM096]

Rohit Pal [JL12PGDM126]

Shailesh Tiwari [JL12PGDM135]

Suyash Misra [JL12PGDM162]

Saumya Pandey [JL12PGDM182]

INTRODUCTION

We wish to express our sincere gratitude to Dr. Reeti Agarwal for mentoring us and

providing us with immense help till the completion of this project.

Here we also take opportunity to record a good team work which forms the basis of this

projects completion.

Table of Contents Indian Hospitality Industry ........................................................................................................... 1

Introduction ...................................................................................................................................... 1

CRM Practices in a Whole Industry .............................................................................................. 2

CRM Practices in Hotel Industry ................................................................................................... 3

Introduction ...................................................................................................................................... 6

Indian Hotel Company Limited (Oberoi Group of Hotels) ............................................................ 6

CRM Practices in Oberoi Group of Hotels .................................................................................... 6

Introduction ...................................................................................................................................... 8

East India Hotels Limited (Taj Group of Hotels) ........................................................................... 8

CRM Practices of East India Hotels Limited .................................................................................. 8

Conclusions ..................................................................................................................................... 11

THE OBEROI ................................................................................................................................ 11

THE TAJ ....................................................................................................................................... 11

RECOMMENDATIONS ..................................................................................................................... 12

1

Indian Hospitality Industry

Introduction

The Indian tourism and hospitality industry has emerged as one of the key industries driving

growth of the services sector in India. Tourism in India has registered significant growth in the

recent years and the country has tremendous potential to become a major global tourist

destination.

Indian tourism industry is thriving due to an increase in foreign tourist arrivals and greater

number of Indians travelling to domestic destinations than before. In the past few years the real

growth has come from within the domestic sector as around 30 million Indians travel within

the country in a year. Strong growth in per capita income, rising young population coupled

with changing lifestyles are leading to greater expenditure on leisure services.

Hotels are an important component of the tourism product. They contribute in the overall

tourism experience through the standards of facilities and services offered by them. The

fortunes of the hospitality industry have always been linked to the prospects of the tourism

industry and tourism is the foremost demand driver of the industry.

Travel & tourisms contribution to capital investment is projected to grow at 6.5 per cent per

annum during 2013-2023, above the global average of five per cent. The tourism policy of

Government of India aims at speedy implementation of tourism projects, development of

integrated tourism circuits, special capacity building in the hospitality sector and new

marketing strategies

Usage rate or its inverse "vacancy rate" is an important variable for the hospitality industry.

Just as a factory owner would wish a productive asset to be in use as much as possible (as

opposed to having to pay fixed costs while the factory isn't producing), so do restaurants, hotels,

and theme parks seek to maximize the number of customers they "process" in all sectors. This

led to formation of services with the aim to increase usage rate provided by hotel consolidators.

Information about required or offered products are brokered on business networks used by

vendors as well as purchasers.

In looking various industries, "barriers to entry" by newcomers and competitive advantages

between current players are very important. Among other things, hospitality industry players

find advantage in old classics (location), initial and ongoing investment support (reflected in

the material upkeep of facilities and the luxuries located therein), and particular themes adopted

by the marketing arm of the organization in question (for example at theme restaurants). Very

important is also the characteristics of the personnel working in direct contact with the

customers. The authenticity, professionalism, and actual concern for the happiness and well-

being of the customers that is communicated by successful organizations is a clear competitive

advantage.

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The Indian hotel industry is experiencing increased globalization, competition, higher customer

turnover, growing customer acquisition costs and rising customer expectations, meaning that

hotels performance and competitiveness is significantly dependent upon their ability to satisfy

customer efficiency and effectively. In the hotel industry the basic products (rooms) are very

similar, when comparing the same quality level the customer focuses are on soft factor like

personal treatment, personalization, one to one marketing and attention by the hospitality

professions. The hotel industry enjoys easy data access as the guests need to register their name

and address during check-in and in some countries, guests even need to provide their passport

data and more detailed private information. In addition, people are very likely to share their

personal preferences with hotel staff to make their stay more enjoyable. The hotel can make

use of this database combined with IT and give the guests a unique experience. They can

establish a close relationship with customers and meet their needs perfectly. In order to be able

to compete on a highly competitive market a hotel has to meet every single customer's needs

and expectations. To do this it is important to understand the aspects of business performance

that persuade customers to become repeat purchasers and to exhibit behavioral loyalty as it

costs five to ten times more to sell to a new customer than to an old customer. To enhance

profitability and guest satisfaction and loyalty, the organizations (hotels) should focus on

implementing Customer Relationship Management (CRM) strategies that aim to seek, gather

and store the right information, validate and share it throughout the organization. Dominici and

Guzzo (2010) said that to be successful in the market it is not sufficient to attract the new

customers but to concentrate on existing customers implementing effective policies of

customer satisfaction and loyalty. Appiah and Kingsley (2010) stated that as the world

economy is becoming globalized, competition has intensified and the differences in products

have faded. Consequently, businesses have become fixated on customer relationship

management (CRM) as it has become a central orienting point with organizations increasingly

focusing on managing customer relationships as a strategic capability to achieve market

leadership and profits. Parvatiyar and Sheth (2001) in their conceptual framework said that the

two most important process of Customer Relationship Management include proactive customer

business development and building partnering relationships with the most important customer.

CRM Practices in a Whole Industry CRM is about managing customer knowledge to better understand and serve them. It is an

umbrella concept that places the customer at the center of an organization. Customer service is

an important component of CRM: however CRM is also concerned with coordinating customer

relations across all business functions, points of interaction, and audiences. CRM can bring a

lot of benefits for hotels such as customer satisfaction and loyalty, increase in revenues,

decrease in costs, and a sustainable competitive advantage. CRM involves the integration of

technology and business processes used to satisfy the needs of a customer. In terms of IT, CRM

is defined as a Pacific Business Review International Volume 5 Issue 12 (June 2013)72

enterprise wide integration of technologies and functions such as data warehouse, websites,

intranet/ extranet, telephone support system, accounting, sales, marketing and production. In

other words, CRM is a notion regarding how an organization can keep their most important

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customers and at the same time reduce costs, increase the values of interaction to consequently

maximize the profits.

CRM Practices in Hotel Industry Scrubbing data means standardizing the address and other crucial fields to ensure mail ability.

Standardized data is crucial to support effective house holding (the process of matching

similar records into a single customer master record or into creating a new master). A related

requirement is NCOA matching, periodically passing records through the National Change of

Address database, to identify people that have moved and told the postal service, but not you.

A number of software vendors offer licensed or hosted solutions to data

hygiene challenges. Some are shrink-wrapped and some are large- applications. Group 1

Software, well established in the gaming segment of the industry, offers a broad range of data

quality and CRM tools to optimize the mail ability of every record in your system. Finally,

guest profiles and preferences change over time. A complete CRM strategy needs a vehicle for

updating the profile accessible to both the guest and to staff.

Channel Integration and Consistency

Many of todays consumers prefer to conduct transactions over theInternet. As long as the

Web-based front-end systems are integrated into the other systems (PMS and CRS for

example), this is a good thing for the hotel enterprise. Some travelers would prefer to speak to

a live reservations agent, whether at the property or in the central reservations office. The key

thing for the hotel company is to ensure that the guest receives the same recognition and

differential treatment no matter what channel they prefer to use to interact with the firm. Just

as we strive to offer consistent rate and availability from all channels, we must strive for

consistent guest recognition from all channels. Likewise, as we work for channel integration in

guest recognition, so must we reach for it in service delivery. Integrating many of the various

hotel management functions at the database level is one strategy that has been attempted by

several industry stalwarts.

Ranking and Discrimination

Some customers are worth more to your business than others and you need to invest more of

your scarce resources in the most valuable customers, and less in the others. This strategy is

perhaps the most difficult element of CRM for hoteliers to accept, but it is absolutely essential.

While the grandtradition of hospitality is to value every guest and deliver outstandingservice

to all of them, in practice it simply isnt possible. Furthermore, there are certainly toxic

customers that are simply bad for your business and you want to make sure they dont come

back. Ask any casino about their black-list policiescertainly a legitimate form of CRM

inaction. There are any number of ranking methods available to the industry,

among them frequency program production, recency/frequency/ money (RFM) scores or

simply number of room nights. Siebels Dunham said, Whatever scoring metric makes the

most sense for your organization, you must include a multi-channel strategy to advise the agent

on the right product bundle at the right price to that high- or low-value guest at the right moment

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in order to cross-sell or upsell them. That is one way a complete CRM strategy drives top-line

revenue.

Two-way Personalized Dialogs

This area is perhaps the most exciting and potentially rich CRM strategy active today. Rather

than relying on mass-market advertising or

segmentednewsletters to members of a frequency program, this element pursuespersonalized

communications with customers as individuals, with content specifically about the customers

interests and preferences. Most of these communications include a tangible and specific call to

action, encouraging the customer to do something with the communication, thus establishing a

two-way dialog. These dialogs serve both to reinforce the connection between the firm and the

customer and to provide opportunities for more information and sales with the customer.

Customer Relationship Management Software for the Hotel Industry

Guest Ware is a unique Customer Relationship Management System

(CRMS) designed specifically for the lodging industry to provide

personalized guest recognition and exceptional service quality. Leadinghotel management co

mpanies use Guest Ware to improve guest.satisfaction, lower

operating costs, build guest loyalty, and increase revenues.

Guest Ware is installed in over seven hundred hotels and resorts worldwide; including Marriott

International, Kimpton Hotel Group, Hyatt Hotels, Star wood and many independent hotels

and resorts.

Marketing Solution - The CRM Approach

Now more than ever, it is critical for hospitality sales and marketingprofessionals to maximize

their return on investment (ROI) in marketing. Experts agree targeted marketing to existing

customers is the best way to increase marketing ROI. Most industry consultants estimate the

cost of finding a new customer is between 5 and 10 times the cost of retaining an existing

customer.

Improvement Analysis - Implement Process Improvement

Industry surveys show that guests are less likely to return if they

experiencea problem during their stay. Guest Wares Improvement Analysis toolsprovides with

the information to eliminate recurring problems and

keepguests coming back, so to lower operating costs and increase guestsatisfaction at the same

time.

Comment Card Tracking - Listen to your Customers

Customer survey on restaurant or an extensive questionnaire of guests, the Guest Ware

Comment Card Tracking system assists to manage customer feedback. Guest Ware will

improve productivity in the follow-up process and provide valuable management reports to

maximize the benefits of your surveys.

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Communications Server - Two-way Messaging

The Guest Ware Communication Server integrates two-way messaging (or other types of text-

based messaging) with Guest Wares Rapid Response. It allows staff to receive and close

requests and maintenance issues from a pager or cell phone. The software helps streamline

service delivery and uses existing e-mail systems or a modem to communicate with most two-

way messaging devices.

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Introduction

Indian Hotel Company Limited (Oberoi Group of Hotels) The Oberoi and Trident are two brands of five star hotels operated and owned by the Oberoi

Hotels & Resorts located in several cities in India and across the world. When located together

in a single complex, they are collectively called Oberoi Trident.

The Oberoi Group is a hotel company with its head office in Delhi. Oberoi, founded in 1934,

owns and/or operates 30 hotels and three cruisers in five countries. It remains one of the most

decorated hotel chains in the world with many of its group hotels bagging various awards and

accolades from Travel Leisure, Cond Nast Traveler, Forbes and Galileo.

CRM Practices in Oberoi Group of Hotels

Customer Relationship Management Function has been prevalent in the hotel industry since

the inception of the concept of boarding and

lodging.The Oberoi has enjoyed a superior position regarding its core product offering and

supporting services. It has an excellent brand value which it consistently reinforced by

delivering exceptional services. The Oberoi, over the years, has acquired an outstanding brand

value which would help sell the hotel solely on its name. Oberoi has a very loyal patronage

from its guests, which has ensured a high market share in the high-end segment of the market,

which they cater to. Oberoi has, thus, been charging a premium for the value that its guests

derive from its services. Till about five years back, The Oberoi did not have any competition

and sales and marketing team did not have to sweat it out to acquire and attract potential clients.

Today is a changed scenario. Because of globalization, India has seen the entry of International

hotel chains, there has been a lot of pressure on the sales and marketing team to perform. Oberoi

has seen its market share eroding due to price wars and cost cutting amongst the five star

hotels. The loyal guests of The Oberoi have started switching due to similar international

standards of services available at cheaper rates. The

Oberoi is thus working hard to sell its services since the product has become generic in nature

According to the Oberoi the terms-Customer Relationship Management and Relationship

Marketing are used interchangeably therefore they do not have a separate CRM department as

the outlining functions of the CRM process are integrated in the Sales and Marketing operation

They use a variety of after sales tactics for customer bonding and loyalty. Co-operative and

collaborative relationships with customers seem to be

themost prudent way to keep tracks their changing expectations andappropriately influencing

it. The Oberoi has ensured the above by the various end user and booker programs such as:

Top The Oberoi Plus

This is an end-user program with an enrollment fee of Rs.575 only. It is beneficial for guests

who use the services of the hotel. Each time a guest spends, he accumulates points which can

be redeemed for any services of the hotel. By enrolling and rewarding customers with the

help of thisprogram, the hotel ensures that a greater bonding towards long-

termcustomer retention.They have also tied up with the airlines forinterchangeable redemption

of points.

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Connections Bookers Program Bookers are an important link in materializing an actual sale therefore they need to be kept

motivated to push the hotel when the reservations are made by a corporate account. Each time

a booker gives as reservation to the hotel he gets credit points for that and which can be

redeemed for gifts or any hotel services.

Food Festivals

The Oberoi conducts various food festivals at its Restaurants. Regularly and sends invitations

to its more profitable Clients.

Tie-Ups

The Oberoi invites top clients like CEO, Managing Directors and key decision makers of diff

erent companies to social evenings specially arranged to further enhance the Customer relatio

nship management functions.

Management Commitment

For many firms it takes years for the entire organization to begin, to demonstrate a customer

focus. It is difficult for employees to stay committed to customer focus when the chief

executive and the manger themselves are not dedicated to customer needs. What kind of

message do managers send workers if they tout customer need recognition as critical to

providing good customer service, yet dont even know the names of their employees. On the

other hand think of the tone the mangers could set in an organization by making it a point to

warmly greet all employee by name. Management should set the pace by demonstrating how

to deliver internal and external customer satisfaction.

Internal customer is the employee who receives and uses the output from another person or

area. Treating this relationship with the same respect and attention given the external customer

relationship is the focus of the internal customer concept.

Companies are responsible for the expectations they create they should know how their

products, services, promotions, personnel, facilities and reputation affect customers. They

should know what their customers weigh this information. This process - how expectations are

created and formed in to standards by which an organizations performance is measured can

be a valuable planning tool for management.

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Introduction

East India Hotels Limited (Taj Group of Hotels) Taj group of hotels is the largest chain in India- with several Hotels abroad also. The parent

Hotel-The Taj Mahal Hotel, Bombay is rated among the 10 best hotels in the world. The

founder of the house of Tatas, Mr.Mansheti Nuser Wanji Tata, in 1894formed the Indian

Hotels company and built the exquisitely beautiful Taj

Mahal Hotel in Bombay. The doors opened in 1903 and has been alandmark by the Gateway

of India ever since. In 1971, the 220 roomed Taj Mahal Hotels in Bombay was converted to

a325 Roomed hotel, and a multistory structure was built adjoining theoriginal property. In

1972, the Lake Palace at Diaper and Rambagh Jaipur was linked to the Taj and a Chain was

born. In 1974, a new company was floated, which created the Taj Coromandel in Madras. In

the same year the chain broadened with the acquisition of fort Aquada Beach Resort in

Goa...In 1976, Fishermans Cove was built which is 30 minutes drive fromMadras on the Bay

of Bengal with a Private Beach. In the same year, the Taj Group opened the Taj Flight Kitchen

in Bombay, Catering to both domestic and international flights.

The Taj group also has eight business Hotels spread over different corners of the country. There

are 20 Taj Leisure Hotels out of which 16 are in India and 4 are abroad. The Taj Group is

Indias one of the finest and largest hotel chain which is offering 48 hotels within 34 locations

across the subcontinent. This

growthhas been as diversified as it has been impressive. In addition to itsadmirable luxury

hotels, The Taj Group includes business hotels,

beachresorts, palace, garden retreats and other comfortable accommodation.Talking about

Internationally, The Taj Group also has properties in key cities like London, New York,

Washington DC Chicago and also at locations in the Middle East and in African states. The

Taj group uniqueness lies in the sum of its parts in providing a

livingheritage of India, together with superlative comforts and its modernfacilities. All of these

things combine to make The Taj Experience a must.

CRM Practices of East India Hotels Limited

Taj Inner Circle

Taj Inner Circle, the frequent guest programme, allows guests to earnpoints whenever they stay

or dine at The Taj. Guests can then redeem their points for specially selected rewards like

complimentary stays at Taj hotels, resorts, and palaces.

Taj Epicure Plan

The Taj Epicure Plan is an optional add-on dining plan to the Taj Inner Circle. Members earn

Epicure points for expenditures incurred on food and beverages, at participating Taj restaurants

in India.

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About the Taj Inner Circle

The Taj Inner Circle has three membership levels Blue, Silver and Gold. Customers/Guests

join at the Blue level and start earning on their stay or dining or both expenses at all Taj

properties. To qualify for the Taj Inner Circle Silver membership level, customer need to

accumulate 250 points in any continuous 60-day period i.e. spend Rs.25, 000 (INR),

excluding taxes, in any continuous period of 60-days. Members who spend Rs.2,

00,000(INR), excluding taxes, in continuous 12-month period, will beautomatically upgraded

to Gold status. Gold card members enjoy enhanced privileges and accumulate points at a

faster rate i.e. they earn at the rate

of 1 point for every Rs.80 spent, excluding taxes. Gold and Silver cardmembers of the Taj

Inner Circle also enjoy a host of privileges like easier check-in check-out formalities,

discounts and priority wait-listing.

Members of the plan receive a "Smart" membership card for instantrecording, updating and r

edemption of points. Taj Inner Circle Bluemembers who opt for the Epicure Plan will be

automatically upgraded to the Silver level whereas members on the Silver or Gold tier will

continue to enjoy their existing membership levels.

Non-Taj Inner Circle members who wish to enroll on to the Epicure

Plan will receive a complimentary Taj Inner Circle Silver membership.Membership is available

at an annual fee of Rs. 2500, which is payable by credit card, cheque, or demand draft.

Enhanced benefits for Epicure Plan members

As a Silver level Epicure Plan member, one enjoys all the privilege extended against the Taj

Inner Circle Silver level membership. In addition, the member also receives the

following benefits. Free couple entry to the following Taj discotheques on Wednesdays:

Insomnia- The Taj Mahal Palace & Tower, Mumbai My Kind of Place- Taj Palace Hotel, Delhi

Free couple entry to the following Taj discotheques on Saturdays: T2- Taj Krishna, Hyderabad

Free couple entry to the following Taj discotheques on Sundays: Incognito- Taj Bengal,

Kolkata BENEFITS THAT CUSTOMERS ENJOY AS A SILVER & GOLD MEMBER In

addition to rewards, customers enjoy a host of privileges that have been created to enhance

customers experience at the Taj. From the moment customer check in at any of participating

hotels, they will be treated as a very special guest, in more than one way:

Customers will be greeted with flowers & fruits in their room

Check-in & departure formalities will be easier, faster & flexible

Receive special discount on rooms at Taj leisure hotels

Avail of double occupancy at no extra cost

Entitled to a priority wait-list

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Points Redemption

Epicure points can be redeemed to settle stay or dining bills at participating Taj hotels in India.

Points will be instantly deducted from the accumulated points in the membership account.

Members can even entertain or holiday at exotic Taj hotels in exchange of Epicure points.

Redemptions for holidays are subject to availability and prior reservation. Participating Taj

hotels or restaurants can close out bookings for these redemptions. Please note that only Inner

Circle points can be accumulated at Rambagh Palace, Jaipur. Epicure points cannot be earned

at this hotel. Taj Epicure Diners Club Card: Experience the art of fine living with

thisexclusive card, guests can receive exclusive benefits across 43 Tajproperties and over 200

Taj restaurants.

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Conclusions

THE OBEROI The brand value that The Oberoi has created for itself is a result of its consistent delivery of

exceptional services to its customers. Traditionally, at The Oberoi, CRM and relationship

management has been considered to be single function, but to maintain its market share and

fight the competitive situation, the marketing department at The Oberoi is now focusing

on building co-operative and collaborative relationships with the customers with the result that

they have a loyal patronage from their guests, and are, thus, able to charge a premium for the

value given to the customers.

The CRM programs at the Oberoi include The Oberoi Plus for thecustomers and also for the

Bookers to motivate them. The Oberoi also organizes Food Festivals regularly and sends

invitations to its regular clientele and the top CEOs, MDs and business people to further

enhance the CRM functions effectiveness.

THE TAJ The Taj Group is also investing heavily on CRM systems to maintaincustomer databank with

their profiles to give a quicker and

personalizedservice to their loyal clientele. The Taj gives high priority to guestsatisfaction.Th

ey even have an SMS service to keep track of lost/missed calls by the customers while they are

away. They have employed applications like PMS, CRS and CIS to keep track

of customers profiles which includes information such as their spendingpatterns and their

special needs also. They employ data mining technique to get and act on data and also give

credit to the employees who get compliments from the guests. Other reward programs include

Taj Inner Circle and the Epicure plan to give the customers a host of privileges as silver and

gold card holders. The challenge is to balance between the long-term goals and short-turn gains

Some key learnings are:

Long turn, profitable relationships can be built when both, the service provider and the customer, rise above the 'transaction' approach, and work in an atmosphere of

mutuality and trust.

Relationships, like real life, goes through ups and downs, and it takes a great amount of maturity and courage to handle the 'lows'.

Relationships provide 'security'. Strategic bundling of services is a useful methodology in this context

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RECOMMENDATIONS In this era of globalization where Customer is the King, customerexpectations are going up

which is making the situation more and

morecompetitive. As the product is becoming generic in nature, the hotelindustry can no longer

rely on the traditional marketing strategies to retain the customers. Customer Relationship

Management is one of the key tools to fight this cutthroat competition and stand out as

a superior brand. On the basis of the study, I would like to recommend some suggestions which

could be implemented profitably by the industry.

Surveys: Conducting monthly guest/customer surveys, club surveys, room comment

cards, toll free guest assistance centers can help in getting customer feedback and to

improve in the areas where there is a lag as suggested by the feedback.

Maintaining suggestion boxes at every touch point/point of interaction with the

customers.

Taking feedback not only from external customers but also the internal customers i.e.,

the employees.

Proper check on the hotel staffs and processes efficiency by the management, say by

employing Mystery Customers.

Keeping regular track of the sales data for further leads and follow-up

Employing effective CRM software to improve guest satisfaction,

lower operating costs, build guest loyalty, and increase revenues.

Having Guest History programs- keeping a databank of customer profiles along with

such details as room preferences, amenities preferred, special requests, meal

preferences, wallet services, sending birthday cards to the loyal guests and even their

spouses them a hassle-free check-in procedure-like sending them pick-up and drop

facilities.

Employing an efficient system of complaints handling as complaints are the

opportunities to improve, to impress the customers and to turn complaining customers

into loyal ones.

Giving recognition awards to attract old customers.10.Giving the customers a more

personalized and empathic services as building good rapport with the customers goes a

long way in having satisfied and return customers.