Why the Hospitality Industry Needs CRM

As a hospitality manager, you understand the specific needs of your guests. When you have return guests, you know what will make them happy. You understand how they like their bed turned down and how many towels they need. You know if they sleep late or if they’re up at the crack of dawn working out in the gym. You understand what’s going to keep a guest happy from the minute they walk in the door of your establishment to the minute they walk out.

So why does that service have to stop at the front door?

What is CRM?

One of the best ways to make sure that you’re offering your customers sensational service even when they’re not at your place of business is through CRM.

CRM stands for Customer Relation Management.

A 2017 article in Forbes described CRM this way: “At its core, customer relationship management (CRM) is all of the activities, strategies, and technologies that companies use to manage their interactions with their current and potential customers.”

Put another way, CRM is a giant tool for organizing your interactions with each customer.

What is CRM used for?

You use CRM software to manage everything you know about your customers and all the contact points that you have with that customer whether it’s via phone, email, text message, etc.

The idea is that you’ll be able to better serve and connect with your customer when you know more about him or her.

The ultimate benefit of CRM is the opportunity to create what Ken Blanchard called “Raving Fans”. These are people who don’t just love the service you provide but are loyal to a fault and rave about your services to everyone they talk to. These are the ideal customers.

Why is CRM important in hospitality management?

The answer seems pretty obvious—to better serve your customer especially in an industry where the customer matters the most. If you wait for the customer to walk into your establishment before you provide that service, more likely than not, you’ve lost that customer to a competitor. And losing that customer hurts your bottom line.

According to research done by Frederick Reichheld of Bain & Company, retaining customers is much more profitable than going out and finding new ones all the time. The report is a little dry, but the Harvard Business Review cites the essential data.

The financial benefits of CRM and returning customers

The cost of acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining a current one.

What’s more, by retaining a current customer, you’re boosting your profits. The study found that when the customer retention rate increased by 5 percent, the company’s profits went up by at least 25 percent and often more than that.

That’s all because that customer builds a relationship with your establishment and then that relationship becomes a part of his or her habits. What’s more, that customer will then share that relationship with friends and family.  

What is CRM in the hospitality industry?

In the hospitality industry, CRM doesn’t just look at the contact points, but it also tracks essential information. Instead of you remembering that certain guests like to use the gym at 6 a.m. and certain guests like to sleep late, the CRM software does that. Now, not only do you know the sleep habits of your guests, but the rest of your staff does as well.

When you’re booking a room for a frequent guest, you can keep track of whether that guest likes a room with a view of the pool or if that guest likes to be on the bottom floor. You can offer a valuable and memorable customer service before the customer walks into the door.

CRM in the hospitality industry is created specifically to manage the overall comfort of your guest.

Best CRM software

The site Hotel Tech Report says no matter what industry you’re in, there are a few things CRM must always do.

Tracks multiple communication channels

For one thing, it must be able to track communications on a variety of channels. That means it not only knows when a guest receives an email from your company, but it also knows when there’s a text message sent out or a connection in-person and online.

The ability to track all of these communication methods is essential because you want your guests to know that when they talk, you listen.


You must also make sure that there’s a certain amount of automation within the system. Part of the point of CRM software is to make your life easier. It’s not easier if you have to dot every I and cross every T.

Automation should remove those every day, mundane tasks that take up time and could be done by, well, a robot.

Within Your Budget

Do not, under any circumstances hurt your business just to take on CRM software. There are plenty of software options out there, so there’s no reason to put you or your establishment in a financial hole just to get one.

CRM software is something that you need to help your establishment succeed; it should not take anything away from your establishment before it’s even installed.


The private information of your guests should be private. There are very few things that will hurt your business more than losing the trust of your guests. A data breach would lose your guest’s trust.

Take extra care to find a company that is intent on keeping your data secure and if you have doubts, ask questions.


Taking care of your hotel is a 24/7/365 job, but it is impossible to keep your laptop with you throughout. You want to find CRM software that works just as well on your laptop as on your smartphone or tablet.

Just because you’re at the airport waiting for your flight, or enjoying some much needed downtime with the family, doesn’t mean you should be completely cut off. You need to be able to access the CRM software anytime and anywhere and you should not have to sacrifice the functionality or quality of the CRM software to do it.

Why do you need CRM software made specifically for the hospitality industry?

There are dozens of CRM systems on the market and they all do what’s listed above, but very few of them are designed specifically for the hospitality industry. Many of the CRM software companies see hospitality as just one of the many types of sales that need to be managed. As a result, they often lack the sensitivity to bring a rich and rewarding customer experience to every interaction with a customer.

When CRM software is designed specifically for hospitality, it can become a powerful resource that can help you personalize customer interactions whether your guest is inside your establishment or is getting to plan a return trip.

Best hotel CRM software

So what should you look for when searching for CRM software for your establishment?

Is the CRM system designed specifically for the hospitality industry?

As we said before, make sure it’s specifically made for the hospitality industry.

Think of it like this. When you buy a universal charging cord for your iPhone it works and it seems to do what you need for a few months. But later, your phone stops charging and you’re stuck shopping for a new charging cord. Had you bought the Apple specific one in the first place, everything would have worked out just fine.

CRM software that is not specifically designed for the hospitality industry will work just fine. It will do what you need it to do and it will do it well. But it will inevitably stop being as good as it seemed to be initially. It doesn’t hold up. It wasn’t created specifically for your product and therefore, it doesn’t have all the little facets that CRM software designed for the hospitality industry would.

Can the software grow with my business?

There are two things that you want to look for when you’re shopping for software that can grow with your business: is it customizable? Is it extensible?

Customizable CRM software

Customizable means that there should be some flexibility in how the software can be used. You should be able to opt into or out of some features so that you can configure the software to fig your preferences.

You should also be able to reconfigure the appearance of the software so that it fits your work style and preference. Rearranging the windows, setting the color themes to match your corporate colors, and renaming the fields should be fairly easy.

Extensible CRM software

CRM software that is extensible takes things a step further. Extensible means that you can add new features and capabilities to your software as your business needs it.

For example, hospitality CRM software is usually created with several hospitality businesses in mind. If a hotel purchases an extensible software, then a hotel reservations field can be added to the CRM so that it is better formatted to fit the company’s needs. By the same token, if a timeshare firm purchased the software, that field can be edited to handle the needs of a timeshare property.

Can the software integrate with my other systems?

There’s no use in buying software that can’t talk to the other software you already have in place within your business. In tech-speak we call this Enterprise Resource Planning (ERP).

Any CRM software that you buy should be able to integrate with all of the software that you’re already operating within your company.

For example, many restaurants use a Table Management System (such as Open Table) and a Point-of-Sale System. You want to make sure that these systems communicate seamlessly with whatever CRM software you purchase.

Why the hospitality industry needs CRM

By putting CRM at the nexus of their software, hotels, resorts, and management firms can build a rich profile of their guests that can shape every customer interaction. A hotelier can personalize everything from email marketing to reservations to check-in. He or she can create relevant rewards for each guest, enticing the guest to come back again and again.

With the correct software, CRM can become the backbone for departments, influencing everything from group sales and marketing to concierge and housekeeping. CRM can make it that much easier to place personal touches within each room to make the guests feel special.

It can help create the Raving Fan.