Benefits of CRM in the Hospitality Industry

A customer relationship management or CRM solution is commonly used for managing leads, marketing, and sales teams. A hospitality CRM system, on the other hand, is a niche CRM designed particularly for the hotel and travel industry. Investing in a Hospitality CRM technology brings about many benefits that quickly outgrow the initial investments. 

It creates a complete database to contain all client-relevant information and also encourages a hotel’s long-term growth. When used properly, it is the driving force behind efficient hotel marketing, allowing hotel businesses to achieve considerable outcomes. 

A Hospitality CRM achieves this by targeting guest interactions and cultivating strong connections with tourists, corporate clients, and other key players. Moreover, it can streamline hotel operations, make it easier to retain both staff and employees, and manage business across multiple locations.  

The COVID-19 outbreak has affected nearly all parts of the hospitality industry. It also introduced new challenges while complicating the ways traditional hotels function. However, there has been a surge in demand for hotels and airlines during 2021 and onwards.  According to a McKinsey survey, over 75% of customers explored a new buying habit during the early years of the pandemic, and more than 80% expect to continue with the new behaviors. 

A customer-centric sector like hospitality must adapt quickly. Here are some of the key challenges that the modern hospitality industry faces that a Hospitality CRM can help you resolve.  

Common Challenges in the Hospitality Industry 

1. Recruiting and retaining employees 

Hiring employees has long been a key challenge in the hotel business. Quality personnel is required in all areas of a hotel, including administration, maintenance, cuisine, cleaning, and front desk. A lack of expertise among individuals graduating from institutions also poses a significant difficulty in the hotel business. 

However, employee management can be made simpler with the adoption of the right technology.  

2. A shift in the market 

Marketing is one of the most prevalent issues confronting the hotel sector. Hoteliers are trying to keep up with the changes in marketing strategies, as well as changes in customer behavior. Traditional marketing approaches do not fetch the intended results anymore. For people who have always done things the old-fashioned way, getting the plan right is one of the most difficult tasks in the hospitality sector. 

3. Need for personalized experiences

Changes in client expectations are one of the most difficult challenges in the hotel sector. Today’s hotel visitors expect a lot more when it comes to amenities. Whether it’s free Wi-Fi, an entertainment system, a one-of-a-kind stay experience, or quick check-in and check-out services. 

People have recently begun to demand contactless hotel services to ensure a safe stay and remove their need for hotel workers. Certainly, meeting these needs will be challenging due to limited resources or capital bandwidth, but it will be necessary. 

With decade-old systems, older businesses are now struggling to keep up with the demands of consumers. Understanding consumer expectations and providing them with personalized experiences require dedicated software solutions that most businesses still haven’t adopted.  

4. Reopening business after the pandemic 

COVID-19 made things quite difficult for the hotel industry. Hotels faced canceled bookings, prolonged lockdowns, and closures. This was the worst period for the tourist and hospitality industries. While it is difficult to survive these times, it is even more difficult to emerge from them and rebuild the business.  

However, times like these are also great for making drastic system-wide changes. Older organizations can finally adopt the software tools needed to simplify hotel operations while optimizing running costs. 

5. Rising competition and the expansion of local hospitality hosts 

Properties are an investment. Property owners now rent out their apartments to guests, thanks to platforms like Airbnb. Apart from being convenient, homestays and vacation rentals provide a real local experience. Because of this, travelers choose homestays to hotels and resorts. 

Aside from that, new hotels are joining the market daily. One of the issues in the hotel business in 2022 will be the expanding number of homestays and competition. To keep up with this competition, hotels need to streamline their business operations, learn more about their competitors, and market their USPs effectively.  

6. Lack of data-driven decisions 

Many hotels do not make business decisions based on reliable data. And because of judgments based on assumptions, many hotels are compelled to close in a short period. For example, corporate choices to spend on OTA marketing, interiors, hotel prices, and room kinds are not based on genuine statistical statistics. 

Data-driven decisions require software systems that collect data from every touch point. This includes customer behavior, their feedback during the stay, and more.  

7. Losing loyal customers 

Due to the ongoing influx of appealing offers from various hotels, visitors are not bound to a particular brand. Instead, they are open to alternatives, especially if you don’t connect and engage with them directly and provide a memorable guest experience. 

8. Data security issues 

The issue of security is nothing new. While our data security procedures have improved significantly, so have the risks of data breaches and malware attacks. Hotels frequently keep sensitive data such as guest identities. If hotels have their websites, even more personal information and passwords are also stored.

Hoteliers throughout the world are concerned about digital data theft and private data breaches. Hotels need to ensure that their software solutions are patched properly and do not have any vulnerabilities. It is always better to use a cloud-based solution instead of an on-premises solution to ensure better security.  

9. Rising costs because of inflation 

The cost of everyday necessities needed to run a hotel has drastically increased. While this has touched many businesses, it accounts for a significant share of the concerns and challenges confronting the tourist and hospitality industries. Hotels need to optimize costs without reducing the quality of their service. This requires hotels to streamline operations and make better use of the resources they have.  

With a CRM solution, hotels can drastically reduce the cost of their sales and marketing efforts. It also increases revenue by ensuring that you get more customers.

#10. Lack of automation 

In the hotel sector, several operational areas can be automated easily with software. Marketing, reservations management, guest service, and front-office operations are some of the areas.

Moreover, maintaining cleanliness in hotel rooms and grounds by collecting feedback from guests, and staying in touch with customers are some other areas that can be partially automated. However, hotel departments frequently fail to complete all jobs promptly because of a lack of proper software solutions, resulting in confusion and client displeasure. 

What is a Hospitality CRM?

A Hospitality CRM helps manage client contacts at all stages of the customer lifecycle. In the hotel industry, CRM software may handle messages to encourage repeat visits, pre-visit booking questions, booking reminders, pre-ordering, and post-visit follow-up communications. A memorable guest experience begins before your guests enter the building and should last long after the bill has been paid.

Here are some key benefits of using a CRM solution.  

1. Increases customer loyalty 

You may use your Hospitality CRM software to send regular communication to your clients, engage them in your loyalty programs, provide discounts for subsequent visits, and promote new seasonal menus – all of which will entice them to return.  

You may also personalize these messages to your visitors’ particular requirements with marketing automation on a CRM platform. A CRM collects data from multiple sources to generate a unified customer view. This data can allow you to do things like market your new meat-free menu items to vegetarian customers, or your kids eat free offer to families during half term. 

2. Improve customer service 

Customer service is crucial to providing a positive experience, and the best approach to guarantee you are always providing the finest service possible is to solicit feedback from your customers. 

One of the most crucial functions of any hotel CRM software is to collect post-visit feedback. Not only do positive ratings persuade other potential consumers to pick your location, but you can also utilize this feedback to learn how to enhance your service. 

3. Effortless workflows 

With all your customer data in one location, your teams will be able to manage customer relationships more quickly, reply to social postings and reviews, and send personalized emails to promote visits. 

With a customer relationship management solution that integrates with all your software, your employees can use client data more efficiently and improve income for your business. 

Automating workflows on LeadSquared helped me rebuild my sales funnel and take important steps towards digitizing our operations. Last year, we hit numbers we didn’t think were possible and LeadSquared has certainly played a critical role in achieving them. We now have a shortage of rooms and halls, but it’s certainly a good problem to have!

Vir Bhan Saini, Marketing Director, GCC Hotels 

4. Improved marketing campaigns 

The biggest challenge in any business is sales, and the cost of acquisition is an inextricable part of it. As compared to other industries, the cost of acquisition is much higher for the hospitality industry, which slows down sales.

Dr. Joseph Britto, Co-founder and Director, Acron

Automated and intelligent marketing strategies can help you tackle the challenge of decreasing customer acquisition costs. You may also leverage data from guests’ buying behaviors to create interest-based marketing initiatives. Proper lead capture systems are essential for creating effective marketing efforts.  

For more insight, you can combine data segmentation with a study of booking orders at a certain time based on dates, seasons, or other factors. The algorithm will propose the ideal pricing that will attract the greatest number of guests. Your marketing efforts may be readily classified so that you can tailor your messaging to the proper target. 

Automation allows you to focus your messaging at the appropriate moment, such as delivering birthday greetings. With more detailed information, you can customize your communications and provide messages that are relevant to your visitors’ interests and beliefs. 

You may also measure clicks and email openings to determine the efficacy of your marketing initiatives, learn what works and what doesn’t, and alter your campaigns to boost conversions. 

5. Predict demand 

Improving the accuracy of demand forecasting, both for room services and non-room services is one strategy for increasing resort or hotel revenue. Your profit, however, should be accompanied by an analysis of visitor segmentation and profitability, not just the reported figure. 

A Hospitality CRM system enables you to estimate sales by utilizing historical and projected real-time data. Consequently, during peak season, you may examine and change your inventory to increase revenue by increasing the fee per room and customer. 

6. Automate outreach efforts 

A Hospitality CRM can help you stay in touch with potential customers. It allows marketing teams to better understand your leads and provide them with personalized offers. Essentially, it helps you filter out junk leads and focus on those who are more likely to be your customers.  

Hospitality CRM System assists hotels by automating communication with guests and thereby increasing customer satisfaction. The system can email them a reminder about their reservation date. As a result, they know that the hotel where they are about to stay is prepared to greet them. You may also send automatic thank-you emails to customers once they check out. Or you can send them emails about discounts or promotions at your hotel. 

7. Get an edge over the competition 

Your rivals are also communicating with their consumers and increasing revenue through customer relationship management, and you cannot afford to fall behind. Every day, the average person is bombarded with hundreds of advertising texts. So, using data to tailor, optimize timing, and leverage the correct channels is the greatest way to ensure your communications resonate with and engage your audience.  

A Hospitality CRM can set you apart by enabling end-to-end guest management and providing visibility into the guest’s journey while booking. It also helps that most hospitality CRMs, such as LeadSquared, even automate reports to enable your teams to make smart decisions faster and boost the inquiry to booking conversions.  

LeadSquared just took all the headache out of the lead management process. It saves 40% of my time which would otherwise be wasted on the same. My teams are able to respond to every query on time.

Ashish Jatia, Director, Rhythm Hospitality

Now that you know the benefits of a Hospitality CRM, you might be wondering about the time it may take your team to implement one, learn how to use it, and if it is financially feasible for your business. But, we’ve got you!  

How to implement a Hospitality CRM? 

With minor tweaks, almost any hotel can implement a CRM solution, be it a small homestay business or a large chain of hotels. Here are a few things to keep in mind when you are getting a CRM solution. 

1. Optimizing workflows for automation  

To get started with implementing a Hospitality CRM, you must make some changes to your workflow. It also means a shift in the philosophy of your operational procedures. Here are a few points that you need to consider. 

  • A customer-centric workflow: Although their worth is not shown in the balance sheets, your clients are the most significant commercial assets for your hotels. Working with a CRM at your hotel implies putting your money into having a direct interaction with your end clients, the guests. This is more than just the incorporation of a technology instrument. It entails altering the way you conduct your job intending to develop customer-centric business models. Traditional management concentrates on products and services; but, if a CRM is not used, it may misdirect its efforts toward the true goal: the guest. 
  • Well-defined goals: SMART goals establish priorities for each team, make corporate outcomes measurable, and act as a direction for company progress. The term SMART was created to allude to the five key traits that each target must have to be considered intelligent. To make it apparent, we list them and associate them with an example: 
    • Specific: Increase the number of loyalty program records by 10%. 
    • Measurable:10% is a measurable number. 
    • Attainable: Email marketing efforts are something that can be done easily. 
    • Relevant: to prepare for the debut of the program’s new benefits. 
    • Timely: Within the next 60 days. 
  • Data storage and utilization: The guest data can help you in taking crucial business decisions. However, such data is often spread across different silos. Before using a CRM platform, you should assess these silos in terms of quantity and quality, with the latter always taking precedence. Once the intriguing systems and databases are identified, a more technological approach is required to investigate the integration of that information with the hotel’s CRM system, moving from silos to a single warehouse. As a result of having all of your data in one place, you can apply enhanced context and segmentation to all of your client records. 

2. Choosing the right tool  

There is no perfect Hospitality CRM solution that works for every business. Your hotel may have its unique requirements that depends on the size of your business and how it will scale over time. Here is an example of what you need to look for in a Hospitality CRM. 

For hotels with around 20 rooms or less, you need database segmentation, customer engagement monitoring, and analytics for performance monitoring.  

For larger hotels with up to a hundred rooms, you need all the features mentioned above, plus features for automated marketing campaigns, a reward system or a loyalty program, and easy online check-in, and check-out features.  

For hotels with over a hundred rooms, you need additional features like chat API integration, staff management, automated workflow management for hotel operations, identifying priority customers, and more.  

For groups of hotels, it is important to have a loyalty program across all the hotels. Your CRM should also have a shared ledger and a centralized database for your hotel chain.  

Hotel businesses that have an upselling strategy in place should have the tools to make upselling simpler. This includes tools to track purchase patterns, identify upsell opportunities and set up upselling tasks.  

3. Features checklist for a Hospitality CRM 

All hospitality CRMs should have some core features. You should never skip out on these basic features! 

  1. Omnichannel lead capture: Your CRM should be able to capture leads from hotel and resort marketplaces online, from online advertisements, social media, television ads, or even print ads. The CRM should capture all potential clients’ activity – whether they browse hotel alternatives, purchase a stay, send, or receive an email or SMS, or communicate via any other channel. 
Omnichannel lead capture
  1. Track conversations with customers and prospects: Every phone call, whether incoming or outgoing, should be documented in your Hospitality CRM. A fresh lead is produced when a new booking inquiry is received. In the case of existing clients, records are immediately updated to reflect new phone interactions. It should also be compatible with SuperReceptionist, CallRail, CallTrackingMetrics, and other call-tracking applications. 
  1. Automate and simplify booking workflows: When a new lead is allocated to your booking agents or a new booking inquiry is generated for their property, your Hospitality CRM should automate SMS and email communication with them. It should reduce response time and allow your agents to book more suites more quickly. 
Automate and simplify booking workflows
  1. Keep track of inventory and room occupancy: Hospitality CRMs collaborate with, and sometimes even include capabilities from operations management (OM) and property management systems (PMS). This includes everything from high-level functions like reputation management to low-level aspects like room service, housekeeping, and supply management. Everything produces data, which a CRM consolidates and analyses. 
  1. Invoice and quotation automation: CRMs now provide basic accounting tools that every hotel business may use, especially when dealing with bigger corporate contracts or vendors. There are tools available for creating quotations with your hotel’s specific branding, then automating those quotes to invoices and receiving notifications when they’re due or paid. 
  1. Organize your inquiries: To answer inquiries, both big hotel brands and independent hotel owners must have the most extensive communication channels available. CRM solutions integrate phone, email, SMS, live chat, and social media accounts into an omnichannel dashboard, allowing fewer representatives to handle incoming client interactions 24/7, even via a mobile app
  1. Marketing via outreach and engagement: CRM simplifies the creation of email campaigns. It allows you to design and schedule social media marketing. It uses marketing automation to provide targeted messages to segmented audiences and populates the guest data of anybody who clicks on your advertising or messages. This provides the required information for the sales process to get additional reservations. 

In Conclusion

Managing your hotel business can be made simpler with LeadSquared’s Hospitality CRM. It comes with a complete marketing solution, sales and reservations management, and a performance dashboard to see how your business is doing. With better workflow management tools, your employees can also work more efficiently, whether it comes to nurturing leads or making a sale. 

If you’re looking for an effective Hospitality CRM to turn your business around and accelerate your room bookings, you should give LeadSquared a shot today! Get in touch with our team to get started.  

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