Customer lifetime value, driving direct business, and customer-centric operations are just three areas of focus on the citizenM roster for 2023, according to Bob Engeringh, Commercial Director, citizenM.
citizenM enjoyed a busy 2022, and 2023 looks to be no different. The company has four new hotels slated to open this year, including the 351-room citizenM Miami World Center; the 84-room urban retreat citizenM Paris Opera – the brand’s fifth in Paris, and the 344-room citizenM Austin Downtown.
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With no plans to slow down, the brand is set to continue its focus on digitalization for the benefit of the guest, while revenue teams are concentrating on customer lifetime value and driving direct bookings.
Customer Lifetime Value
Engeringh believes the hotel industry has been too focused on single bookings. For him, the industry should look more at customer lifetime value.
“The industry is way too focused on the cost of one single booking,” Engeringh said. But at citizenM, the emphasis is on customer loyalty.
“Our focus is on net CLV (customer lifetime value) with a focus on driving more direct business. However, not every loyal customer can book via your website due to travel policies, so here it is up to us to make sure we have the best set up for us to further optimize our spend within our total distribution network,” Engeringh remarked.
He believes more hotels should be looking beyond rooms revenue and taking a more holistic view of revenue management.
“The development of net revenue management, not only focusing on the single room booking but taking into consideration any ancillary spend, will be an important trend in 2023 and beyond,” he said.
Automation
Another trend Engeringh sees continuing through 2023 is the continued spend on technology.
“For the next few years, my prediction is that this will continue to increase. Especially now that it is harder than ever for the industry to attract people to work, the focus will be more on automation. If we keep on focusing on this as a means to a better human connection, it is also a good thing,” he said.
Automation is at the center of citizenM’s operations and is also a proponent of being a ‘means to a better human connection’, as Engeringh explained: “For us, automation has always been important. We operate under a very focused, centralized model, where everything that is not related to direct guest interactions is taken out of our hotels. This is essential to be guest-centric. All decisions we make in terms of partners and systems are always focused on the principle of being active 24/7 while our commercial team is operating 18/5 over two time zones.”
Looking ahead, Engeringh stressed that the digitalization of the hotel industry will be best served by a more open tech landscape. For him, it is important for there to be seamless connectivity between solutions, ideally through open APIs.
“If we want to make sure everything is connected seamlessly, more systems need to be able to communicate with each other. As many providers still are very protective of what they make available in terms of API, this is limiting them in the opportunity to link into existing architecture. This in effect will lead to opportunities for other developers that are working on more open connectivity,” he said.
Yielding in 2023
Connectivity and automation will prove vital as citizenM continues to grow and navigate all the challenges the hotel industry will likely continue to face in 2023.
Considering those challenges, Engeringh believes hotels need to focus on where they can have the most impact.
“The biggest challenges are still the macro-economic ones. The war between Russia and Ukraine, the fear of yet another pick up of the pandemic, and the linked price increase due to logistical and resource issues. This all goes beyond challenges that we, as hoteliers, can impact ourselves, when it comes down to performing our business,” he said.
“At a more micro level, I hope that the industry has learned that yielding should only go up and never down. It’s not good for the business and (most importantly) it’s not fair for the customer.”
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