TIP SHEETSEPTEMBER 2018

Tips for Selecting an Ancillary Management System How to Improve Customer Loyalty through Ancillaries

Leaders in the travel, tourism and hospitality industry know the key to success is not only

driving ancillary revenue but also developing long-lasting relationship with their guests. But

while ancillary services are crucial to increase the value per stay of a customer and maximizing

the lifetime value of customers, many travelers do not see them as a significant differentiator

between properties. In this rapidly-evolving economy, there is no better way to instill a sense of

customer value than solving a pain through a memorable brand experience with personalized

experiences and convenience.

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Executive Summary

The travel, tourism and hospitality industry understand they must rely on ancillary services as

a core component of their revenue and loyalty strategy and use these as an opportunity to

differentiate. In a harsh reality though, only 3% of consumers rate amenities as a leading factor

in booking.

Even though guests can be considered a “captive audience” after a booking, companies are

failing to capitalize on solving a critical problem through high-quality and right-timed ancillary

services. With so many options for a traveler, hotels are finding it necessary to pile on the

complimentary perks, Wi-Fi for example, in the hopes of attracting customers. While some

travelers delight in room service, chances are there are better options at more reasonable

prices within walking distance or through a food delivery service. Travelers around the world

are still searching for authenticity, personalization and convenience.

iSeatz has established these best practices to travel, tourism and hospitality industry leaders

optimize their ancillary management services.

In a recent 2018 iSeatz sponsored customer survey, 27% of traveler respondents would purchase a package from a hotel.

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#1 Combat Competition with Loyalty

Successful businesses dedicate their time not only to figuring out how to attract new customers

but also to retaining the ones they already have. Harvard Business Review reports have shown that

gaining a new customer is actually five to 25 times more expensive than keeping an existing one,

which means that efforts are often better spent nurturing current relationships (1). In a separate

study by Frederick Reichheld of Bain & Company, a 5 percent improving in customer retention rates

has shown the potential to increase profits up to 95 percent.2

The bottom line: keeping the right customers is valuable. Loyalty programs are one of the best ways

to make sure that you are rewarding your customers and keeping them interested in your brand

and products.

1. https://hbr.org/2014/10/the-value-of-keeping-the-right-customers

2. http://www.bain.com/Images/BB_Prescription_cutting_costs.pdf

3. https://www.slideshare.net/capgemini/infographic-45945598

Key Take Away: Be sure your AMS leverages your traveler database and loyalty points engine.

CapGemini reported that 53% of consumers stated that they abandoned at least one loyalty program within the last year.3 The 3 key reasons were:

• 44% - A lack of reward relevance, flexibility and value

• 33% - A lack of a seamless multi-channel experience

• 17% - Customer service issues

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#3 Traveler Experiences are Key

Experiences are the main driver of recreational

travel as travelers search for experiences that

are unique and personalized. This is also a

significant opportunity to unlock ancillary

revenue potential of in-destination services

and enhanced customer experience. Travel,

tourism and hospitality companies can leverage

customer data to suggest personalized expe-

riences, at the right customer touchpoints.

Through technology, operators can profit from

up-selling excursions and experiences to their

guests while also reducing the friction through

better payment processing.

#2 An Exceptional Digital User Experience is the Default

Immediate gratification is becoming the norm and enterprises that invest in technologies that focus

on driving mobile engagement will be a step ahead of the competition. Many companies run into

trouble when users have a bad experience with glitches in a mobile application, when a website is

not fully responsive, or pages do not load quickly. Every second of delay can result in a seven per-

cent reduction in conversions.

The majority of people will book their travel on a mobile device and this is an ideal way to ensure

guests are always aware of what promotions and services make sense for them during their stay.

The more seamless the user experience is the more likely guests will use it.

Key Take Away: Make sure your AMS provides a fully responsive user experience across channels, devices, and screen sizes.

Key Take Away: Enable your AMS provides a rich set of ancillary services tailored to your guests’ entire travel experience.

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#4 Communicate and Connect

Booking confirmations are the norm but capitalizing on this opportunity to connect with the guests is still

lacking. Given that guests are effectively a captive audience once they have booked travel, operators are

missing a prime opportunity to promote destination and property information. Operators have the op-

portunity to change guest perception who are looking for a full personalized experience rather than just

a company they are purchasing from.

33.7% of travelers respondents have

eaten at a hotel property restaurant.

25% of respondents had a drink at a hotel

bar where they were not staying as a guest.

Key Take Away: Ensure your AMS delivers personalized communications with customers to strengthen your loyalty bonds.

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None of this can be successfully achieved

without the integration of your ancillary man-

agement system (AMS), property management

system (PMS), customer relationship man-

agement system (CRM), central reservations

system (CRS), global distribution system (GDS),

as well as supporting fulfillment and customer

care platforms.

Though integrating the systems and data

is easily accomplished, it is harnessing the

power of collective digital intelligence to

proactively engage guests in a personalized

experience, deliver what they want, when

they need it and through the channel they

prefer.

#5 Unlock the Power of Digital Intelligence

Truly accelerating the potential of ancillary services revenue requires integration of multiple operator

systems, capturing data by tracking user actions, by demographics, web behavior, purchase and billing

data, across every device and channel. This is an immediate data effect that allows operators to under-

stand what drives the booking of a hotel room, a particular first- or third-party ancillary amenity, as well

as guest preferences. Having all this data at your fingertips ensures that you can guide the guest through

the journey that he or she may find most attractive.

Key Take Away: Ensure your AMS integrates across data silos to build a deeper psychological link to long-term intrinsic happiness.

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In the end, it is about loyalty

Finally, it truly is about guest loyalty. If

personalized options are served to guests,

they will feel in control and invariably want

to continue a long-term relationship with

the operator. Some will want to navigate and

choose on their own terms and never want

to speak to an employee while others will

want a white glove experience. Regardless

of the type of guest you are catering to, you

must ensure that you have technology, tools

and processes in place to deliver the level

of amenity that the guest chooses in a high

touch, no-touch or a manner in between.

The key to growing ancillary revenue is to

offer what your guests may not even know

they need or want, at the right time, and in a

personalized manner.

TIP SHEETTips for Selecting an Ancillary Management SystemHow to Improve Customer Loyalty through Ancillaries

Sean DuclauxVP of Product and Product Marketing

Sean Duclaux is the Vice President of Product Management and Marketing for iSeatz and leads the product and digital experience strategies for the most pow-erful cloud-based, global digital travel commerce platform in the market today. In addition to an MBA from University of Houston and M.S. in Computer Science from University of New Orleans, Sean has over 20 years in enterprise software and cloud technologies with over 13 years in the travel and hospitality industry.

Founded in 1999 and based in New Orleans, iSeatz is a leading travel commerce and ancillary merchandising technology

company for travel, financial services and entertainment brands. The iSeatz team of designers, developers, artists,

engineers, inventors, analysts and project managers are the backbone of our proven reliability and uncontested vision.

www.iseatz.com

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