Professional Documents
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Scandic-Haaga-Helia Research Report
Scandic-Haaga-Helia Research Report
TOBBA 14
Date: 1.12.2015
Wilma Karjalainen
Emilia Keski-Heikkil
Ilona Laine
Kimberly Lindstrm
Milka Mannila
Jasmine Menp
Dariana Oleinik
Melanie Oun
Pieta Salonen
Minta Summanen
Olegs Suarovs
Sofia Vanhatalo
Anna Vlachou
Carl deen
Special thanks to the commissioner for giving us such an exciting and interesting challenge. The
content of the project helped us immensely in understanding the corporate travel market.
Table of contents
1 Methodology .............................................................................................. 1
2 Sales ........................................................................................................... 2
3 Customer Service...................................................................................... 10
4 Market trends .......................................................................................... 14
5 Conclusions and observations .................................................................. 20
1 Methodology
1.1
Task distribution
Fifteen Students took part in the study. The tasks were distributed amongst three teams:
Sales Team - Communication and sales channels, how communication impacts sales, Sales based
on customers year clock, TMCs role in sales
Market Team - Market trends, content marketing, Scandic and Hilton image
Customer Service - Personal Customer Service, customer expectations, automated corporate
agreements, message from corporate customers, customer experience analysis.
1.2
Semi-structured Interview
This method allowed us to get a deeper understanding of the key issues at hand.
This method is especially valid when the research issues are not known, issues, attitudes and motivations need exploration, processes need describing in detail, contamination from other peoples views is to be avoided, complex explanation and understanding is required and an expert or
experienced individuals opinion is needed
1.3
Theoretical support
We have structured our course based on the focus areas provided by Scandic in order to understand these issues fully and apply said knowledge to our research. We have built up a relevant
bibliography to better comprehend the areas of study. During the semester, we visited the headquarters of Amadeus, SMT and the Helsinki Airport to gain a better understanding of some of the
stakeholders in the industry.
Training and testing
We designed workshops to simulate the hotel sales process and customer service. Training for the
interviews took place during two week were we simultaneously tested the interview for length,
structure, flow and the quality of the questions.
2 Sales
2.1
This data collected from this question allowed us to compare the business habits of bigger companies and to smaller companies. As we can see from Figure 1, 48% of the companies we interviewed had 51-500 employees, whilst 16% had 5-50 employees and 36% had more than 500 employees.
48%
1-50 employees
51-500 employees
501+ employees
Figure 1
2.2
The answers varied depending on the size of the company. The lowest amount of organized meetings per year was two, whilst the highest was 150. The average amount was 10. Medium sized
companies have more meetings that require external facilities than larger companies. We believe
this is due to the lack of infrastructure of several medium sized companies that does not allow
them to host large meetings.
Number of employees
10
15
20
25
51-500
Figure 2
501+
30
35
40
2.3
For the companies interviewed, the minimum amount of events per year was one, and the highest amount was 80. The average amount of organized events per year was five. In Figure 3 shows
clearly that larger companies host more events.
Number of employees
51-500
1-50
10
15
20
25
30
35
40
51-500
501+
Figure 3
2.4
What is the average size of a meeting that requires external services? What is the average
size of an event that requires external services?
We determine that size is not necessarily a factor that affects the decision to use external facilities. We learned that the size range for meetings and events, which require external services, is
from five to 180 and from 20 to 300 for events. Due to some of the interviewed companies location and capabilities, it becomes a necessity whereas for other it is a luxury. We determined that
companies with offices in Southern Finland/Capital area make more use of their own facilities.
2.5
Answers varied from 1,000 to 390,000. Many respondents found it difficult to estimate their
budget for meetings and events. In many cases, budgeting for events is done throughout the organization of particular events and the company does not set aside or plan a yearly budget for
events and meetings. Some companies explained that each department within the company organized their own budgets for meetings. Companies that had specific annual events and a more centralized budgeting system were able to provide figures with confidence.
Its more about the target of the meeting and the length that determines its importance. Size is
not a factor.
2.6
The most common time of the year to have meetings and events is fall with 54.2% of responses.
Spring with 37.5% responses was second, and winter with only 8.3% response. The open questions allowed us to determine that spring is the most active season for major events whilst fall is
the most active time of the year for business meetings and negotiations.
Winter
Fall
13
Summer
0
0
10
12
14
Figure 4
2.7
Larger companies do not keep track of their business trip budget for Finland where medium sized
companies do. The average budget for medium-sized companies is 58,000. Most of the large
companies leave tracking of their business trip budget to their TMC's. In most cases, the TMC creates a general report that does not differentiate between local and international travel. 2
2.8
How many employees take part in business trips within Finland per year?
Of the total responses, 33% said 21-75 employees take part in business trips per year, including
overnight stays in hotels. Exactly 29% of the respondents said 5-20 employees and 38% more than
75 employees. There is no clear distinction between large and small companies in this respect. It
depends on the nature of the company and their need to travel.
5-20 employees
21-75 employees
76+ employees
Figure 5
Glaston Oyj was able to provide a specific amount for their local travel at 100,000 per year as
they have a limited amount of employees that travel within Finland. Their international budget
was in the millions.
2
2.9
TMC agreements
25
20
15
10
5
0
No
Meetings
Events
Business Trips
Figure 6
Exactly 20% of respondents do not use a TMC while 80% of respondents use a TMC to arrange
business trips. In addition, 40% uses a TMC to organize meetings and 36% organize events
through their TMC.
TMC's in use
6
5
4
3
2
1
0
Figure 7
10
12
14
Figure 8
10
8
6
4
2
0
Rates
Service
Rates
Service
Security
Processing time
Security
Processing time
Availability
Availability
Figure 9
It is worth mentioning that during a study visit to the SMT offices we learned that, despite event
services being only 10% of the total sales numbers it pulled in almost 50% of their total revenue.
4 During some interviews, the participants would express the importance of security when travelling abroad. They did not think it was of such importance in Finland.
3
10
12
14
16
2.14 How did the companies think the following TMC's were performing in the Finnish market?
Carlson Wagonlit and SMT are the most used TMCs amongst the interviewed companies. Despite
more companies using CWT than SMT we can see that in the participants professional opinion
SMT is gaining market share. SMTs recent expansion has been perceived as move that is gaining
the company market share by professionals in the industry.
Carlson
Wagonlit
Gaining marketshare
Ticketbiz
BCD
Maintaining marketshare
HRG
FCM
Losing marketshare
Figure 11
2.15 Has the development of virtual meetings affected the number of face-to-face meetings?
Companies have changed their meeting behaviour to be more efficient. 5 Only two of the interviewees said they have not changed their communication system as a consequence of virtual
meetings.
Have virtual meetings affected the
number of face-to-face meetings?
23
Yes
No
Figure 12
2.16 What communication tools do you use to buy travel and event services?
Every company that we interviewed has its own tools to buy travel and event services. Automated
portals and emails represent the most used tools. Most participants still rely on the telephone to
reach their account managers at their TMC. SMTs mobile app was described as effective by many
of the participants.
9
15
Automated Portals
Phone
Face to Face
Others
Figure 13
Quoted from an interview: Yes, this happened a long time ago. We started using virtual meetings
10 years ago and there was a drop in face-2-face meetings. We use virtual meetings every single
day.
5
2.17 Describe the buying process in your company for hotel accommodation.
Every company that we interviewed had its own buying process that adjusts to their needs. Most
of the interviewees said that they use different tools during this process. These were the most
used communication tools in order of number of responses: Hotelzon, TMCs online booking tool,
Hansel Agreement, Online travel agency, Hotel Sites, Phone and emails.
2.18 Describe the buying process in your company for meetings and events.
Through this question, we wanted to discover the most followed procedures for booking meeting
and events. Most often by phone, email or a face-to-face appointment. After emailing, companies
tend to make a follow-up phone call to make sure both parties are on the same page. For larger
events of more than 200 people, most companies want to meet face-to-face to discuss what they
want from the venue and hear what the venue has to offer. Most companies contact multiple
venues to get the best offers and then determine which one is best suited for them.
3 Customer Service
3.1
When choosing a hotel for an overnight stay, what is your main priority?
Location is the main priority for 90% of the respondents, followed by price with 57%. Respondents
said they want to stay in a hotel that is near the purpose of their stay, whether it is an event or a
meeting. They also value cost efficiency, and want the hotel to offer business travelers the right
facilities such as free Wi-Fi with a good connection and workspace. Companies prefer to use hotels with which they have agreements. Brand recognition was important according to the respondents, and they value hotels that pay attention to environmental policies and come across as
safe.
Figure 14
3.2
When choosing venue for meetings and events, what is your main priority?
Location and price are the main factors that influence the decision making of a company, followed
by facilities, modern equipment and technology. Entertainment was also mention frequently.
Many of the respondents stressed the importance of catering when organizing events and meetings, and they wanted the location to be easily accessible. They preferred hotels with free parking
and Wi-Fi. Good seating and personalized service were amongst the other criteria mentioned.
Figure 15
10
3.3
Figure 16 shows that 55% of respondents have stayed at Scandic overnight. Of all the respondents, 31% have used meeting and event venues at Scandic, and 4% have used other services such
as restaurants and bar service.
Figure 16
3.4
The overall result was positive. Six of the respondents thought the customer service was very
good, nine thought that it was good and four thought that it was average. Only one respondent
thought that the customer service at Scandic was below average.
Figure 17
11
3.5
86% of the respondents thought Scandic offers appropriate facilities. Just 10% of them said the
facilities were not satisfactory, and 5% did not have any experience using Scandics meeting facilities. Participants specifically mentioned that the infrastructure at Scandic is modern and that
most venues have good locations. Some people that thought that the facilities are old-fashioned
and too traditional. Other participants suggested more locations near airports in Finland would
improve Scandics reach.
Figure 18
.
3.6
Most respondents like to have some degree of personal service. It was stated that human contact
instils more trust. Some arguments in favor of automated processes were that it is easier and
timesaving.
Figure 19
12
3.7
From your experience, what is the process of making an agreement with a hotel in Finland?
Making agreements with hotels in Finland was thought to be an easy and effective process. Respondents emphasized the importance agreements have when negotiating rates. Below are some
of the comments made during the interviews.
When its yearly agreements its face-to-face meetings. I like the breakfast sales pitch offering some hotels do, it is not only a good way to see the services offered but also to network.
It is easier when a sales person comes to the factory. Scandic does this. We usually arrange via a sales person through email.
Making agreements is difficult and challenging, the head of the company makes the deal.
Everything is set and applies to all departments. Once a system is established, the booking
is extremely simple and everything works well.
Negotiating is done with Hansel Agreement, very easy process. Hansel's governmental
agreement offers best rates in Finland.
It is quite easy to get good agreements and negotiate good prices.
All the major hotel chains approach us. There is lots of choice
3.8
Would you prefer automated system or personal approach when dealing with bookings
and the check-in/out process?
Nine respondents prefer automated service; eight prefer a more personal approach. Four respondents describe a balanced system of automated and personal service to be the ideal way of
interacting with hotels.
Figure 20
3.9
Seventeen respondents thought there is no need for further automation of the process. Two respondents from larger companies wished the process was more automated in order to save time.
In the online survey, we also asked the companies about their main priority when booking venue
for meetings and events. Responses included such criteria as high quality, cost efficiency and an
accessible location. Furthermore, great service seemed to be highly appreciated as well as modern and well-equipped facilities.
When we asked how the respondents had experienced corporate self-booking tools, 36% described them as effective. Very effective represented 27% and 18% of the respondents had not
used the self-booking tools at all. Only 9% considered them ineffective due to possible technical
issues that may occur.
13
4 Market trends
4.1
The respondents were asked to rate Finnish hotel chains according to their opinion of the position
of the hotels in the Finnish market. Most of the hotel chains were thought to be maintaining market share. Companies gaining market share included Radisson and Sokos. Overall Scandic was
seen as maintaining their market share. Cumulus and Holiday Inn were perceived as losing the
market share.
15
10
5
0
Scandic
Sokos
Best
Western
Gaining marketshare
Hilton
Maintaining marketshare
Crowne
Plaza
Rantasipi
Losing marketshare
Figure 21
4.2
Scandics performance
The overall opinion about Scandic was positive. The recent brand and hotel renovation was mentioned several times and its reasonable prices and offers. Some negative points mentioned were
lack of visibility, not enough competitiveness a lack of differentiation between Scandic Hotels and
Sokos Hotels.
4.3
Competitiveness
More than half of the respondents (55 %) thought the hotel market in Finland to be competitive
enough. As a follow up question, the respondents were asked to mention any other hotels that
they considered as competitors. The responses included some niche and boutique hotels such as
GLO Hotels, Gustavelund, Haven, Klaus K as well as some independent hotels in Lapland.
45%
Yes
55%
No
Figure 22
14
4.4
Scandics pricing
The respondents were asked to rate Scandics pricing in terms of overnight stays, meeting, and
event facilities. Only 8% of the respondents are unfamiliar with Scandics pricing for overnight
stays. Significantly, 28% of respondents were unfamiliar with Scandics pricing for meetings and
events.
Four percent of respondents rated Scandics pricing as inexpensive for both categories. In total,
56% thought Scandics rates for overnight stays are fairly priced. For meetings and events 52%
considered Scandics prices as fair. 32% of the respondents rated Scandics pricing for overnight
stays as expensive and 16% thought Scandic is expensive in terms of meetings and events.
Figure 23
4.5
The respondents were asked to rate Scandic and several competitors (Best Western, Hilton, Radisson, Holiday Inn, Cumulus, Crowne Plaza, Rantasipi, Sokos) in terms of meetings and event services. Nine out of the total 25 respondents thought Scandics performance in this area is average.
Hilton and Radisson got the highest rating with 20 people ranking Hiltons meetings and event
services as exceptional or good. Radisson got 21 responses for performing exceptionally or well in
this area. Five respondents thought Cumulus is performing poorly when it comes to meetings and
events.
Figure 24
15
The respondents were also asked to give reasons on why they think Scandic and its competitors
are performing as they are. Many out of 24 total respondents value customer service the most.
Other important factors for the respondents are location, facilities, price, services and design.
Figure 25
4.6
Can you mention any innovations from the corporate travel industry / events industry
you have recently seen?
The innovations mentioned by the respondents cover a wide range of topics starting from digitalization. Video conferences seem to be popular amongst the interviewed companies. They say it is
cost-efficient and less time consuming than face-to-face meetings as the need to travel is decreasing. They appreciated having access to internet (WIFI) everywhere and use more mobile apps
(bookings, boarding, check-in/check-out). The participants have also shown an inclination towards
environmentally friendly services. Respondents appreciate how the standard of the hotel rooms
has improved in the past few years (flat screen TV, security, green values). New competitors such
as Uber and Airbnb are entering the corporate travel market.
4.7
What kind of technological solutions for business travel do you expect/would you like to
see in the near future?
Respondents expect to see innovation in mobile apps with an emphasis on online check-in/checkout services. Many participants would also like to have more automated systems to make the
buying process more effective. Electronic sales and marketing will also evolve according to the interviewees. However, despite their interest in digitalization and technology, they still give a lot of
importance of the personal touch and to good customer service as experienced abroad.
16
4.8
What effects have you felt from the trends in virtual meetings compared to face-to-face
meetings?
The following is a selection of the most relevant comments collected for this question.
Positive aspects of virtual meetings perceived:
Meetings are shorter
Skype is used for business
More efficient
Easier to keep track of agenda
Face-to-face meetings increase costs
Someone absent from the meeting can attend through Skype
Negative aspects of virtual meetings perceived by companies:
Technical issues may occur
Better chances of making brand memorable
Shaking someones hand and the physical connection plays an important role
It is harder to concentrate in virtual meetings
Virtual meetings aren't suitable for long meetings
No "small talk" nor networking with video calls.
Face-to-face meetings are more open and friendly.
Companies are going back to face-to-face
No innovation for 10 years in virtual meeting sector
Virtual meetings are not used in all companies
People still need training in virtual meetings.
4.9
Marketing received
The responses show that e-mails and e-mail newsletters are the most common way to receive
marketing from the corporate hotel industry followed by invitations for meetings and events.
Other responses that were mentioned include social media and fairs.
Figure 26
17
Figure 27
18
I even had the Scandic club card. They sent direct marketing, which was not very bad. If you
think, you are going to travel and you get a good offer, such as a double room for 80 , then
you might open the email.
Really good
I don't get any marketing from them. I found out in spring I have an agreement. I have been
with the company for 3 years and they have not approached me with any offers.
I like it very much. They have a very good sales person, who helps me when needed. He is not
too pushy.
Not very exposed, not irritating, I dont know very much what is happening, brand is a bit old,
it hasn't reached me.
I am used to it. I don't pay attention to it
Appropriate, plain business text. Not funny or relaxed.
Not very good. Scandic could be more active. I do not remember seeing lots of marketing.
Comparing to Sokos, they send much more marketing and information about their new hotel
ideas than Scandic
Lots of high-class breakfast and lunch events organized to introduce Scandic to potential clients in Turku.
It is similar to its competitors. It is more hip with a good use of celebrities.
There is not enough marketing, I can't remember the last time seeing anything from Scandic.
It could be more aggressive.
19
20