The features include existing advantages and possible restrictions. Highlights on the most important type of knowledge about customers and the most useful approach to collect the knowledge conclude this piece of work. In this piece of work, the aim is to present an overview of customer knowledge collection of the hotel ind ustry in China and to understand the developing trend. 2. Identification of important types of knowledge about customers In order to build a comprehensive understanding of customers and improve the market performance, the hotel ndustry in China is expected to identify essential types of knowledge about customers.
This chapter describes these types of knowledge in terms of customer segmentations, and explains the importance of respective type. 2. 1 Identification of important types of knowledge about customers 2. 1. 1 Business travelers Business travelers constitute a large amount of hotel customers in China, especially economical hotel customers (33. 2%) (Han 2011). In general, hotels located near a corporation tend to negotiate a contract with the company and offer a favorable rate in exchange for the potentially large number of room ights (D’Antonio 2013). Four types of knowledge about customers are important regarding this segmentation.
Customer personal information includes gender, age, education, nationality and other demographic characteristics. Customer previous experience on hotels is based on customer previous stay in other hotels and reflects customer current understanding of hotel conditions. Customer occupational background indicates professional information of customers such as the industry, organization, department and position. Customer perceived value, covering customer satisfaction, is generated after visiting a certain hotel and reflects ustomers’ impression on this hotel’s overall conditions. . 1. 2 Meeting pa rtici pants Association meetings and professional groups bring high revenue for the hotel industry and indicate high profitability. (Lee & Back 2008) This market contains meetings, association conferences, seminars, exhibitions and similar gathering of ten or more people. The core customers are meeting participants including associations, corporate groups and other social groups (D’Antonio 2013). Apart from the four types of knowledge mentioned in previous segmentation, meeting-related customer information is also influential in this part.
This type of knowledge covers both meeting arrangement (such as duration and social activities) and relevant issues involved in the same period (such as airline information). 2. 1. 3 Leisure travelers For group travelers, their consumption purpose resides in accommodation and recreational facilities. Except collecting customer personal information, previous experience, hotels need to collect customer perceived value such as their feedback on entertainment facilities. For self-tour travelers, they target on short stay.
Key factors for these customers to evaluate a hotel include the hotel’s traffic convenience and price. Besides, these customers are likely to share experience with other potential customers (Debjani S. 2011 So hotels are supposed to focus on self-tour travelers’ personal information, demand on prices and traffic, and customer perceived value. In addition to collecting direct knowledge of consumers, hotels also need to collect knowledge from indirect Customer – travel agencies. Hotels need to collect the product information, the main source of customers and seasonal tourist information. . 1. 4 Local customers Local customers here refer to local residents who spend a short holiday at local hotels. Local customers chose hotels based on entertainment facilities, such as shopping malls and clubs. (Richardson E. C. 2000) Knowledge about these customers focuses on personal information such as income and occupation, and records of customers’ previous consumption including the shopping records in the hotel’s shopping mall. 2. 1. 5 Extended stay customers Extended stay customers are those who have a prolonged stay over five days to two weeks.
These customers mainly extend their stay because of commercial projects including medical research projects, insurance claims, corporate development and other large-scale projects (D’Antonio S. 013). This type of customers expects comfortable home-like environment. Therefore, hotels are required to focus on gathering customer perceived value to understand customer expectation. 2. 2 Explanation of the significance of each type of knowledge about customers Reasons which explain the importance of selected types of knowledge about customers are illustrated in this part.
Each type of knowledge improves organizational performance and adds value to organizations to some extent. 22. 1 Customer personal information Customer personal information affects customer perception on hotels and decides their choice when revisiting hotels. For example, majority of business travelers in China is male and more than 60% ages from 19 to 39 having a high educational experience (Han 2011). These customers focus more on the environment than on the price. For meeting participants, foreigners perform more sensitive to accommodations’ condition and price than domestic participants (Wang 2011).
Personal information indicates preference and common criteria of hotel customers. Analyzing these underlying facts help hotels to launch customized room and service, and adapt relevant marketing strategy. Hotels collect this type of knowledge for conducting better erformance to attract corresponding customer groups. 2. 2. 2 Customer prevlous expenence Customer previous experience has particulate relevance to the hotel industry (Titz 2007) and indicates customer current knowledge on the general hotel environment.
Hotels make emotional connections with their clients by manipulating the physical and social environments (Andrew et al. 2011 Moreover, this type of knowledge includes records of customer previous consumption. Hotels can improve recreational facilities and consider whether to invest and expand extra entertainment through analyzing these records. To distinguish a hotel from its competitors and create loyal consumers, the hotel needs an access to customer previous experience. 2. 2. 3 Customer occupational background Customer occupational background reflects a hotel’s customer source and primary requirement of customers.
This type of knowledge influences booked room nights and pre-negotiated price range which business travelers’ organizations have dealt with hotels (D’Antonio 2013). Customer career background directly relates to organization-to-organization relationship between hotels and customer corporations. 2. 2. 4 Customer perceived value Customer perceived value allows hotels to discover strengths and weaknesses of their products and services. This knowledge about customers indicates customer expectation and the hotel’s capability to meet customer needs.
In order to generate higher profit and better market position, hotels need to quickly understand and meet customers’ desire. Hotels may create diversity among competitions, build customer satisfaction and ensure customer loyalty (Curakovit et al. 2013). Figure 2. 1 The Action of Customer Satisfaction 2. 2. 5 Meeting-related customer information This type of knowledge provides hotels with detailed information of meeting roups and helps hotels to achieve high profitability from meetings (Tian & Wu 2010).
By obtaining this type of knowledge about clients, hotels get an access to the meeting process and equip their staff with relevant meeting knowledge so that they can offer better service to meeting participants. Hotels also undertake the role of multi-service provider in the meetings market. This knowledge allows hotel to Offer one-stop service to meeting participants and stimulate cooperation with other industries which further enhance the revenue of hotels (Liu 201 1). Hotels are supposed to be active in he meetings market and stabilize the amount of customer source by collecting meeting-related information and operating accordingly. . 2. 6 Knowledge about travel agencies Knowledge about travel agencies helps hotel to build a better cooperation with agencies as well as to improve room management. For example, in the peak season, hotels are expected to provide adequate rooms and enhance the speed of room service. This report regards customer perceived value as the most important type of knowledge about customers for the hotel industry in China. It is generated after experiencing the hotel service. Therefore, this type of knowledge directly reflects how customers define their stay and decides whether customers will keep on choosing the same hotel in the future.
Through analyzing customer perceived value, a hotel is likely to improve facilities according to customer demands, furthermore, increase the perceived value, hotels are able to improve customer satisfaction, meet customer needs and achieve customer loyalty leading to increasing profit. (Wen & Pan 201 2) 3. Identification of useful approaches to collect knowledge about customers The approaches Of collecting knowledge about customer an be divided into two parts”Internet-based approaches and offline approaches, both of which are prevalent in hotel industry in China currently. . 1 Internet-based approaches As their flexibility and diverse functionality, Internet-based approaches are main methods. New Internet-based approaches are frequently rising, while this report will only illustrate three of them that hotels in China have obtained benefits after practice. 3. 1. 1 Web portals The Web portal of hotels is a multi-functional tool which can advertise for hotels, expand market as well as reduce the cost of hotels’ management, ransaction and service. The most important function of Web portal is to collect knowledge about customers.
Hotels use Web mining technology to analyze customers’ information of registration, browsing history, booking details and payment. The main practices of Web mining are Statistic Analysis, Knowledge Discovery as well as Prediction Model. For example, hotels can use Deviation Model which belongs to Knowledge Discovery to analyze the highest and lowest record of customer consumption, and then summarize current consuming trend to develop business strategies. Hotels can build a odel by analyzing underlying connections of consumer behavior to predict revenue and consumption choice of customers in the next season.
Figure 3. 1 Electric Business Model Built on Web 3. 1. 2 Data mining Hotels not only need to collect explicit knowledge about customers such as customer personal information and occupational background, but also need to collect in-deep knowledge about customers which can be explored by Data Mining technology. Data Mining can analyze the connection between complex data to elicit useful knowledge for hotels. This report will give two models of using this technology. One is that hotels ollect and organize raw data recorded in marketing reports, and then build data warehouse system.
Customer information will be categorized according to the latest record, frequency and amount of consumption. By this way, hotels are able to identify common features of different types of customer, in order to customize business strategies to attract more potential customers. The other is that hotels can conjecture knowledge about potential customers such as preference and needs of different types of customers by analyzing information about loyal customers, which is a cost effective method to collect knowledge. Figure 3. is the general data mining process. Figure 3. 2 The Process of Data-mining 3. . 3 Review websites Recently, the development of review websites has received widespread attention. These websites enable users to find various types of information reviewed by other users about hotels such as service and average cost. Moreover, customers of hotels can give their comments or complaints after they leave hotels on these websites. For example, there is a Chinese review website called “dianping. com”, users who plan to book a hotel can refer to information not only about the hotel’s basic information such as room price nd location, but also comments of former customers.
Hotels often purchase data about both themselves and their competitors from review websites. It is beneficial for them to collect knowledge including perceived value, personal information and maybe previous experience of customer. Comments of previous customers about a hotel and its competitors reflect what a hotel needs to improve and what they can learn from others respectively. This approach is so important that some fancy hotels even hire people to collect, record and analyze both of their own hotels and their competitors to achieve competitive advantages. 2 Offline Approaches Comparing with Internet-based approaches, offline approaches have more limitations while are more effective. “Non-IT tools (face-to-face meetings and phone conversation) are used and considered more effective than IT tools for knowledge acquisition” (A1-Busaidi, 2012). This report gives three of offline approaches that practicability and effectiveness have been proved in reality. 3. 2. 1 Hotel open-day As a currently prevalent approach to collect customer knowledge in China, hotel open-day is to select and invite customers to experience hotel services for one or several days for free.
Customers need to write comments or fill questionnaires about the hotel before they leave. Hotels often collaborate with other industries such as shopping malls to co-conduct activities like lucky draw to select customers. Invitation is based on analysis of history deal records, aiming to develop customer loyalty. This approach allows hotels to explore all types of customer knowledge mentioned before, which enables hotels to know requirements about service and facility of respective type of clients. Open-day is conductive for hotels to develop local business.
There are some hidden issues of open-day as well. One is that open-day is merely applicable for local customers. Besides, although random customer selections like lucky draw is beneficial for a hotel to raise its profile, the knowledge of these customers are only one-sided views based on various stratums and may be not valuable for hotels. 3. 2. 2 Events “Information conveyed face-to-face and phone-based is the richest kind of transmission, compared to information delivered through written documents or information technologies” (A1-Busaidi, 2012).
Events such as holding seminars and trade fairs allow hotels to get knowledge effectively from usiness customers by face-to-face communication and cooperation. The collaboration between hotels and clients ranging from a series of meetings enables hotels to approach both meeting-related customer information and customer previous experience on hotels. Knowledge can be explored from “enterprise-led customer knowledge development dialogues”probing collaborative, and purposeful explorations of customers” (Lesser, 2000).
Moreover, hotels call for customer perceived value to obtain more suggestions to maintain customer relationship, since “retention is cheaper than acquisition” (Gibbert, Leibold, & Probst, 2002). This approach is onductive for fancy hotels, but is not applicable to all on account of geographical location”most events are held in hub cities such as Beijing and Shanghai. Therefore, the value of collecting this kind of knowledge is nullified for fancy hotels located in relatively developing cities. 3. 2. Complaints acquisition through call centers A1-Busaidi’s research indicates that the call center is the most effective tool for customer knowledge acquisition, namely, customer perceived value. The call center facilitates organizations to collect customer enquiries, suggestions and complaints and to respond to them (A1-Busaidi 2012). Complaints are a key contributor to operational improvement but also to the organization’s long term success by incorporating information from complaints into strategic planning systems (Hart, Heskett & Sausser 1 990; Michel, Bowen & Johnston 2009).
While call centers can be human resources consuming and consequently costly (A1-Busaidi, 201 2), it would be better to integrate these with information technology. With the comparison between Internet-based and offline approaches of collecting customer knowledge, offline approaches have reflected obvious limitations and is possible to be replaced by Internet- ased ones following trends in the hotel industry in China. Among Internet- based ones, this report takes data mining as the most effective one for customizing various models to fit diverse requirements of organizations. . Conclusion Given by the assumption of the hotel industry in China, this report divides hotel customers into five kinds in order to explore customer knowledge”business travelers, meeting participants, leisure travelers, local customers and extended stay customers. Then six vital types of customer knowledge have been analyzed”customer personal information, customer revious experience on hotels, customer occupational background, customer perceived value, meeting related customer knowledge and travel agents knowledge.
During the process of explaining the significance about each type of customer knowledge, the customer perceived value is regarded as the most important type of knowledge, since it is the most efficient and direct means for hotels to learn about themselves and improve customer satisfaction (Mjahed & Triki, 2012). Aiming to collect knowledge about customers to flourish the competency of hotels, this report illustrates three
Internet-based approaches (Web portal, data mining and review websites) and three offline approaches (hotel open-day, events and complaints acquisition through call centers) respectively, which are all prevalent currently in the hotel industry in China. Comparing with these approaches, this report make a conclusion that data mining is the most useful approach to collect customer knowledge, as it is able to simulate both current and potential circumstances by building models and then customize various strategies for diverse hotels. This report provides an overview of the collection of customer knowledge in the hotel industry in China.
For future direction, this report may research economical hotels in China to make it more comprehensive because most approaches contained in this report are applicable for fancy hotels.