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Self-service apps boost Hyatt's bottom line

published on February 24, 2003
on / Datamation

Slow economic growth has competitors fiercely snapping at fewer and less lucrative business opportunities. Nowhere is this truer, perhaps, than in hospitality, an industry hard hit by restrained corporate spending for the last two years.

To give itself a competitive edge, Chicago-based Hyatt Corp. has turned to e-commerce in order to trim costs while providing better service to business customers on smaller margin sales.

An investment of more than $500,000 has given Hyatt the ability to offer self-service applications for corporate meeting planners over the Web -- leading to big payoffs for the global hospitality chain. enables professional meeting planner and novices to book meeting space for fewer than 100 people in real-time at any Hyatt hotel. The move demonstrates that Web technology can still bring value to a company's bottom line. Pitching potentially unpopular e-commerce projects to an executive board needn't be an arduous process, either.

A Big Small-Meeting Challenge

Smaller meetings, which represent almost 70% of Hyatt's meeting business, cost more to sell than larger ones. The small meetings tend to fall through more frequently than those with a proven, trackable history, said Fred Shea, vice president of sales operations for 122 of Hyatt's deluxe hotels and resorts throughout the United States, Canada, and the Caribbean.

Meeting planners tend to book small meetings on a shorter time frame, adding to the challenge of selling space. Whereas larger meetings are booked anywhere from six months to five years out, it's not unusual for business customers to request space for smaller meetings just a week in advance of the desired date.

The pressure to secure space makes corporate meeting planners jump at the first hotel that can meet their needs. So hotels can ill afford to miss a call or send customers to voicemail response systems.

As corporate meeting planners grow more cost conscious, rate savvy, and time crunched, selling to them has become more difficult, said Shea.

"The smaller revenue is harder to get to," said Shea. "We needed to provide a better way to service them."

Hyatt, like many companies, also needed a way to control costs.

"One way to do that is through self service," said Gartner research director White Andrews. "If you're selling a service and you can provide a better experience to users through a self-service environment, particularly in selecting and booking a room. You might be able to do that better online than in a typical call center."

Selling the Project

Understanding the potential financial drain of unsold rooms and the ability to save on sales overhead, Shea and Robert Bansfield, Hyatt's assistant vice president of management information systems, sold Hyatt's executive team on the idea of funding During its annual IT planning process, Bansfield outlined the project scope, one-time and incremental expenses, timeline, and to a lesser degree, its ROI to Hyatt's steering committee. v

Comfortable with the fact that the project would give Hyatt a competitive advantage -- no other hotel at present can do real-time meeting reservations -- the committee approved the project.

Hyatt started design and development in mid-2001 and rolled out the project in December 2001. A six-person team from Computer Sciences Corp. built the application, which tied into Hyatt's existing proprietary reservation system, Reserve, and its sales tool, Envision.

The application leverages an Informix database and runs on IBM RS6000 servers. Hyatt already had a centralized database in place, said Bansfield, which helped to further minimize the costs and development time.

Impressive Results

Since its advertised launch in February 2002, the project has an impressive track record. In its first six months, the site logged 150 bookings amounting to more than $1 million of held inventory, said Shea. On its one-year anniversary, the site has more than 1,300 registered users, representing some 1,500 organizations. The site averages more than 400 availability searches per month -- searches that can be done 24 hours a day -- something the sales staff can't offer.

If continued e-commerce development Hyatt is any sign that is a proven success, then all signs are positive.

Hyatt recently teamed with StarCite to deliver real-time group meeting rate availability via StarCite's Online Marketplace. The site offers meeting planners an automated method of submitting RFPs for meeting space. Hyatt now is the only hotel able to offer quotes in one minute. Considering the first company to respond to RFPs can sometimes get the business, technology may put Hyatt far ahead of the pack.

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