Integrated Report 2020
Sales and marketing – aligning with what hotel guests want
To compete sustainably, CLHG must constantly differentiate its brands, publicise the quality and value of our offerings, and maintain a strong base of satisfied guests who regard our hotels as their 'home away from home'.
Our sales and marketing department manages vital intellectual capital aspects, such as maintaining a positive brand reputation, constant innovation, and leveraging client feedback to improve operating efficiencies.
We differentiate our brands to accommodate every type of traveller and budget.
| Fairview Hotel | Comfort where you need it and created to be a traveller's oasis | ||
| Courtyard Hotels | Designed to impress, with superior and impeccable style | ||
| City Lodge Hotels | 'Comfort in the little things' that deliver more than expected | ||
| Town Lodge | A little extra can mean a lot, as this brand targets millennials and more technologically connected guests | ||
| Road Lodge | Basically brilliant where value, value, value is the name of the game |
Our marketing position
We are in a low-occupancy environment within a highly competitive sector, which makes the current 'market pie' exceedingly small. The rates we offered to customers during the tighter levels of lockdown were much lower than budgeted, while room costs have increased due to PPE and additional COVID-19 cleaning protocols. We have put in place a pricing strategy to strike a balance between affordability for guests while ensuring we adequately cover our costs.
To contain costs, we suspended all paid advertising and rely on public relations and social media channels for brand exposure. We have embraced the 'new normal' of participating in webinars and virtual events to ensure that the group receives online exposure.
We continue to position ourselves as a market leader and spread the message that our hotels remain safe and clean places to stay and work. A reputable, independent service provider continues to conduct risk assessment audits on our properties to ensure our COVID-19 protocols are effective. The fact that we were one of the first in the country to be awarded an internationally recognised 'Safe travels' stamp by the WTTC assures our guests that they will be safe with us.
Pricing and revenue strategy
During the first half of the financial year, we focused on retaining and growing CLHG's share of the market, despite increasing competition. As part of this strategy, we recruited an experienced revenue manager who is introducing alternative pricing strategies. In previous years, CLHG offered one rate regardless of seasonality or demand. We are now introducing the Best Available Rate (BAR) philosophy, which ensures that we offer our rooms at the right price relative to supply and demand. This will be an advantage for our customers, while driving increased revenue for CLHG during times of intense market competition or heightened demand periods.
There is a distinct trend for customers to pursue lower rates and higher value. This was apparent even before COVID-19, as consumers tightened their belts in an already strained South African economy. Prior to the lockdown, the group's room rate increases in South Africa were below inflation as a result of the group's increased capacity, our competitors' discounted rates and promotions, and pressure on business and consumer travel budgets. By adopting the BAR methodology, we are well positioned to offer the best rate possible at any given time. Post COVID-19, our dynamic rates will improve forecasting and allow the group to identify opportunities within each market segment. The COVID-19 pandemic has led us to reset and prepare CLHG for the future.
We have also focused on improving our leisure travel revenue by introducing a weekend special rate. Our brands are a first choice for business travellers, opening the door to enticing these customers to extend their stay for a leisurely weekend. Our special weekend rates proved popular until COVID-19 put a temporary end to leisure travel. We expect the return of our weekend special rate to increase in popularity.
Weekend bookings are notably higher at our Road Lodge hotels, which offer a great 'no frills', value-for-money solution during tough economic times.
Monitoring and building our brands
We recognise that, in the digital age, any journey starts with browsing for accommodation online. We therefore optimised online booking options through our own website and listings with online travel agencies (OTAs). The addition of online booking platforms such as Lekkeslaap.co.za and Booking.com during the year helped expand brand reach across both local and international markets. We intend strengthening these partner relationships as we rebuild our future.
Road Lodges are now bookable via global distribution systems (GDS) Galileo, Amadeus and Sabre, which streamline hotel bookings for travel agents.
Travellers often require assurance that booking online for African destinations is safe. For this reason, we boost our presence on platforms such as TripAdvisor by encouraging guests to leave reviews. We regularly monitor these reviews and Rate-Us, our internal guest feedback, quality assurance system, to keep abreast of guest feedback. Each review is individually responded to and their outcomes analysed monthly to identify potentially recurring trends and improve our delivery of service excellence.
Our refreshed and relaunched website, www.clhg.com, has made online bookings far simpler and more seamless for guests. The website includes a highly secure payment gateway that can accept payments from across the world. Securing a room directly through our website or via our hotels, offers a financial advantage to guests. However, we highly value the relationship we have with our travel management partners because they reach a broad range of travellers, including corporate, government, group and package tour bookings. We continue to pay 10% commission to agents who book CLHG accommodation for their clients.
The group continues to meet industry benchmarks in terms of in-room amenities and cleanliness, friendliness and professionalism, safety and security and location and convenience. However, we recognise the need to respond faster to technologies being adopted by guests. In the current financial year, we updated our in-room TV and WiFi offerings and launched the CLHG mobile application.
CLHG is well placed to be the first choice for safe accommodation as travel restrictions ease. Our well-known strict hygiene protocols and contactless solutions – from check-in to check-out – are an advantage during times of heightened safety awareness.
Marketing and selling our brands
To ensure the profitability of our brands, we implement various marketing and stakeholder relations initiatives.
We continually explore ways to enhance the value proposition offered to regular guests through the CLHG Rewards programme. Similarly, the Corporate Club is an exclusively online offering for businesses and their employees to earn and redeem CLHG Rewards points.
Targeted outdoor and radio advertising continues to play a significant role in our marketing strategy. During the year, a country-wide radio and online campaign raised awareness of special deals available within the group, including the half-price special offering. These campaigns were well received and for the first time we won a global advertising award for a radio campaign.
We will continue to drive engagement, brand awareness and bookings by using compelling content, and growing the group's Instagram presence and Twitter engagement. Our #CLHGExplore campaign is a case in point, highlighting the great locations of CLHG hotels by sharing points of interest and activities close to these properties.
Building and developing relationships with travel management companies and corporate clients is important. We take every opportunity to participate in client workshops and travel days to boost awareness of our hotel brands. We also create opportunities for relationship building through sales activations with our travel agent partners, as well as client appreciation functions, which enable us to thank them for their business personally. In addition, we have marketing partnerships with various companies such as airlines, car rentals, retail, banks, financial services and similar, to offer value for their clients.
Interacting with our guests
Our social media presence is constantly growing as more people use channels such as Facebook, Twitter, Instagram and LinkedIn to communicate with us. Guests share their experiences, suggest improvements, enter competitions, and thank individual staff members for their great service. All of this feedback provides invaluable insight.
While we focused on Facebook and Twitter early on, we are driving our Instagram presence to reach younger generations. Our website and social media presence was amplified by introducing professional search engine optimisation (SEO) to our online content.
WOW innovations
The WOW portal produced several implementable ideas from employees across the group. Specific WOW ideas actioned across the group include Spekboom décor for hotels and a concept for the retail section of CLHG. Outdoor gyms pilot was launched just before lockdown commenced at Town Lodge Johannesburg Airport prior to COVID-19. We also implemented filtered water stations at 31 CLHG hotels, with further roll-outs planned to all South African hotels in 2021, to reduce the amount of water sold in individual plastic bottles, which has proved enormously popular.
Our new Zero Bar sustainable amenities range evolved through an idea received on the WOW portal. The amenities are all low-packaging, plastic-free toiletries which can be taken home after our guest's stay. We tested them extensively to ensure that the products are both user- and environmentally friendly. The range is Proudly South African.
Our focus on innovation and technology was a priority well before COVID-19 shifted the way communities work and interact. The group is constantly on the lookout for technologies that will enhance guest experiences. When lockdown commenced, all central office employees migrated to remote working conditions. This process was fairly seamless, as we have always accessed our applications via a secure cloud-based Citrix environment.
During the past year, we upgraded the IT infrastructure at all our hotels to achieve consistent connectivity, improved security, more flexibility and reduce our IT operating costs. The network infrastructure layer was improved and WiFi solutions replaced. This project is 95% complete and all the upgrades should be complete by the end of 2020, taking into account the delays due o COVID-19. Upgrading the WiFi solution at 58 hotels is a considerable achievement in the post COVID-19 world as remote, reliable and effective connectivity becomes paramount to both business and leisure lifestyles.
We also improved our security systems and launched the third iteration of the City Lodge App.
New WiFi offering
Fast and reliable WiFi is essential to online-driven business, for the group and our guests alike. To improve reliability, we are deploying a new CLHG owned WiFi solution that gives us more flexibility and reduces our monthly expenditure for this service.
This WiFi system is also optimised for internal use for all group and guest activities. By taking advantage of WiFi-enabled technology, for example, waiters will be able to use a handheld phone or tablet with preinstalled software to facilitate smooth, paperless ordering.
The improved WiFi solution also gives us more flexibility with the services deployed for each brand and guest. Members of our CLHG Rewards programme automatically have a better experience than non-Rewards programme guests. In addition, we can monetise the WiFi service by allowing non-hotel guests to purchase additional WiFi time when using our restaurants or communal spaces.
The CLHG mobile App
Our City Lodge mobile App enables guests to make online reservations, post on social media, access CLHG Rewards, and find out about local attractions. The App will be enhanced to allow for voice calls through our enhanced WiFi solution, although this is currently in a testing phase.
We recently launched our online check-in functionality on our website and it is now also available on our App.
Reducing physical touchpoints
To ensure the safety of our guests and employees, we are utilising technology to reduce physical touchpoints in our hotels. We deployed online forms and QR codes to reduce the use of paper. COVID-19 screening documents for both guests and staff are presented electronically to minimise paper touchpoints.
We also provide a single information QR-code brochure in rooms that enables guests to download all the necessary information and functionality for their stay. For example, our restaurant menu is available online via a QR code. Menu options can be ordered from the comfort of a guest's room and collected at reception. We have also digitalised registration cards.
Guests are able to use WhatsApp to communicate with the hotel's reception through the in-house WiFi, who can remain in contact with them on WhatsApp after they check out. Guests can also use WhatsApp to make bookings or ask questions.
The group's website was redesigned to enhance usability. We also installed an interface between our website, App and the Lodgix Property Management System (Lodgix). This enables our guests to manage their own data easily. Our redeveloped website features heightened security and handles alternative payment methodologies such as SnapScan. The payment gateway does not retain credit card payment details, which limits the amount of personal data stored in our systems. User data is protected behind layered firewalls.
The COVID-19 pandemic has expedited our progression toward paper-free check-in and check-out processes and guest facilities.
Business Intelligence (BI) capability
Within the group we introduced a new BI tool, Qliksense, to improve decision-making and hotel and guest management through guest data analysis. Our sales team has leveraged the BI tool for tracking new business and personalising offerings for guests, corporate clients, and agencies.
We are also trialling a new AI tool at five of our hotels, with a view to roll-out the tool to all hotels on a phased basis. The tool aggregates and analyses CLHG historical performance data and external environmental data and provides predictive analysis of future demand and trends. Gathering relevant industry data, including flight and car rental data, allows us to better predict occupancy and demand and thereby enables us to forecast revenue more precisely. This tool will complement the introduction of Best Available Rate demand methodology and pricing, currently being developed.
The Guest 2.0 experience
To take our guests' experience to a new level, we mapped out every step of the guest journey lifecycle, from browsing for accommodation, booking, arrival, departure and post-departure. We analysed each of these steps to determine how we can streamline and improve the guest experience.
The process begins with the guest searching for accommodation, usually online. We therefore redesigned our website by updating the hotel page layout, adding attractive new images, and showcasing local attractions. Other enhancements to the guest journey include new payment options, such as SnapScan, to ease the booking process. As our guests navigate these uncertain times, we believe that clear communication to guests can help alleviate the stress of travelling and providing reassurance of what to expect on arrival and during their stay. We added a pop-up on our home page to direct guests to more information about how we keep them safe and which hotels are open.
Our new CLHG mobile App features increased functionality, including an online check-in which enables that guests only need to collect their key cards on arrival. It also features information about room service, food menus, and local attractions.
Cyber security
Data security and cyber threats are high on the global agenda, following several high-profile data breaches. The hospitality industry has not been exempt, and although we already had industry-standard security features in place, we invested additional time and resources to strengthen our security posture during this year. A group-wide cyber security awareness programme was launched to continually prioritise data security and implement specific responses to potential incidents.
