International Journal of Management Research and Social Science (IJMRSS) ISSN 2394-6407(Print)

Volume 7, Issue 4, October – December 2020 ISSN 2394-6415(Online)

Emerging Role of Customer Relationship Management

in Hospitality Services: A Study of Hotel Sector in India
Dr. Ansuman Sahoo
Lecturer, IMBA, P.G. Department of Business Administration, Utkal University, Vani Vihar, Bhubaneswar

Abstract — Today, in this ferocious competitive economy customers are the centre for each and every business transactions
for each and every sector. And in the global market scenario, customers are the sole reason for the existence of every
business organization. Moreover Customer satisfaction is the strategic mantra to achieve global competitiveness and
sustainable growth. Therefore, in this emerging economy Customer Relationship Management (CRM) concept has emerged
as a popular business strategy. It is all about the application of innovative marketing technology that not only retains the
existing customers but also acquires new customers. Usually for service sector like hospitality and hotels CRM practices are
being widely adapted to support customer satisfaction, customer retention and profitability through establishing long term
relationships with the customers. The proposed study will provide an insight into the technological innovation in hotel
industry to develop their relationship with their guests/customers. The main purpose of this study is to understand the
strategic role of CRM technology to transform hospitality services in India with respect to Hotel operations. Based on the
data collected through secondary sources; this paper makes an assessment of the extent of the awareness and innovativeness
prevalent among hotel sector in India.

Keywords — Customer Relationship Management; Hospitality; Hotel sector; Technovation; Global Competitiveness.
relationships with the customers in a more effective mode.
1. Introduction Customer relationship management (CRM) is the
innovative approach which facilitates an organization to
track the existing as well as potential customers
“There is only one boss; the customer. And he can fire
proficiently. A great deal of sense to keep existing
everybody in the company, from the chairman on down
customers happy rather than devoting high levels of
simply by spreading his money somewhere else”- Sam
marketing effort on acquiring new ones.CRM can be
Walton –founder Wal-Mart. Today, in this ferocious
defined as a system which helps organizations build
competitive economy customers are the centre for each and
customer relationship and streamline processes, so they can
every business transactions for each and every sector. And
increase sales, improve customer service and increase
in the global market scenario, customers are the sole reason
profitability (Nagi,2005). CRM concept is a technique to
for the existence of every business organization. How to
handle customer relationships which originated from the
satisfy customers and make them loyal is now become the
earliest notion of relationship marketing approach
major challenge for the service industries across the globe.
(Gummeson, 2008). Furthermore, according to
Managing relationship with the customer’s further act is a
Gummesson (2008), CRM is defined as “the values and
significant factor for the achievement of competitive
strategies of Relationship Marketing with special emphasis
advantage. Thus, leading marketers of 21st century are
on the relationship between a customer and a supplier
increasingly adapting the concept of relationship
where businesses can store customer and prospect data,
management practices. Building relationships through One-
track customer communications and share this with similar
to-One marketing is now the strategic mantra to achieve
groups. It helps to manage relationships with customers
global competitiveness and growth sustainability. As per
and the business to grow. Similarly, CRM can be
many research it has been proved that it is more profitable
considered as a company-wide business strategy designed
for a company to retain an existing customer than to attract
to improve revenues and profitability, reduce costs and
a new one. Likewise, according to great management guru,
increase customer loyalty. Peeru Mohamed and Sagadevan
Peter Drucker,” the purpose of business is to create and
(2002) have considered CRM as “a management process of
keep a customer.” Hence, many service organizations
acquiring customers by understanding their requirements,
hospitality offers frequent–guest programmes and lucrative
retaining customers by fulfilling their requirements more
discounts and reward programmes for the loyal clients.
than their expectations and attracting new customers
through customer specific strategic marketing approaches.”
2. Literature Survey On the other hand Parvatiyar and Sheth (2013), declared
Customer Relationship Management as “ a comprehensive
In the present day, technotronic revolution has strategy and process of acquiring, retaining, and partnering
revamped and reshaped the way of doing business with selective customers to create superior value for the
operations. Hence, technology plays a pivotal role to build company and the customer.” In a nutshell CRM is a

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International Journal of Management Research and Social Science (IJMRSS) ISSN 2394-6407(Print)
Volume 7, Issue 4, October – December 2020 ISSN 2394-6415(Online)

synergistic blending of customer relationship marketing paper aims to understand the practice of customer
strategies and information and communication technology relationship management approach adopted by Indian hotel
to generate profitable and long-term relationships with sector to foster business excellencies. This paper further
customers and other stakeholders. In addition, CRM analyses various issues and challenges associated with
technology is a cross-functional integration of people, employment of CRM technology in hotel context
process, operations and marketing strategy enabled through
ICT applications which helps an organization to deliver 4. Research Methodology
efficient customer value. Thus, the primary focus of CRM
is to upgrade relationship with the customer from a
“stranger” to “acquaintance” then to a ‘friend’ and finally This research is based on the secondary data. The data
to treat him as a ‘partner’ (Raizda, 2011). However, Leena, and information has been obtained from various sources
et al. (2015) considered CRM as an “umbrella concept” which includes books, personal sources, journal, previous
that place the customer subsequently to the center of any studies, published statistics, newspaper, reports and
organization. websites. Then it makes an assessment of the extent of
awareness, innovativeness and responsiveness prevalent
Indian hospitality sector as an intrinsic component of among hotel sector in India for managing customer
tourism industry has undergone a paradigm shift in the relationship.
present scenario. Since past few years the growth in the
hotel industry had a significant contribution to the tourism 5. Business Transformation through CRM
industry of the country. Due to remarkable influx of Analytics in Hospitality Services
domestic as well as international tourist there has been
tremendous growth opportunity for the hotel industry in CRM is basically an automated technology to process
India thrived by 'Atithi Devo Bhavah' campaign. In hotel customer data which are used for future decision making in
sector service quality and customer satisfaction are the two an organization. It also helps in utilizing the data to analyze
very significant elements playing pivotal role to inculcate and interpret the behavior of the customers that helps the
competitive advantage. Because if the customers are highly organizations to know and understand each segment of the
satisfied with the quality of service they will prefer to visit customers. In general, customer analytics are a kind of
the same hotel repetitively and also attracts more customers software based on Online Analytical Processing (OLAP)
through referral marketing. Therefore in people oriented technique to help in mining as well as analysis of the
sector like hotels managing relationships with the customer database. CRM analytics platform mainly
customers further act as a key tool to achieve business consisting of a data warehouse to collect, store and
excellencies. CRM has ultimately reshaped the way of analyze data , integration of data , visualization of data
managing relationships with the valued customers in the through score cards, dashboards and lastly query and
hotel sector. In hospitality setup CRM helps in maximizing reporting analysis through OLAP.
customer satisfaction, loyalty and long-term relationship
formation. As a result, it leads to spread of positive word of Customer facing application mostly related to
mouth, profitability, enhancing brand image and also marketing related activities including sales, customer
reduction in customer switchover rate. services and care and campaign management. On the other
hand ,customer-touching applications deals with customer-
Therefore, the essence of CRM philosophy in hotel
oriented activities like searching of customer from the
sector is to strategize a customer–centric environment.
database ,feedback management, E-mail and auto
However the success of CRM strategy depends not only on
responses, loyalty programmes ,etc. In hospitality sector
the capability of the hotel to identify the needs and
two types of CRM can be implemented. Generally
demands of customers but also on the way of achieving
analytical CRM leads to profit generation through maintain
customer life time value. CRM tools further assist the staffs
long-term relationships with the customers while,
of the hotels to store and access the customer information
operational CRM increases profitability through saving of
throughout the organization. Moreover, the ultimate goal of
service cost (Arul and Baranidharan,2012).Data-mining
CRM approach in hospitality is to handle relationships with
technology also emphasized as a significant tool to forecast
the customers in a holistic manner.
guest behavior in hotel sector. Hoteliers can make effective
marketing decision through the information generated from
3. Objective data mining which further establishes customer
relationships (Danubianu and Hapenciuc, 2008). Years
The main objective of the study is to analyze the before business analytics were purely hardcore technology
strategic role of CRM in hotel sector to transform the oriented and restricted to skilled professionals only.
service operation through technological innovation. This However, in present days the technology has become

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Volume 7, Issue 4, October – December 2020 ISSN 2394-6415(Online)

online based and user–friendly to assist all groups of specific for the hotel operations. Hotel management system
employees ranging from high level executives to front facilitates hoteliers to manage different activities with no
office staffs. Business analytics and CRM have brought a difficulties from reservation to after sales services.
phenomenal transformation in the hospitality sector. In the
process data management solutions implemented in In hotel sector, at the time of check in staffs of the
companies and enterprise to collect historical and present hotel often records the guest history in their customer
data, while using statistics and software to analyze raw database for future utilization. Accordingly at the time of
information and deliver insights for making better future check out also they record the feedback and suggestions to
decisions. CRM analytics can integrate all customer data provide customized and enhanced services in their next
points including call centre, internet email and social media visits. Similarly, with the help of yield management and
and customers. This helps the hotels to understand their revenue system hotel authorities also can develop pricing
customer more proficiently. Furthermore it also helps the strategy according to the different category of guests.
hotels to identify their potential and valued customers to Moreover, communication technology also provides the
serve them with latest offers. CRM tools along with opportunity for the hoteliers to interact with the customer
business analytics further helps to demonstrate quicker in regular basis which ultimately helps them to build
decision making process too. Through predictive analytic customer relationship. In view of that, ICT regulates the
tools hoteliers also can forecast the repurchasing or repeat CRM strategy for the hotel sector to retain and satisfy
visit intensions of the guests. Nonetheless, CRM analytics customers. With the help of ICT CRM facilitates one-to-
further helps the hospitality organizations to track the one marketing, identify specific demands of the guests and
performance records related to customer satisfaction, moreover acts as a life saver for the hotel sector (Rahimi,
retention and profitability through benchmarking analysis. 2007). There are many CRM solution providers exists
throughout the globe to provide utmost customer service
6. Strategizing Technovation through CRM facility for the hotels. They provide customized products
in Hotel Sector and marketing solutions for the famous hotel brands of
India. Some of the common CRM software solutions are
SAP-CRM, ORACLE, Siebel, Sales force, Marketo,
Usually for service sector like hospitality and hotels
Experiture, Guestware, Kapture CRM, TLC group and
the first and foremost skill that ultimately makes a big
many more.
difference in the service quality is the promptness in
solving customers’ problem through a systematic and
responsive manner. Accordingly, strategizing innovative 7. CRM Application in Indian Hotel Industry
technology is a tool in hospitality services further leads to
enhance customer satisfaction level as a result of exceeding It has been rightly said by John Lydgate that “Most of
perception over expectations. In CRM arena both the time you can please some of the people, but not all.”
technology and strategy has a dyadic relationships in hotel Whereas CRM technology helps in serving all customers
sector. In hotel industry the customer–centric approach better, this in turn would improve your business processes.
technology of CRM effectively establishes long term CRM has emerged as a miraculous tool to delight
customer relationship with help of comprehensive database customers through having an in-depth knowledge of
management. customer’s needs and demands. CRM has phenomenally
transformed the hospitality sector in global context. It has
CRM plays a significant role to achieve global been widely accepted by marketers to attract as well as
competitiveness in hotel industry. All together CRM acts a retain prospective customers in hospitality setup.CRM
one stop database consisting of the customer’s information software at one go support hospitality service sector to
in a comprehensive way , provides better customer support , strategize sales, marketing, e-commerce, customer care and
customized the product as per the demand of the post-sales services. According to Mohammed and Rashid
customer ,increases referrals through positive word of (2012), in hotel sector there are four dimensions of CRM
mouth results in retention of customers , enhances sales i.e. customer orientation, CRM organization, Knowledge
productive and moreover employs winning strategies like management, and technology based CRM improve
cross selling of augmented products. organization performance and create creates competitive
advantage.
6.1 Technological Solutions for the Hotel Sector
In hotel sector, CRM tools helps in keeping track of
Technological advancements facilitate the hotel sector customers and their specific demands. Accordingly,
to collect, analyze and exploit customer information hoteliers can frame appropriate marketing strategy to
broadly (Lancaster and Luck, 2010). There are huge provide utmost service quality deliverance to the guests.
number of integrated software have been developed Furthermore, it also helps the hotel sector to increase

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Volume 7, Issue 4, October – December 2020 ISSN 2394-6415(Online)

profitability and build customer loyalty and retention in an  Analyzing the behavior of the guests from the past
effective manner. For this reason, presently CRM is the transactions.
latest buzz in the hotel sector all across the world. Many  Automation of the sales and marketing procedure.
tycoons of the hotel sector have successfully implemented  Technology Management.
CRM tools in their organization for smooth service  Comprehensible strategy for the implantation.
operations. Hence, famous hotel chains of India are also  Proper Training to the staffs.
supporting CRM technology to facilitate world class  Selecting the right CRM solution provider.
customer service to their trustworthy customers. According
 Integrity of the system and security measures.
to Chadha (2015), in case of hotel Taj, New Delhi CRM
 Proper co-ordination between chains of hotels.
practices implemented mostly inform of analyzing the
 Allocation of funding.
existing customer database and personal counseling. The
staffs of the hotels were highly satisfied with the CRM  Social media maturity level of the hotels.
approach as it leads to higher level of customer satisfaction  CRM implementation restricted to big hotel chains.
and retention. Similarly, Banga et al. (2013) found that  Lack of awareness and inadequate knowledge about
maximum hoteliers in Ludhiana demonstrated positive latest technology.
response towards CRM implementation that practiced
through analyzing customer database and personal 9. Results, Discussion and Suggestions
counseling which boost customer satisfaction and loyalty.
While, Bhavani and Pawar (2012) found that in star hotels The main objective of the paper was to investigate in
in Hyderabad, CRM establishes a positive correlation to how CRM helps the hotel sector to attract, retain and
among the customer expectations and perceptions. Sahu maintain guests to achieve customer loyalty. In the study
(2011) indicated that the practice of relationship the author through a conceptual review tries to find out the
management frequently occurs in five star hotels as effectiveness, scopes and challenges for CRM technology
compared to mid range and budget category hotels in India. implementation in the hotel set up. The study will provide
Likewise, Deshmukh et al. (2012) in context of Nagpur star an insight to the practitioner in hospitality service sector
hotels observed CRM system of 5 star hotels were highly and research community towards relationships with
customer centric as compared to the hotels with lower star customer that lasts forever. From practical point of view,
rating. Srivastava ,et al.(2018) in their study in this paper will increase the awareness level of hotels to
Jharkhand Hotel industry explored that CRM systems frame and innovative competitive strategies through
facilitates cost effective and high quality service delivery implementing suitable Customer Relationship Management
that leads to customer loyalty. On the other hand prototype. It will also provide the staffs of the hotel
Thryambakam and Bethapud (2013) further emphasized on industry relevant information to frame a qualitative CRM
the significance of social media integration with CRM strategy.
system of hotels to enhance customer service operations in
an effective way. At the moment, CRM implementation in hotel service
sector is the need of the hour. However, the process
8. Issues and Challenges requires commitment and synergy between the departments
of the entire hotel. The main issue for implementation of
There is no doubt that technovation has revolutionized CRM is the integration of the software with the existing
the marketing landscape radically. However, it also faces management information system designed for the hotel.
different challenges in its success path. CRM technology is Besides, CRM only provides accurate results if it has been
yet to gain popularity due to many hoteliers still prefers both strategically and operationally integrated completely
traditional methods of approaching the customers. with the hotel system. Furthermore CRM further acts as a
Therefore, CRM needs to be customized accordingly to the container which needs to be filled up with relevant
business model of the hotels. Furthermore, the customer data in right time. Otherwise data mining is not
effectiveness of CRM tools also depends on the number of possible and successful too.
customers.
Similarly, it is also found from different studies that
higher the star levels of the hotel higher the success rate of
8.1 Key Challenges with CRM Implementation CRM implementation. Hence, CRM solutions are best fit
only for the premium segment group of hotels. There is
The key challenges associated with CRM also requirement to build up of a strong CRM team
implementation in hotels are discussed below. associating top level executives, customer care and IT
 Handling of guest’s information through collecting, department to develop a successful CRM strategy for the
storing and accessing in apposite manner. hotels. In addition to the above, staffs of the hotel also

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Volume 7, Issue 4, October – December 2020 ISSN 2394-6415(Online)

needs to be given proper training regarding the flexibility References

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