Leveraging customer equity to create shareholder value

In 1996, Arthur Andersen in conjunction with New York University published its report on a landmark body of research entitled Hospitality 2000. From this global study of the key issues facing the international hospitality industry, a new business model has been constructed. The model uses the results of this global research study as well as financial market research to support a premise that has also been reported on previouslythat is that the successful hospitality organizations of the next millennium will be those that forego the traditional asset focus of the past in favor of an exclusive focus on the customer. The model is designed to create shareholder value in the hospitality industry by leveraging what we have called customer equity.

The original Hospitality 2000 study was inspired by some broad questions:

• who will be the guests of the future?
• how will today's hotel companies adapt to meet the needs of a rapidly changing clientele?
• what role will technology play in enabling the industry to become more customer- focused in a globalizing market?

As in any business, hospitality companies need to have a clear strategy in order to face the future. Supporting this strategy, must be a plan for both organization and capital with support from people, following processes and using technology. Our research clearly confirms actually what many of us already knowthat is that the way to the future and the way to enhancing shareholder value in any business no matter whether it be manufacturing, telecommunications, healthcare or indeed hospitality is through customers. Quite simply, the strategy and the supporting organizational and capital plan in any business and certainly in our industry has to be established with a singular focus on the customer...

To read the complete article, click here to download the printable pdf file (104 kb).

To view more articles, click here.