KPMG Travel CRM Report.

According to an international report being launched at World Travel Market, over 80% of travel companies see Customer Relationship Management (CRM) as key to the future success of their business.

The report, `CRM and the Global Travel Industry`, commissioned by KPMG, the global professional services firm, showed that the travel industry sees CRM as central to the success of their business. Travel companies agreed that in the current economic climate, the need for improved customer retention and more strategically focused customer acquisition is crucial.

The results of the survey were drawn from a cross section of travel and leisure companies in the US, Europe, and the UK. The main findings of the report were:

* Over 80% of travel companies see CRM as central to the success of their business.

* CRM and the Internet are now the two biggest priorities for the travel sector.

* Mid-tier travel companies will demonstrate the most dramatic growth in CRM investment in the future. This sector is set to double its spend on CRM in 2002, as mid-tier companies face increasing competition for customers from the largest travel groups.

* Travel companies view CRM as a long term investment, not just a quick-fix solution. The majority of companies believe that it will take up to 24 months before significant benefits are gained from CRM initiatives.

Nick Pattie, Director of Hospitality at KPMG, said: “As a whole, the travel industry has recognised that CRM works best when it is integrated as part of a company`s overall business strategy, rather than bolted on to existing technologies and processes. The travel companies who will benefit the most from CRM programmes are those who view CRM as an evolving initiative. These companies will be able to maximise their understanding of their customers changing needs, and subsequently increase revenues, whilst managing their cost bases.”


Customer service still being neglected by travel companies One issue that was surprising was the poor level of attention given to customer service within CRM programmes. Despite most companies saying they are facing swiftly diminishing margins, and that customer retention was a major priority for their businesses, less than a third of these companies have extended CRM projects to cover customer service operations.

Half of the companies surveyed have recognised that they need to consolidate the information they have on customers in order to maximise their knowledge and understanding of their value and profitability. However, companies will find it difficult to gain a consolidated, 3600 view of their customers, as data is currently held in a variety of disparate systems and formats that will prove challenging to format. At present:

* Over 50% of travel companies still hold customer data in a variety of isolated databases, supplemented by large volumes of paper records.

* 30% of the largest companies still keep some customer records in paper format.

* On average, customer service accounts for less than 20% of the travel sectors CRM spend.

Nick Pattie said: “In the past, the travel sector primarily thought of CRM in terms of sales and marketing - or as gaining, rather than gaining and retaining customers. However, many travel companies are now developing far more sophisticated CRM strategies, that take into account the potential for a customer to generate revenue even after their initial transaction has taken place. This can be either directly, or through incentive driven referral programmes.”

KPMG commissioned `CRM and the Global Travel Industry` for World Travel Market, November 2001. The international report was compiled from a cross section of travel and leisure companies in the US, Europe, and the UK. Companies ranged from retail travel agencies, online internet travel services, inbound tour operators, business travel agencies, incentive tour operators, to eco tourism/adventure companies.

The results were compiled through telephone interviews with market leaders and selected mid-market companies, a paper-based questionnaire was sent to over 6,500 Meridian Club Members, and qualitative research and interviews were carried out by KPMG`s CRM specialists. The research was carried out between August and October 2001. Categories of companies surveyed are: Small: turnover of £1 to £1.5mn, Medium: turnover of £5 to £49mn, Mid market: £50 to £249.9mn and Large: 250mn+