Blogs

Innovative hospitality: 3 ways to use data-driven guest personalization to increase revenue

Technical Writer

The hospitality industry has begun using big data insights to create innovative offers and personalized service. Obtaining consumer data alone will not help a hotel see results; the data must be used strategically to create a personalized, innovative hospitality experience. Personalization is a strategy that's evolving beyond a short-term trend and into an established marketing approach, according to Gartner.

While many hotels use data, only a handful maximize its potential. According to a 2015 Hospitality Technology Magazine study, 31 percent of operators said their hotel had a moderately mature big data strategy and 9 percent of the hotels said their big data usage was at a high maturity level. In 2014, no hotels surveyed said that they used big data at a high maturity level.

Here are the top three ways that hotels can use data:

https://kapost-files-prod.s3.amazonaws.com/uploads/direct/1453730320-45-9120/hotel-blog.jpgUsing data to find the right promotion

Filling empty hotel rooms without cutting rates too deeply is a constant challenge for hotels. By using insights from data, hotels can now gain insight into where to draw the line. The Wall Street Journal reported earlier this year that Starwood is using data analytics to predict the right price and incentive to prompt an individual guest to book the property they are considering. By using a variety of data, such as customer information, weather predictions and property data, hotel companies can predict what price to offer and how long to run the promotion.

Even more importantly, the hotel can use data about the property and the customer to predict which amenities and services will be of most interest to guests, then highlight these amenities in the offer or upon check-in. Because testing and revising offers based on real-time data is an important part of data analytics, Starwood continually evaluates options to create the most appealing deal for each customer segment. After implementing these measures, Starwood's revenue per available room rose 4.4 percent.

Using data to find the right upsell

It's not just filling rooms that's important to a hotel's bottom line. The hotel must also fill the restaurants, the spa and any other premium services it offers. In the past, hotel staff would be trained to offer upsells based on a "promotion of the month" or a similar broad marketing effort. That approach missed an important component: what would be most appealing to the guest.

Hyatt hotels used data analytics to increase post-reservation incremental room revenue by 60 percent from 2013 to 2014, according to Tnooz. Hyatt properties use this strategy to provide insight to front desk agents about which specific upgrades or services might be attractive to a specific guest. Because of the success of the program, Hyatt is rolling out this use of data analytics to transaction screens and confirmation emails as well.

Using data to anticipate guests' needs

When traveling, consumers want to have their needs met. Big data analytics gives hotels an advantage by providing tools to anticipate guests' needs.

"Big data has the potential to give customers a personalized travel experience every time," notes Analytics India Magazine. The publication suggests using big data to customize menu selections based on a guest's known dietary issues, as well as knowing exactly what type of beer or shampoo to stock to satisfy the preferences of a target consumer. Hotels can take this concept a step further by ordering food and supplies based on the data collected and customer preferences of the guests arriving in the near future.

Data isn't something that can instantly produce magical results. It's a tool and a resource. Nothing will happen if the data languishes on a server, but when properly analyzed and applied, the results can be magical. It's up to each hotel to take data and use it to create an innovative hospitality experience that will wow their guests.

Learn more about IBM solutions for Travel and Transportation.