As the Global Hotel Alliance celebrates its fifth anniversary this week, its ceo Chris Hartley tells how it moved from being a small goodwill group to the largest independent hotel alliance in the world.
It was at the ITB exhibition in Berlin in 2004 that four upmarket hotel groups announced they were setting up an alliance. It caused little stir. Smaller hotel chains were forever banding together - and often soon falling apart - in repeated attempts to prise customers, especially business travellers, away from the major chains.
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Kempinski Hotel Duke's Palace
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Five years on, the Global Hotel Alliance (GHA) has not only grown to 11 members but is now strong enough to negotiate deals with airlines, credit card companies, car rentals firms and even GDSs. Much of the driving force behind this rapid expansion has come from Chris Hartley, an Englishman appointed the GHA's ceo in 2006.
Mr Hartley had by 2006 worked in the hotel industry for 15 years, the last ten with Kempinski Hotels, one of the four founders of the Alliance. His last position with the group, before switching to the GHA, was senior vp sales and marketing.
His first aim was to complete the move from a loose alliance of different brands to a tighter, more business-like grouping. "We persuaded the 11 ceos that we should become more corporate. We modelled ourselves on the airline alliances, especially the Star Alliance, with a dedicated team to drive it forward and give it momentum," he said.
The next move was to create a critical mass to make other suppliers take the GHA seriously. This saw new members joining in 2007 and 2008, including Landis, Marco Polo, Leela, Cham and Anantara. Lastly The Doyle Collection and Parkroyal joined. There are now 180 plus hotels in the Alliance.
Mr Hartley said that with this growth, the alliance felt it was in a position both to bring value to the members and to move in the direction it wanted to go. But the numbers also gave it another advantage. It was now big enough to stay stable if one brand left, unlike smaller alliances which can be de-stabilised if one member leaves.
"Looking at our model of the airline alliances, we also needed as fast as possible to get all onto one common technology platform," he said. The first step here was a partnership agreement with Micros-Fidelio, which provides property management systems, central reservation and customer information solutions for hotels.
With Micros-Fidelio aboard, the GHA has focused on combining central systems, sharing resources and reducing fees. The aim with Micros-Fidelio was to shift all members to one common platform. The deal has also helped drive down distribution costs.
A united technology front would also help the GHA in its negotiations with airlines, car companies, GDSs and credit card companies. "We were suddenly in a stronger position to talk to third parties. We could not only sign contracts, we could enforce them. So we very quickly drove down costs," Mr Hartley said. Ten of the members are now on the same CRS which, he said, had knocked millions of dollars off distribution costs. The Alliance was also negotiating with all major airlines.
"Bit by bit we were also able to do more corporate sales operations. We began building up a central data base of our customers. This will ultimately bring us more cost reductions but it has also enabled us to move in the last 12-24 months to being a customer facing organisation," he said.
From here, the GHA feels it can broaden its appeal. "We are now using CRM (customer relationship management) so we can manage customer loyalty and we shall be launching a global guest recognition programme this year."
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Kempinski Hotel Moika 22 St. Petersburg |
This is where the value for the members comes in, Mr Hartley said. The goal of the Alliance is not to make money nor does it have a financial goal. But what it does aim to do, besides cutting costs, is to bring in more guests for its members, enabling them to make more money.
Partly it can do both through its new found leverage as a tight alliance. But the GHA also offers through its members, Mr Hartley said an "eclectic product with local branding but also the security of a larger operation." In other words, each brand, although all up-market, is different. Mr Hartley compares this to how major chains are widening the choice of brands available to customers.
But while consolidating its new found strength, the GHA is also looking ahead. "We are looking now at the sort of product the customer will be looking for in the next ten years. How can we appeal to the next generation?" he said.
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Hotel Baltschug Kempinski |
www.globalhotelalliance.com
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