How Big Data is changing the Game for Hotels — And Their Guests

By: Anil Kaul, CEO, Absolutdata Analytics

To succeed in a competitive industry, travel and hospitality companies must create memorable experiences for their guests. For hotels, this ability is absolutely essential to achieve a winning edge. After all, in many cases, a competitor is just across the street. It’s not good enough to be “good enough” — to flourish, a hotel must be great.

To complicate matters, we’ve now entered the age of hyper-personalization. Customers expect companies to do more than just cater to their needs;they expect their needs to be anticipated. To meet this challenge — and to optimally price and manage their hotels — many lodging chains have turned (or are in the process of turning) to data analytics.

Big Data analytics and the travel industry are natural partners. Travelers generate enormous amounts of data during their stays and at other times (booking, researching, social media, etc.). Hotel companies can use this data to personalize every experience they offer their guests, from suggesting local restaurants to finding an irresistible price point. They can also use this flood of data to fine-tune their own operations.

How Big Data Works for Hotel Customers

Let’s honor the business maxim of “customers first” and consider how Big Data is changing things from the customer’s perspective.The use of mobile apps is the most obvious change.Apps are convenient for the customer since they make finding and booking a hotel room easy. Apps can also be used to compare prices and incentives. So, mobile is an important part of the customer satisfaction experience.

Data has also enhanced the customer experience by giving hotels information that allows them to pay attention to details in the hotel itself. Consider this example from an article on Forbes.com: One hotel chain has used Big Data analytics to rearrange rooms for either business or leisure travelers. Each segment has different needs and expectations about their stay, so why not match the rooms to those needs? The same chain also tries to match roomier bathrooms and in-suite kitchenettes with families or other guests who would appreciate the added flexibility.

Big Data Made Simple offers another scenario: A hotel with several in-house dining options can analyze the customer’s data trail to enable front desk personnel to recommend the right restaurant or even help the customer get a reservation at an offsite restaurant. That kind of personalized service is a win for everyone involved.

How Big Data Works for Hotel Companies

At first, hotel companies didn’t really know how to make use of the loads of incoming data they were receiving. Now, a powerful combination of mobile technology and Big Data analytics are making operations much more efficient. With the help of user-friendly dashboards, front desk personnel can provide a customized experience and specific recommendations to customers as they check in, leveraging in-house and social media data to give employees better insight into what customers want. Smartphone-carrying maintenance employees can be alerted to customer needs right away. On a person-to-person level, Big Data can make a big impact.

Big Data can also make a sizeable impression on the big picture. When the hotel isn’t running at full capacity, information gleaned from data analytics can be used to cut back on utilities. Weather and local events can be factored in: If a special conference is on the way, room rates can be bumped up, as this Datafloq post reports. Adding in personalized touches, based on the guests’ preferences, can help hotels keep their customers happy.

Data analytics can also help hotels make decisions about the lifetime value of a customer. Who will generate more revenue, someone on a once-in-a-lifetime dream vacation, or a no-frills account exec on a business trip that reoccurs every quarter? The account exec — make him happy, and he’ll return at least four times every year. Conversely, a hotel may never see the spend-happy vacationer again. Certainly, hotel personnel want both customers to be satisfied. But they’ll go the extra mile for the repeat visitor. Big Data can help them determine just what will convert a one-time customer to a repeat.

Big Data might still be in the adoption phase for the hotel industry, but it has a lot of benefits to offer. It can help companies personalize promotional campaigns for their customers, price their rooms appropriately, and avoid losing money through over- or under-booking their property. For customers, it can help them have an even better and more personal experience every time they stay. The data is there; it just needs to be put to work. Hotels that fully leverage it will gain a significant competitive edge.