Hospitality is becoming an intensely loyalty-driven industry. To remain competitive, hosts are constantly optimizing the customer experience to produce return business. This has traditionally meant finding new ways to delight guests and offer top-tier service. However, efforts like these remain limited by the boundaries of scale that restrict any high-touch industry. Recent developments in big data technology have triggered a shift in thinking.
The booming tech sector has made it much easier for hotels to collect massive amounts of behavioral and monetary data. When aggregated and farmed for insights, this new technology helps hotels achieve new levels of personalized care. While perhaps later to adopt than most, the hospitality industry as a whole has started waking up to the opportunities afforded them by data-fueled business intelligence. As best-practices continue to emerge, guests and hotel managers are reaping equal benefits thanks to the solutions made possible by these powerful new technologies.
#1 Better VIP Customer Relationships
Hospitality professionals depend on high-value client segments for a material percentage of their revenue. These are guests that take advantage of the most expensive accommodations and/or stay with the same chain as many as 20 times per year. Big data technologies have streamlined the process of identifying and delighting more of these customers. Casey Ueberroth, senior vice president for marketing at Preferred Hotel Group has cited figures as high as 60% of revenue being driven by 10% of their total customer base.
“The loyal, engaged guest is driving large amounts of revenue,” says Ueberroth. “If you take care of that guest, he keeps coming back.” Persistent user-level data storage has made that possible. Ueberroth explains how Preferred Hotel Group was able to surprise one guest for their 25th and 60th stays: “…here’s a facial or a spa pedicure,” the guest recalls being told. “Sometimes they’ll let me choose what I want. You could never get that kind of attention anywhere else.” It’s this intersection of data and personal connection that Ueberroth says drives customer loyalty for modern hotel chains.
#2 Streamlined Feedback
Advanced text analytics are empowering hotel owners to automate the collection of review-based customer insights. Though efficient aggregation practices have been in place for some time, only recently have hotels begun automating analysis and insight gathering. A study from the Cornell School of Hotel Administration leveraged “automated text-mining analyses” to process 18,106 pieces of terminology relating to varying aspects of customer experiences.
Among the conclusions drawn was the fact that “ratings sank when guests wrote lengthy reviews that focused tightly on a limited number of hotel attributes, while relatively briefer reviews that took a wider view of the hotel generally had higher ratings.” After a comprehensive review of their findings, the study’s authors concluded that “text analytics can point to specific steps managers can take to improve guests’ assessments and their hotels’ ratings.”
#3 Predicting Customer Needs
Knowing what guests want before they want it is no mean feat, but big data has made it a reality. Boutique hotel owner Denihan Hospitality uses aggregated customer data to generate behavioral archetypes that allow staff to anticipate customer needs. In his report in Forbes magazine, contributor Bernard Marr explains how, “The chain even went as far as putting analytics in the hands of the frontline hotel staff, who were armed with dashboards on their smartphones enabling them to anticipate what a particular guest might expect or desire from their stay…
Housekeeping staff receive real-time updates on whether customers in a particular room require an extra pillow or are likely to call room service for a sandwich and a coffee at 2am.“ This unprecedented level of foresight allowed Denihan Hospitality to foster deeper connections with its customers and solidify long term commercial relationships.
#4 Personalized Marketing
Data-driven platforms also let hotels ensure customers are met with timely and topical marketing campaigns. Branded hotel chain OYO has found success doing just that. The Indian hotel firm began by developing detailed customer profiles and actionable segments. A system of behavioral triggers was designed to respond to guest behavior and delivered personalized recommendations according to engagement and purchase history. Finally, OYO deployed campaigns that delivered the right message to the right users at the right time. The result was a 500% lift in bookings through its mobile and email channels.
#5 Revenue Forecasting
Big data has also helped evaluate its own effectiveness. Comprehensive BI systems allow hotel chain managers to aggregate vast sums of revenue data just as easily as they would behavioral measurements. Sophisticated predictive algorithms can then leverage this information to better forecast future earnings for the benefit of hotel executives. “Regardless of whether a (hotel) relies on moving average or time series forecasting algorithms, data mining can improve the statistical reliability of forecast modeling,” says Goran Dragosavac of SAS. With a better view of their financial future, hotels are free to take on greater risk in developing service initiatives that prioritize customer experience.
While it shows no signs of getting any less competitive, the traditional hospitality industry has made immense strides in customer marketing over the last few years. The advanced analysis and insights provided by big data technologies have allowed them to remain at par with the rising service expectations of modern customers. Whether or not they’ll be able to remain relevant as tech-first solutions like AirBnB continue to capture market share, adopting tools that made their competition so successful has ensured they’ll at least have a fighting chance.