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Industry News - August 20th 2010



Loyalty Programs Helped Restaurants Weather the Economy, Says NRA Survey

Customer loyalty is a key driver of restaurant business, and new National Restaurant Association research finds that more than three-quarters of restaurant operator survey participants say guest loyalty programs helped grow business during the economic downturn. In addition, 90 percent say loyalty programs give them a competitive edge, and the vast majority is planning to invest more in their programs because of their proven ability to drive business growth.

In the first in-depth loyalty study of its members, the National Restaurant Association partnered with Loyalty 360 – The Loyalty Marketer's Association and rDialogue to investigate the level of penetration of loyalty programs in the restaurant industry; identify the types of loyalty practices being utilized; collect the metrics being used to measure performance; and determine the level of dedicated resources supporting strategy, implementation, and management of the programs. 

"Repeat customers are a very important demographic for restaurant operators to grow their business, and loyalty programs can provide strong incentive to increase visits from those individuals," says Hudson Riehle, senior vice president of the research & knowledge group with the National Restaurant Association. "This new research clearly shows the value of operating guest loyalty programs, and offers great insight into loyalty strategies." 

The study revealed that: 
  • Nine out of 10 respondents said loyalty programs give them a competitive advantage (90 percent).
  • Of those that currently operate a guest loyalty program, 84 percent plan to maintain or increase their program investment in 2010.
  • More than four in 10 respondents (41 percent) currently operate a loyalty program, and nearly half (47 percent) are planning to launch one.
  • About three-quarters of respondents (74 percent) use social media to support their loyalty program. Facebook was the most common social networking site used (65 percent), followed by Twitter (40 percent), and blogging (17 percent).
The online survey was conducted in 2010 among National Restaurant Association members, with 1,300 submitting responses.
Seventy-seven percent of respondents said loyalty programs helped drive business during the economic downturn.


Frustrated NYC Best Western GM Gives Manual Channel Mgmt the Axe

The proliferation of online booking channels has been a boon for smaller hotels, giving them the ability to compete against larger properties on an even playing field. But for hoteliers charged with managing those channels, the technological revolution has also meant more time spent in front of computer monitors and less time doing what they do best: providing guests with world-class hospitality. Hotelier Robert Gaeta, general manager of New York City's Best Western Hospitality House hotel, even became so disenchanted with the frustrations of managing the many third-party channels that he wondered whether he could stay in the industry he so loves."I first got in the hotel business because I love working with people," Gaeta says. "Then came a time when computers started being prevalent where I felt that maybe I needed to leave the hotel business because I was spending 90% of my time in front of a computer updating all these different websites—it was an all-day affair. But then I discovered EZYield."

EZYield.com, an automated online distribution management solution for the worldwide hospitality industry, and its web-based distribution platform, has helped to trim several hours off Gaeta's daily channel management routine, freeing him up to interact with guests and staff.

"It's a huge time-saver," he says. "Before EZYield, I'd have to go to each one of these websites and update it separately—log into each one individually, remember the passwords to each one, and then make the changes I just made to a dozen other websites over and over again. Now, with EZYield, I can just load the changes once and apply it across multiple channels with a single click—it's so much more convenient."

One EZYield.com function that is a favorite of Gaeta's is the EZSync tool. EZSync lets users copy yielding information that was previously published to one channel and automatically fill additional channels with the same information, making it easy to maintain rate parity across hundreds of distribution channels. Inventory availability, special promotions and nightly room rates can be adjusted either uniformly or one at a time, allowing for maximum flexibility and dramatically reducing the opportunity for input errors.

Because EZYield.com is a web-based platform, Gaeta can make adjustments to inventory allotment and rates in near real-time at any time. "That's not only a benefit of convenience for me, it's also a customer service issue," Gaeta says. "In the old days before EZYield, if we oversold a night and needed to close the inventory, we had to call up the different channels and tell them to take the inventory down, and there was a delay of up to 48 hours. During that time, other customers might end up booking a room that isn't actually available. Thanks to EZYield, that is no longer an issue."


E-Biz Professionals Reveal Top Tactics for Web Res Conversions

VFM Leonardo, Inc. has just released the results of its first Hotel E-Business Survey which was conducted from March 1, 2010 through April 30, 2010. The key goals of the survey were to identify and analyze what hotel e-business professionals are currently doing and what they plan to do in the next year to enhance the online presence of their hotel, the travel shopper experience and drive online booking conversions. The results were compiled based on responses from 590 companies across the world representing hotel interests and e-business responsibilities. 

The features that many e-business professionals are currently using do not align with those that they believe to be most effective. For example, 64% of respondents believe that "hotel tours (combinations of guided spin, zoom imagery, videos or animation)" are very effective yet only 41% have deployed this tactic.

Highlights from the survey include the most popular planned and deployed features and their effectiveness across two categories: rich media/merchandising and social media.

At a glance, the top five most effective rich media merchandising and social media tactics include:User ratings and rankings: 67%

  • Hotel tours (combinations guided spin, zoom imagery, videos or animation): 66%
  • User comments and reviews: 64%
  • Videos for merchandising, advertising and demonstration: 60%
  • 360 degree spins/panoramas: 49%
This analysis of e-business professionals' merchandising tactics offers valuable insights for online hotel merchandising and validates current online trends. Importantly, the results, across the board indicate that e-business professionals with rich media in their online merchandising strategies are finding great success.

The letter also promised a review of the company's decision-making process for financial contributions in the public policy arena. The company has been known for its support of the LGBT community, including providing domestic partner benefits and support for Twin Cities Pride.



Need Advice? Restaurant Executive Summit Offers Arena for Peer-to-Peer Problem Solving

Restaurant operators seeking advice and insights into the industry's top technologies and commercial real estate opportunities can find the answers to their questions at the 2010 Restaurant Executive Summit, this September 29 – October 1 at The Grand Del Mar Resort in San Diego, Calif, in the form of two interactive workshops.These hands-on workshops give restaurant executives a platform to discuss pressing business topics in a roundtable setting. The two sessions, which are offered concurrently, will allow groups of 25 operators to work through the top-of-mind issues that are most important to them. Operators can choose from one of two workshops:

Technology Initiatives: a hands-on discussion of top priority technologies in the year ahead. Topics include innovation and investment plans, lessons learned from false-starts, and best practices discussions. This workshop will be moderated by:

  • Rohit Verma, Professor, Service Operations Management, Executive Director of the Center for Hospitality Research, School of Hotel Administration, Cornell University
  • Steven Barrow, Vice President of Information Systems, Luby's Inc.

Real Estate Boot Camp: a moderated discussion of trends, challenges and opportunities in commercial real estate. How have the rules of real estate been changed by the recession? What can restaurants do to "buy smart" and capitalize on new investment opportunities? This workshop will be moderated by:

  • Earle Wason, CCIM, Wason Associates, Hospitality Real Estate Brokerage Group
  • Samuel Borgese, President & CEO, CB Holding Corp.
About the Restaurant Executive Summit
Now entering its sixth year, Hospitality Technology's Restaurant Executive Summit presents a full program of solutions-focused educational sessions offering insights from across the restaurant environment, including technology, operations, finance and marketing. Key decision-makers will be able to share strategies and exchange ideas outside of departmental silos, with the collective goal of staying in front of industry trends, preserving financial health, and positioning their companies for growth. Peer-to-peer collaboration and networking with the hospitality industry's leading technology solution providers provide additional value to attendees.

This year's focus is "Priority Initiatives and Growth Opportunities in the New Hospitality Dynamic." Over the past 18 months, a number of societal, technological and economic factors have converged, resulting in a very different landscape for foodservice operations - in effect, a "new hospitality dynamic." Key sessions include:

  • Your Brand is Your Business: Align for Growth in the New Hospitality Dynamic
  • A New Design Model for Business Innovation
  • Technology Super Session: Technology that Drives Top-Line Growth
  • Rebuilding Your Workforce
  • Ubertrends: Socially Engaging the New Era Guest
  • CFO Perspectives: Managing the Cost of Change
  • Impact of National Policy: Unprecedented Change

Restaurants Opt for Cash-Only Policy, but Risk Guest Backlash

Cash is king at local restaurants and bars struggling with a tight economy and small profit margins, writes the New York Post's Selim AlgarTo avoid paying credit-card fees and -- shhh -- maybe fudge income numbers for the tax collector -- some merchants are treating credit cards as if they aren't worth the recycled plastic they're made of. In those places, cold cash is the only way to buy a hot meal. Those in the know say the trend is growing.

"I think there are obvious advantages, both legal and illegal, with the cash-only approach," said Nick Fauchald, editor in chief of the popular foodie Web site Tasting Table.

Veteran restaurant consultant Michael Whiteman said: "It definitely feels like it's more of an accepted practice now. You notice it more and more. When times get tough, restaurateurs look to cut costs."

One Brooklyn cash-only restaurant owner estimated that 5 percent of his gross sales had been going to the card companies.

"The fees the card companies charge hurt the smaller venue," the owner said. "But it's a gamble. You are going to annoy some customers.


Starbucks Defines Vision for Enhancing Customer Experience with In-Store Digital Network

Starbucks further defined its vision for the Starbucks Digital Network, in partnership with Yahoo!, targeted to arrive in U.S. company-operated stores later this fall. First previewed in June, the Starbucks Digital Network will give Starbucks customers free access to a collection of premium digital content accessed through free, one-click Wi-Fi in Starbucks stores. Rodale, Nick Jr. Boost and DonorsChoose.org will join the previously announced content providers iTunes, The New York Times, Patch, USA Today, The Wall Street Journal, Yahoo! and Zagat.

"We're creating an online destination that will be true to, and expand upon, the Starbucks experience by delivering free, premium offerings that are selected specifically for our customers and localized for increased personal and community relevance," says Stephen Gillett, Starbucks CIO and general manager of Digital Ventures, a business unit of Starbucks. "To bring this to life, we partnered with Yahoo! to develop the platform as well as to power the search feature and contribute content."

The Starbucks Digital Network will offer free access to various paid sites and services, exclusive content and previews, free downloads, career tools and local community news. Starting this fall, customers can explore and access this content via six different online "channels:" News, Entertainment, Wellness, Business & Careers, My Neighborhood and Starbucks.

For the health conscienceAnchoring the Wellness channel, Rodale, a source for content in health, fitness, and wellness, has signed on to be the primary health and wellness contributor for the Starbucks Digital Network. Starbucks customers will have access to specialized premium content, including articles, recipes, videos and community engagement across several of Rodale's brands, including Rodale.com, Men's Health, Women's Health, Runner's World, Bicycling, Prevention, Organic Gardening and Eat This, Not That!

In addition to providing content from its brands, Rodale's section will feature the Run, Ride and Walk finder online application for local community relevance. The Run, Ride and Walk Finder online application will provide access to geo-targeted maps of more than 300,000 routes that highlight Starbucks stores along the way, and customers can upload their own trails that begin or end at their local Starbucks.

"We are thrilled to equip the active Starbucks community with tools for living a healthier lifestyle," says Maria Rodale, Chairman and CEO, Rodale, Inc. "Creating content that is innovative, inspirational and actionable is always our goal and being able to share that content through Starbucks smart new digital network marks an exciting next chapter for Rodale."

Content for kids
Nick Jr. Boost, which will be featured in the Entertainment channel, is a complete, personalized educational program for early learners and their parents. Starring kids' favorite Nick Jr. characters, the advertising-free service features fun and engaging learning through games and activities that reward and encourage children as they play. Nick Jr. Boost is based on a curriculum that includes phonetic awareness, reading comprehension, critical thinking, counting, addition and subtraction, which help provide kids with a head start on the concepts and skills required for early academic success. Parents also get easy-to-use custom progress reports for each child and suggestions to extend the learning offline.

"By providing free access to premium services like Nick Jr. Boost, Starbucks and Yahoo! are giving customers a valuable offering and experience," says Tanya Van Court, SVP and GM of Nick Jr. and ParentsConnect. "We're excited to offer Boost as a core element of this launch."

Localized content
In the My Neighborhood channel, the Starbucks Digital Network will feature localized content to help people connect with their communities. As part of this channel, DonorsChoose.org, will help match customers with local K-12 public school classrooms in need of support. DonorsChoose.org is a nonprofit website where public and charter school teachers describe specific educational projects for their students, and donors can choose the projects they want to support. Donors can contribute as little as $1 to help bring a classroom project to life. After project completion, the donor receives photographs and thank you letters from the students they helped. To date, 137,136 public and charter school teachers have used the site to secure funding for nearly $55 million in books, art supplies, technology, and other resources that their students need to learn. Through www.donorschoose.org individuals from all walks of life have helped 3.3 million students from low-income families have the materials and tools they need to learn and succeed in school.

"DonorsChoose.org offers a personal approach to giving. We connect interested donors with classrooms in their community and invite them to track the progress of projects they support in their hometown. Being featured on the Starbucks Digital Network connects us with the local communities of Starbucks customers across the country which in turn will help many students and teachers take on innovative projects as well as cover basic classroom needs," says Charles Best, founder and CEO of DonorsChoose.org.

"Starbucks has pushed the boundaries of innovation for our customers for nearly 40 years, and with the Starbucks Digital Network we're creating a compelling offering that engages our customers in a new way while they are in our stores “ bridging our third place coffeehouse experience with the rapidly expanding digital world," says Howard Schultz, Starbucks chairman, president and CEO. "It will enhance the time people spend in our stores online, provide a new way for us to connect with customers and overall share an experience that can only be found at Starbucks. We are delighted to welcome these new content providers into the fold and excited to see how our customers respond."

The Starbucks Digital Network, in partnership with Yahoo!, will debut on Wi-Fi enabled lap-tops, tablets and smart phones in U.S. Starbucks later this fall.


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