Geofencing

1. Geofencing in the
Hospitality Industry
William Judge, Rachel Larson,
and Claire Zelenka
University of Wisconsin -
Stout
Hospitality and Tourism
Marketing and Sales
Fall 2012

2. Geofencing in the Industry
Section: 1 Geofencing, what it is.
The practice of geofencing in the hospitality industry has become a very popular and
rewarding trend for both customers and hospitality businesses. Geofencing offers great incentives
which are likely going to increase sales that would not have been originally made. In addition, by
establishing a positive relationship with a customer, that customer is much more likely to return
again due to their pleasant experience. In the hospitality industry, especially in hotels geofencing is
a very popular trend that will continue to grow.
According to the proximus mobility website, this technology can be used in hundreds of
different ways within a single hotel anywhere from alerting guests of lunch specials to providing
coupons to the spa. What this means for hotels is increased foot traffic, improved guest experience,
and most importantly increased customer loyalty and repeat visits. This website also says
geofencing encourages the customer to keep making return visits. It all begins when a customer
opts in on their initial visit. Once they have done so a customer profile can be built so that their
return visits are on a more personalized level. Hotels can even capture information for their loyalty
program or have guests interact with the hotel loyalty app. Imagine a hotel guest returns to the
hotel to see a “Welcome Back” followed by their name sent to their mobile phone. Its 5PM (Happy
Hour) so they are promptly sent a coupon for one free drink at the lounge (Proximusmobility.com).
This source provides an excellent example of how crucial it is for hotels to utilize geofencing with
their customers to the best of their ability. Not only will it make a guest feel special and more
valued, but it will also make the customer happy to purchase more things so the hotel gets an extra
profit as well.
Geofencing can also be a way for an employer to watch an employee’s where about who
travels throughout the day by using technology with a GPS. In such cases this can cause a negative
impact on employees. Historically there have always been employees that have abused their
employers trust and expectations. We have all worked some place where people take advantage
when the boss is not looking. Employers who attempt to police the behaviors of these people are
typically not successful. I believe it is better to create a work environment that inspires and
motivates employees to meet their expectations.
Some employers feel that geofencing with a GPS is not fair because they feel like they
should be trusted. Incentives, compensation, and a wonderful place to work make it less likely to
be taken advantage of as an employer. Often the other workers in a great environment will not
tolerate employees who do not abide by rules and thus are not team players. Such organizations
often have wonderful internal information where employees’ voices are heard and things are
improved. This makes an employee and any organization feel both empowered and valued.
Structure can be a very positive incentive; however, when it is dictated people are more likely to be
upset because they want their voice to be heard.
Overall there are many different kinds of geofencing that can be applied to the hospitality
industry in all kinds of scenarios. Whether it may be in a hotel industry that is marketing them to
increase revenue through this technique, or a way for employers to watch every move of their
employee when he or she is on the road, geofencing is always a reliable source. As long as all the
technology components are working accurately, then geofencing is a prime example of a trend that
is the midst of becoming exceptionally popular.
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3. Geofencing in the Industry
Section 2: Geofencing, Who is using it
Geofencing is not just another mobile phone application, or another site to “Check-in” at. It
is a specific system through the use of GPS capable phones used to attract guests and passersby
into deals, promotions, and information. Instead of a consumer “checking-in” to a specific location,
such as foursquare.com, the consumer is alerted, on their phone, with information and promotions
when they enter a specific geographic location. Geofencing creates a virtual “fence” that targets
specific types of consumers within that “fenced in area”.
This could mean big things for business and consumers alike. Businesses can not only attract
new customers through this technology, but they can also target specific customers. For instance,
say that a business sells moderately priced items for home décor. This business would want to
attract middle class families with moderate income to their establishment. Geofencing allows the
business to market directly to middle class neighborhoods, thereby increasing customers and sales
for their specific business. Consumers are likely to enjoy this new technology because they will be
able to find deals and promotions based on their specific geographical and economic factors.
One company in the hospitality industry that has had major success with this tool is JetBlue
Airways. According to the article entitled, “Where Are You Going and Where Have You Been?” by
Tim Peterson, “To encourage customers to participate, the airline’s agency Mullen executed a
campaign in which travelers automatically received text messages when they entered an airport,
reminding them to check in—a tactic known as geofencing.” This allows customers to receive
incentives and promotions just by walking into the airport. JetBlue Airways has been successful in
gaining customer loyalty and greater customer satisfaction by using geofencing; however, they have
put it aside at the moment and are continuing with their JetBlue Airways Mobile Phone Application.
JetBlue Airways is making a mistake in putting aside the geofencing technology. This technology
could have a huge impact on future customers. If JetBlue Airways sent information and texts to
every person in the airport, instead of just pre-existing customers, they could create many new
customers and continue to grow as an airline company. Their use of geofencing is commendable,
but could also be improved.
Another way that geofencing is being used in the hospitality industry is to attract guests in a
particular area of the country. In Las Vegas, the Wynn Las Vegas hotel installed Samsung Galaxy
tablets in 1,000 Las Vegas taxi cabs. Using GPS technology and geofencing, these tablets are
updated with information about attractions, the Wynn Las Vegas hotel, and shopping and nightlife
hot spots around the city. As the taxi enters certain geographical areas, the advertisements and
information are sent to the tablet so that customers can see what the city has to offer. In the article
entitled, “Wynn Las Vegas taps Mobile for Geo-Targeted Ads in Taxis”, Chantal Tode states “The
campaign gives Wynn an opportunity to communicate directly with visitors based on their location
in Las Vegas while offering a fun, interactive way for travelers to plan their activities. The goal is to
entertain and engage passengers while also showcasing the hotel.” By using the geofencing
technology, the Wynn Las Vegas has been able to market their hotel, as well as Las Vegas as a
whole. The Wynn Las Vegas does an exceptional job at marketing their hotel through this tool, but it
might work better if the information was more widespread. Instead of just offering the tablets and
information to the taxi cab customers, they could send it directly to GPS capable phones within the
Las Vegas area. This could increase customer volume and potentially help the already existing
businesses in the area.
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4. Geofencing in the Industry
Geofencing is definitely shaping the hospitality industry. By allowing hotels to market in
specific geographical locations and providing incentives and promotions for hospitality businesses,
the industry can grow and continue to change with the ever-changing technological world. Other
industries that can be affected by geofencing include the clothing retail industry and the grocery
industry. The clothing chain Maurice’s has recently started using geofencing, “The women's clothing
chain last month started sending promotions to the phones of people who come within a few
hundred yards of its stores. Consumers who opt in to the service are sent messages about in-store
sales.” (Bustillo & Mattioli). Geofencing allows the clothing store to send sales promotions to every
person that passes by without a mobile application or subscription. This can encourage new
customers as well as entice existing customers to spend more money.
Meijer, the successful Midwest grocery store, has also started using geofencing. “Meijer
Inc.,… now uses sensors in its stores to offer customized information and virtual coupons via mobile
phone.” (Bustillo & Mattioli). Meijer has been able to send coupons and promotions to the
customers that enter their store. Just like Maurice’s, the coupons are sent without a mobile
application or subscription. This technology can greatly increase customers and overall satisfaction
with the stores, as well as loyalty and higher profit.
Geofencing is a trend that is not going away any time soon. The overall benefit of the
technology has not yet been decided, but as more and more businesses begin to use it, it looks to
be positive. As the technology becomes more sophisticated, we will be able to see a greater
demand and use for geofencing.
Section 3: Geofencing, Expert opinion
Evelyn Nyberg is the Operations/Programming Director at Faiths Lodge. Faiths Lodge is a
facility that allows families with terminally ill children or has lost a child a place to stay and bond
with other families experiencing the same things. Evelyn handles all applications and confirms
them, she sets up programs for her guests, handles all guest stays, makes sure the grounds and the
building is taken care of, and hires all staff. Evelyn is also a Stout Alumni and a very close family
friend. Evelyn was also the General Manager at The Lodge at Crooked Lake in Siren Wisconsin for
around 10 years. Evelyn has been in the industry for a very long time. Although Faiths Lodge does
not use this type of marketing, she was willing to share her educated and professional opinion on
geofencing.
When I asked Evelyn what she thought of geofencing she was excited about it. A woman of
her age with a smartphone, who still doesn’t know how to use all of the features on it, was very
excited about the possibilities that geofencing can bring to any business. Evelyn was also thrilled to
hear about the gamification and geotargeting , she said that is a struggle to capture the consumer’s
attention and attract the kind of consumer that will receive the most enjoyment from the product
or service that a business is selling. She thinks this will definitely capture the attention of the
younger markets. When I asked Evelyn what she thought the future of geofencing would look like
she replied with “it could be anything, the pace of change with this technology is so fast that it
could be incredibly different in 10 years. I asked Evelyn what she thought the business landscape
would look like; she replied with, we will probably see businesses spending more time and money
on mobile advertising as more people start using smartphones. She explained that with a mobile
oriented world approaching that geofencing will become one of the most important advertising
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5. Geofencing in the Industry
tools for businesses to use. When I asked Evelyn what she thought businesses would need to do to
stay competitive, she said that businesses were going to need to stay knowledgeable and up to date
about geofencing and the technology, because it is so powerful and to continue to learn about their
customers wants and needs. Listening to what the customers are wanting is critical in selling a
service or product. Overall Evelyn felt that geofencing is a great technology and play a huge role in
the hospitality industry.
Geofencing will drastically change the business landscape. With a mobile only world on the
way, geofencing will become one of the most popular tools for marketing in the hospitality industry.
It will go beyond the limits of Foursquare and “check-ins”. The future of geofencing will be more
about the information that people can access than to identify their location and let the rest of the
world know where they are at that very moment. According to Michael Kasavanas article titled My
Location is Highly Desirable, Reaching Your Guest Where They Are, Forrester Research has
prediction that by 2015 over 82 million people will rely on mobile devices as a primary reference
tool. Their research also showed that through their mobile devices people will be able to receive
announcements, alerts, promotions, discounts, and location- relevant offerings, and access their
purchasing history, and loyalty rewards status. Research found by Gartner suggests that the total
revenue attributed from LBS and geofencing was around 486 million and in 2014 receiving revenue
around 13 billion from LBS applications. The article also suggested that geofencing will benefit not
only the consumers but the businesses as well. Not only will geofencing help the guest find a place
to eat or stay, but the business will be able to see where all of their guests are hanging out and
what interests them. This knowledge will help business make repeat guests.(Kasavana, 2012) The
business landscape will look different because the consumer will find themselves in the middle of
an advertising wars everywhere they go with their smartphones. Questions about people’s personal
and private information being safe with this type of technology will arise. Not only will the
businesses need to answer those questions and make their guests feel safe and protected, but the
cellphone companies will have to answer as well.
Geofencing will change many times as it becomes more popular. Geofencing which used to
be called geolocation during its infancy has already changed once before. Geofencing is currently
under development right now, working towards a better technology that will make it easier for
businesses to reach their target markets. Geotargeting, will ensure that a business’s message is sent
to their target markets and are not bothering consumers who have no interest in that businesses
product. Gamification as Kasavanas calls it is also something under development and is being added
to geofencing idea. Gamification is using game like tactics or strategies to enhance the customers
experience, loyalty, and repeat business. Kasavanas articled suggests that there are a few software
design firms focused on adding gamification features into products and services offered in the
hospitality industry. A game like cooking mama or something along those lines, so that when a
consumer plays they win a free meal at a restaurant or a free drink at a bar, is a perfect example of
what gamification does. It could also be as simple as a word search or Sudoku, anything that will
engage the customers, and reward them. It is safe to conclude with these two examples that
geofencing will go through many changes and that it will look and be used very differently in the
coming years.
In order to stay competitive business are going to need to continue to listen to their
customers wants.Businesses want to be sure that they do not put their consumers in the middle of
an advertising war every time they walk down Main Street. Receiving a message from a business
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6. Geofencing in the Industry
every time they walk by it will become annoying and might ruin how the customer feels about that
business. Remembering that geofencing is not about the check ins, and that it is about reaching the
customer at the right time and place will be key to staying competitive. Realizing that peoples
security is important to them and being sensitive to that will be key, once geofencing becomes
better known. (Kasavana,2012) Continuing to update technology and keeping up with what the
consumer is doing is going to be the best way for a business to stay ahead and keep their
competitive edge.
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7. Geofencing in the Industry
Bibliography
Bustillo, D. M. (2012, 3 8). Can Texting Save Stores "Geofencing Lets Retailers Offer Deals to Nearby
Customers, Fight Price- Shopping. Retrieved 11 10, 2012, from The Wall Street Jounal :
http://www.hospitalityupgrade.com/_magazine/magazine_Detail-ID-712.asp
Ksavana, M. (2012, 3 1). My Location is Highly Desirable, Reaching Your Customers Where They Are .
Retrieved 11 13, 2012, from Hospitality Upgrade:
http://www.hospitalityupgrade.com/_magazine/magazine_Detail-ID-712.asp
Nyberg, E. (2012, 11 10). Operations Manager. (R. Larson, Interviewer)
Peterson, T. (2012, 2 13). Where Are You, Where Have You Been? Retrieved 11 10, 2012, from ADWEEK:
http://www.adweek.com/news/technology/where-are-you-going-where-have-you-been-
138178?page=2
Shneider, A. S. (n.d.). Look for the Future of Location- Based Marketing. Retrieved 11 12, 2012, from
Dummies.com: http://www.dummies.com/how-to/content/look-to-the-future-of-
locationbased-marketing.html
Tode, Chantal. (14 November 2012). “Wynn Las Vegas Taps Mobile for Geo-Targeted Ads in Taxis”.
Mobile Marketer. Retrieved from
http://www.mobilemarketer.com/cms/news/advertising/12399.html.
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