July 24, 2018

Coffee Chat: APEX Hotels & HEBS Digital

HEBS Digital’s Executive Vice President Jason Price chatted with APEX Hotels’ Digital Manager Steven Howe, based in the UK, to discuss Steven’s career, GDPR, and the latest from APEX Hotels.

 

Jason: What do you do and what was the path that led you not only into the hospitality industry but the career you have now?

Steven: My current role is Digital Manager at APEX Hotels, and I pretty much have IT-related meetings and calls all day. What that encompasses day-to-day is looking after the website—not just the front-end consumer website, but also a number of other websites that we have in effect. And then, there is the digital marketing side, which is mainly me managing an agency that executes the marketing.

What led me here? Well, I loved video games, computers and technology in general as a kid. When I got to University I wasn’t really sure what I wanted to do, but I knew that I wanted to do something where I could still enjoy myself, and, my job now is just that. When I got to school I tried to balance University and the social aspects of University, and by the time I got to my third year, I realized that website development was something I was really interested in.

At that point, a friend of mine was starting a website development company. He focused more on the design and I focused more on the tech, and that’s how we worked, building websites for small businesses in Scotland. That was 10 years ago and a lot has changed since then.

Between then and now, I moved to be the Technology Manager of a family-run fancy dress business. We took them from a brick and mortar store and built them an entire online distribution channel based on marketplaces like eBay and Amazon. Once we started to see the exponential growth we built a branded dot-com site to start leveraging the relationships we had been building with some of our most loyal customers. As a result of our fast growth, we were one of the first companies—and in Europe, not just the UK—that was able to deliver fancy dress via eBay and Amazon, cross-border at a cost, quality, and speed that was outperforming even local suppliers. We ended up turning it from a £50,000 a year single property business into an online-only £5 million a year business. That’s still quite small, but it’s a massive growth in three years. We had to move into a bigger warehouse each year. It was a really exciting time.

Along the way, I began to recognize I had to learn a lot more than just development. I had to learn about advertising, translations, SEO, et cetera, and that’s when I realized, “You know, I’d like to stay away from the development and work on the marketing!” It was much more exciting, it’s closer to the customer, more creative and you can really feel connected to the results!

Finally, the next progression was to APEX Hotels. I had no hospitality experience, but it was the same idea there. It was a family run business so a very similar model, though much bigger in scale than what it had been before, and I could bring the same knowledge to this job that I had acquired from the development, marketing, and entrepreneurial skills I’d been cultivating. So, as I continue to work at APEX now, my job has begun to shift from digital marketing to leading some of the strategies within the company with distribution and particularly direct distribution.

 

J: What are some challenges and successes you face in your role?

S: The successes are really seeing increases in direct web business because that’s what everyone is trying to deliver. I think some of the challenges are understanding why that is important. Fundamentally, for the business, it’s a cost-benefit driven decision. It’s also about owning the customer for marketing, but it’s still a business and we are looking for the lowest cost of distribution. That’s why we need to increase direct web. If direct web costed more, there would be little desire in the industry to increase it. It’s something we really have to balance, which is the challenging part. Growing the lowest cost channel without increasing its costs relative to the alternatives.

Another challenge is the technology and tools needed to efficiently do a job. There are a lot of processes in hospitality that are time-consuming, repetitive, relatively simple tasks, and we should be finding better ways to do them more effectively leveraging technology.

Unfortunately, as an industry, we’re not used to buying technology. We’re often more comfortable assigning those types of tasks to people. The kind of technology that exists in other verticals and to some extent is available in hospitality already, really has the potential to significantly impact results, both for the guest and for the staff. There’s definitely a gap in what technology providers are producing focused on hospitality, but separately there’s a lack of strong digital leadership voices in many hospitality companies. Most still rely on agencies to lead their digital transformation.

Then there’s data, which is next in the way of challenges. We already have some data—most of the data we need in fact—we just don’t have the systems and the capacity to easily access and join it at speed. That’s the biggest challenge, really. Much of our success is because we have strong people with great experience and knowledge who get it right, with what I would say is restrictive or limited access to good data. As someone in Senior Management, we always want to see the data but we don’t always have a way to get at it quickly. We are starting to try to get new technology that puts all of the data into one place. For example, we have all of this revenue data, and that’s great, but we also have been spending a large amount of money on marketing and that generates tonnes of data which we have nowhere to put or send. That’s a big challenge and one that we are currently working on as I’m sure are many others. But how many are looking at their staff retention rate, staff recruitment costs, staff happiness and how those correlate with guest satisfaction, loyalty and lifetime value of a guest? Data isn’t about just putting marketing, finance, and revenue together. There’s a whole area of hospitality data that is rarely integrated that can really change how we make decisions and potentially even do business. For a lot of companies that data is sitting in separate silos with no-one leading that integration. But pretty much every company has got that data, that potential. It just isn’t being realised.

 

J: What are some of your wishes for how you’re going to use CRM data, and how do you plan to leverage it down the road with a future customer?

S: Today our CRM is basically just a snapshot of what our PMS has in it. We have a guest name, and we have ways to get a reasonable understanding of their history with us, so there’s a decent amount of information in there.

Our challenge now is that we are able to profile the customers we have, but looking at our CRM we don’t know why they came or what they liked when they were with us, what they engaged with. This really limits what decisions we can make around marketing campaigns and the kind of content we prioritise for those guests. Again, we can rely on experience and some smart people on our teams, but it would be so much more effective if our CRM had that level of data available.

The closest thing we have to that right now is a post-stay survey, in which guests answer questions about what they liked or disliked about their stay. But our CRM doesn’t hold that data. It’s in another silo. So we’ve got no idea whether or not you’ve had a good stay. We totally do, but that information isn’t connected. What if we want a guest to return and we send an email asking them to come back, but they’ve previously answered a survey saying that the hotel has done badly? We already know that and we’ve still sent them the email because we don’t have the data readily available.

The CRM data, done well, is incredibly important. The problem is the data points don’t connect, so we can’t yet leverage it. And that is, I think, the single biggest opportunity to optimise marketing campaigns and strategies.

 

J: What are your feelings on GDPR? Do you think consumers are going to like it and/or take advantage of it? Ultimately, how do you think it is going to impact the hospitality industry?

S: Well as a person that is relatively left-leaning I would say it’s a great thing for consumers, and I think that marketers need to be positive about it. The best practice, for us, is to capture consumers’ consent correctly in the first instance. We need to be clear what it is they are consenting to, make it a good experience, explain all of the benefits, and then allow them to consent. When we market to those people, it’s exactly what they expect. That to me just seems logical and simple.

The concern, however, is that people have these databases with millions of customers who are “opted in”, but you’re kind of relying on the practice that says, “They’ve stayed with you so you can talk to them however you’d like now.” But, in actuality, that’s a terrible experience for the guest. Of course, you can probably make some money out hitting everyone whoever stayed with you, but it’s also inefficient because you’re marketing to say 1 million people but only five thousand of them are actually reading the email.

You’re highly likely to make more money when you are targeting more people, but it’s not the kind of marketing people engage with and it’s not the experience that the hospitality industry should be delivering. Ultimately, it’s not going to work for you long-term. You’re about the guest, you’re about giving a good experience, so your CRM and contact strategy should mirror that.

As for how it’s going to impact us as a business, well, that’s the challenge. Realistically what is going to happen, which we’ve already seen in our databases, is that it’s going to shrink significantly. But, we expect that when we start sending emails, that the engagement will be better because all those people wanted that email.

Also, we do feel that the revenue impact will not be as significant because email, in the last few years, has continued to decline as a channel, so we’ve invested in other media as a result.

 

J: Generally speaking, what is the percent of loss concerning your customer database once GDPR goes into effect?

S: Well I’ve quickly calculated and we are at about 90% loss. That’s based on a maximum number of people that had not necessarily opted in. That was relying on having stayed with us in the recent past as a legitimate interest.  We chose to go back out to everyone and confirm explicit consent. And that’s our policy going forward. You should only get our marketing emails if you have requested them. We’re choosing not to rely on legitimate interests, which I think a large number of our competitors are still choosing to do, and that’s fine. We’re in the business of delivering a great experience. Sending out emails that 50% won’t even open is not where we want to be and GDPR helped us align our email strategy with what we stand for.

 

J: What does the future of APEX Hold?

S: Our product is very strong. We are investing 12 million pounds into our portfolio this year to refresh our existing hotels and put pressure on our competitors. For instance, our Temple Court property in London is expanding. We’re adding twenty new rooms, including four grand suites and a flagship suite. Those are above anything that we already offer across the group but still incredibly competitively priced for the market. We want to really put pressure on our competitors and are really excited about bringing these to market.  We’re also delivering a new wine bar and private dining spaces as part of the same development, and we have additional investments in our Edinburgh and Dundee hotels with room refreshes, C&E and F&B updates, partnerships, and more, which will really keep us out in front. We’re continuing to provide the best quality product for the best value. We are the place to come for outstanding quality, sensible pricing, and experience that’s just going to be a seamless, beautiful trip.

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About HEBS Digital:

Founded in 2001, the firm is headquartered in New York City and has global offices in Las Vegas, Tallinn, Munich, and Auckland. Through its Smart Guest Acquisition Suite, including the smartCMS®, Content Personalization Engine, Smart Data Marketing, and full-service digital consulting and marketing solutions, HEBS Digital helps hoteliers drastically boost direct bookings, lower distribution costs, and increase the lifetime value of guests. Its diverse client portfolio consists of top-tier luxury and boutique hotel chains, independent hotels, resorts and casinos, franchised properties and hotel management companies, convention centers, spas, restaurants, DMO and tourist offices.

Part of NextGuest Technologies, HEBS Digital and Serenata CRM, the most comprehensive Hotel CRM Suite today, are the creators of the hospitality industry’s first Fully-Integrated Guest Engagement & Acquisition Platform.

Contact HEBS Digital’s consultants at 1 (800) 649-5076 (North America), +64 (0) 9 889 8489 (Asia Pacific) or success@hebsdigital.com.

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Editorial Contact:

Garrick Lee
Marketing Manager, HEBS Digital
Phone: (212) 752-9425
Email: garrick@hebsdigital.com