By Sherrie Negrea
The Leading Hotels of the World, Ltd. (LHW) describes itself as a company that “offers all kinds of one-of-a-kind luxury hotels, resorts and spas.” The 430 independent hotels that are part of the consortium, however, all use the same marketing, sales network, and reservation system as part of their membership in the New York-based company.
The benefit of the membership can be optimized if the hotels take advantage of the services provided by LHW, which includes support in 25 cities around the globe. To gauge how the hotels were using its offerings, LHW decided that creating a hotel engagement scorecard would be one of its four goals for 2014.
Ted Teng ’79, president and chief executive officer of LHW, suggested the company work with the Leland C. and Mary M Pillsbury Institute for Hospitality Entrepreneurship at SHA to research how a measurement tool could be created to evaluate the member hotels’ engagement. Teng, who has led the company since 2008, is a member of the advisory board of the Pillsbury Institute.
Top-notch students bring a fresh perspective
“We knew the quality of the students,” said Deniz Omurgonulsen ’00, the company’s vice president for membership. “We knew they would bring a fresh perspective and an opportunity to test the measurement of engagement to results.”
Last January, Mona Anita Olsen ’04, assistant academic director of the Pillsbury Institute, started to work with MBA student Saniya Gandhi ’15, to conduct the research for the engagement tool in an independent study project. Before starting her MBA program, Gandhi had spent three years working with her family in Thailand to develop a hotel in the heart of Bangkok.
During the spring semester, Gandhi worked with the executive team in New York to build a computer-based scorecard to measure the level of engagement among the member hotels with the company’s services. Gandhi interviewed managers at selected hotels across the world, from South Africa to the Caribbean, which the company considered “highly engaged,” said Hakan Ozakbas, the company’s director of analytics.”We wanted to talk to them to find out about their best practices and how other hotels could learn and leverage that same behavior,” Ozakbas said.
In May, Gandhi and Olsen presented her engagement scorecard — a tool that measures a hotel’s engagement in membership, distribution, sales, and marketing — to the company’s executive team in New York. A score of 100 would be awarded to hotels that were highly engaged in using the services provided by LHW.
“We never had an engagement scorecard before,” Omurgonulsen said. “We only had quality inspections taking place once a year and financial reporting that was separate. The whole idea of the scorecard was that it would take into account other components such as finance, operations, and engagement to give us a holistic view of performance.”
LHW believes in many cases that increasing the engagement will boost a hotel’s performance. LHW recommends that the hotels increase their engagement in as many different services suitable for their business needs in order to optimize their revenue.
“It’s a two-way street,” Ozakbas said. “The hotels need help generating that revenue. How are they going to get that help? They need to be engaged in each of those four attributes.” Now that the scorecard has been completed, LHW plans to run the tool on salesforce.com, a platform it already uses. As the tool is implemented by the company in 2015, it is expected to have a significant impact on the way the company works with its member hotels.
“It will change the conversations once we look at the results for each of our properties,” Ozakbas said. “It will provide us with a more systematic tool to better evaluate how each point of engagement contributed to the revenue growth for each property.”
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