Not All Net: Most Sales Still Come By PhoneNot All Net: Most Sales Still Come By Phone

There's no doubt that Internet technology is reshaping the hotel industry and making the job of building brand loyalty trickier than ever. Yet the Internet is a long way from taking over the hotel business.

Online travel agencies such as Expedia, Orbitz, and Travelocity are growing quickly, but they account only for about 2% of Hilton Hotels Corp.'s bookings. Those bookings are important, because they're growing quickly and because using that channel shaves off as much as a fifth of the margin an operator makes on a room booked directly with Hilton.

That's why most hotel chains--Hilton included--have aggressively sought to drive traffic to their own proprietary sites, issuing best-rate guarantees to avoid being undercut by third-party sites and granting loyalty-program points for online bookings only if they're made through their proprietary sites. Today, 11% of Hilton bookings come through Hilton.com or other in-house Web sites, which for the first time this year will exceed call-center bookings.

Nevertheless, half of Hilton's bookings still come through a direct phone call to a hotel property, and 20% still come through travel agents. It's clear online brand loyalty remains a small part of a much larger picture.

Hilton expects hotel booking to remain a multichannel sales effort, so it's using its OnQ customer-information system and customer-facing Web sites to improve performance across platforms.

On the Web, for example, more than a million members of Hilton's HHonors rewards program created online accounts from May 2002, when the option was made available, through February. And close to 700,000 later made changes to their online profiles.

Hilton also is using its data to improve its call centers. Giving front-desk employees access to HHonors accounts has reduced errors and confusion so that questions related to loyalty points went from 20% of all inquiries to the call center to less than 4%. And by giving call-center employees access to the integrated OnQ system, they now can field a customer complaint using one IT system rather than four. It's part of how Hilton increased call-center efficiency 64%, letting the company increase the number of hotels and customers without increasing call-center employment.

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