Feasibility study of application and implementation of customer relationship management (CRM) in hotel industry

The purpose of this thesis is feasibility study of Customer Relationship Management (CRM) application in hotel industry.

With increased globalization, competition, higher customer turnover, growing customer acquisition costs and rising customer expectations in today competitive word CRM is very important for several companies and received an increasing amount of interest among scholars and practitioner especially in recent years. While some companies have received immense benefits from their investments (enhancing customer satisfaction and profitability).

The researcher tried to find that is CRM in the form of giving special services with the help of IT, one-to one marketing, effective relationship on guest retention and knowing guest needs and meet this needs via giving more and more special services; could be a life savor for hotel industry?

The results of determining effects of implementation of customer relationship management (CRM) on guest satisfaction, loyalty and retention showed that this implementation in the form of gathering information for personalization of services, using one to one marketing plans, improving guest services and support and using IT for giving more services in hotels will increase guest satisfaction, loyalty, and retention. Guest satisfaction will cause guest loyalty and retention .guest retention is really important and good for both hotels and customers. for hotels; since guest stay longer, buy more and more frequently it cause increase wallet share also it is cheaper to keep existing customers happy rather than to attract new ones. Dyche stated that five-percent increase in customer retention results in a 25 to 95 percent increase in profits. On the other side for a guest loyalty to one hotel’s brand reduces the risk of service variability, allows for the development of a social rapport with the provider, and the customization of services to his/her specification.

In all, in hotel industry CRM application with more satisfied and loyal guest bring a lot of benefits such as increase in the rate of retention, increase revenue and profitility, reduce internal costs, reduce marketing costs, improving customer services, create positive word of mouth, market share growth, improve marketing methods ,streamlined business process ,better understanding/addressing customer requirements, higher employee productivity and protect marketing investment with maximize returns. All these benefits for a hotel can be a source of long-term and sustainable competitive advantage.

Author: Rahimi, Roya

Source: Luleå University of Technology

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