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Home Interviews & Features

Opinion: Why hoteliers should ‘brick wall’ customers in 2017

Crystal Chesters by Crystal Chesters
January 4, 2017
in Interviews & Features, News, People
A A

Mohamed Awadalla, CEO, TIME Hotels offers five reasons why we should ‘brick wall’ our existing customer base in 2017

Mohamed Awadalla, Time Hotels CEO

 

As the saying goes, “The day you stop learning is the day you stop growing,” so what can we learn from 2016 that will stand us in good stead for 2017? Well I’m sure every GM would like to increase their hotel’s revenue, innovate ahead of the market, maximise the efficiency of the operation and optimise customer service.

Oh, and let’s not forget the small matter of presenting our owners and investors with an ROI that would not only exceed their expectations, but equally would compare favourably with other real estate asset classes, such as educational, residential, retail and commercial space.

That’s a tall order in any market, so how do we set about achieving it? Despite the advances in technology, I am a traditionalist at heart and I firmly believe that the word ‘hospitality’ gives us a clue as to how we should run our hotels – hospitably! Creating customer loyalty through superior guest service, not online marketplaces. Why?

Well here’s my top five marketing reasons:

  1. It costs five times more to win a new customer than it does to keep an existing guest.
  2. It is more cost-effective to market to existing customers than new ones.
  3. The most important time to acquire customer loyalty is during their first visit
  4. An existing customer is up to 50% more likely to spend money with you compared with the probability of selling to a competitor’s guest.
  5. If you could increase customer loyalty by just 5%, it would increase the average profit per customer by at least 25%.

Now obviously, it is not quite as clear cut as that. Customer loyalty or churn rate can be negatively affected as the result of poor customer acquisition decisions. Sometimes we attract the wrong kinds of customers. For example, online discount deals such as Groupon, which bring in new customers, but only return when there’s another heavy discount on offer. The trick is creating a balance between customers to whom you can provide value with those who represent value to you.

However, I am confident of the great pool of talent TIME Hotels has trained and retained at all levels and I know it’s a cliché, but our human resources is still our greatest asset. It also gives me a great sense of comfort and pride that after all, the hospitality industry employs real people: it’s not virtual or automated and long may that continue.

Tags: commenthospitalityHotelsloyaltyMohamed AwadallaopinionOpinion piecesTime Hotels

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