Reference no: EM131040230

A Hotel Concierge in Your Pocket

Luxury hotels are renowned for their concierge services that cater discreetly to every guest. One such hotel, the SLS Hotel in Beverly Hills, California, is part of the Luxury Collection Hotel brand owned by SBE Entertainment Group LLC. Debuting in 2008 following a $230 million renovation of the former Le Meridien Beverly Hills, the 297-room SLS Hotel is all about delighting the senses. French modern designer Philippe Starck oversaw the $100 million décor. The food is the work of chef Jose Andres, 2011 recipient of the James Beard Foundation's award for most outstanding chef in North America. Customer service, then, is a hallmark for the SLS Hotel. The hotel's IT manager, Eric Chao, notes that service is all about effi - ciency, gratification, and, most importantly, convenience. The last thing a luxury hotel wants is for its guests to feel that they have to work to get service during their stay. In fact, Chao maintains that many guests do not even want to speak directly with any of the hotel's employees.

To satisfy these high customer expectations, SLS Hotel had to devise a strategy to discreetly improve the hotel's already sky-high-level service. To achieve this objective, the hotel launched a mobile hotel app called GoSLSHotel (www.goslshotel.com) that offers convenient, around-the-clock service at the touch of an icon. Guests who want a late-night snack, an extra bottle of shampoo, or valet service no longer need to pick up their room phone, search for the correct button, and then interact with a hotel employee. Instead, they can request any service they need within seconds or minutes simply by clicking an icon on their smartphones or computers. GoSLSHotel even has a built-in timer.

When a guest presses the "Send" button for an in-room dining order, the order immediately shows up on the kitchen's computer, where the time that the order was placed is shown by different-colored flags. The hotel claims that GoSLSHotel has generated "overwhelmingly positive comments." GoSLSHotel not only drives better customer service. It also serves to drive business and to generate more revenue for the hotel. The first week after the app launched in 2010, it generated 30 service requests (spa, dining reservations, and housekeeping, among others), 15 room-service orders, and 2,500 guest "touches." Two years and many enhancements later, the hotel considers GoSLSHotel to be such a competitive advantage that it refused to allow Chao to discuss specific revenue numbers. Despite this secrecy that is imposed on the staff, the hotel closely monitors the app's numbers. Initially designed as a front-end (customer-touching; discussed in Section 11.2) guest service tool, GoSLSHotel now performs many back-end functions that track all guest touches, purchases, and requests and then use these data to generate reports that inform the hotel about guest preferences and trends. The app also has a feedback icon that allows guests to register complaints in real time to ensure they are addressed during their stay. Consider the case of Linda, a fictional guest at SLS Hotel.

Linda always uses GoSLSHotel to order Dom Perignon champagne upon arrival. Because the app records this information, after five stays the hotel might send a bottle of Dom to the room before Linda even arrives. Similarly, customers who frequent the hotel's 5,000-square-foot Ciel Spa might receive a discount on their next relaxation massage. The hotel recently offered gifts from the spa to guests who were willing to "like" SLS Hotel on its Facebook page. Although GoSLSHotel provides a signifi cant competitive advantage, customers are very concerned about the app's security. To alleviate these concerns, SLS Hotel takes great pains to communicate GoSLSHotel's security features so guests will feel comfortable using the app.

GoSLSHotel users sign in with their room number and name, and they are not required to swipe their credit card for any purchase, thus easing the security fear factor. As mentioned above, GoSLSHotel has driven new business, generated additional revenue, and provided SLS Hotel with a crucial competitive advantage over its competitors. However, the app's return on investment is just as much about the "intangibles" as it is about generating revenue. The level of convenience added by the app generates positive customer feelings, which in turn boost the hotel's reputation and ensure future business growth and stability. Sources: Compiled from E. Savitz, "Rushing Mobile Apps Out Means Ushering Hackers In," Forbes, February 26, 2012; E. Savitz, "The Growing Problem of Privacy-Invading Mobile Apps," Forbes, February 23, 2012; L. Tucci, "Hotel App Pockets Revenue by Putting Concierge Service in Your Pocket," SearchCIO.com, February 23, 2012; P. Dailey, "SLS Hotel Adds Personal Touch to Guest Visits with Custom Mobile App," Hospitality Technology, May 13, 2010; "Runtriz Delivering Mobile Guest Facing App for SLS Hotel at Beverly Hills," Hospitalitynet.com, February 3, 2010; www .goslshotel.com, accessed March 5, 2013.

Questions
1. What is the SLS Hotel's CRM strategy?
2. What is the SLS Hotel's CRM system (used in the case)?
3. Why does GoSLS Hotel give the hotel such a competitive advantage? Is this competitive advantage likely to be long-lived? Why or why not?
4. What are the privacy implications of the GoSLS Hotel app?