The Hospitality Industry Needs a Data-Driven Approach to Optimize Efficiency
With the summer in full swing, the hospitality industry has prepared for a surge of guests. Yet the industry is still facing the challenges of labor shortages, COVID-19, flight delays and cancellations. Being able to effectively service guests, while dealing with roadblocks and unprecedented challenges, means taking a data-driven approach.
Utilizing data to make strategic decisions can help those in the hospitality industry improve operational efficiency, boost customer experience, revenue management, and reach target customers. Unsure where to start? Here’s how.
Upgrade Your Customer Experience
With travel on the uptick, the hospitality industry needs to have a plan to engage customers in a meaningful way. The industry is known for giving great experiences to their best customers, but they often know little about them as individuals. In order to have a customer-centric approach, businesses must utilize the data available to them.
By enriching their customer database (CRM) with additional information on their customers, businesses can provide a personalized guest experience. For example, if a hotel provides gifts to guests at check in, they could offer a standard gift to everyone. Or, if they enrich their CRM with third party data on guests to better understand their likes and dislikes, the hotel can then give them something that they’re interested in, from a bottle of wine to exercise equipment. Not only is this a nice surprise for the guest, but it helps build brand loyalty and a repeat customer.
Manage Revenue Smarter
Another key way that the hospitality industry can take advantage of a data-driven approach is for revenue management. Hotels in particular have a significant amount of data on their own. For example, every room under management, whether it was vacant or filled on any given night, what price it was booked at, and the length of a reservation, are all held in a hotel’s database.
This wealth of first-party data enables hotels to build their own predictive models to determine how to best price rooms to maximize revenue across inventory. However, these models could be made significantly stronger if they were enriched with non-endemic data. For example, being able to gain insights into when there are conferences or events in town, macroeconomic trends, or any other outside forces that would impact bookings, would greatly improve the model. Ultimately, anything that impacts price elasticity impacts the ability to make the most money. By using first-party data as the basis for a robust machine learning model, but enriching that with external data, will help external factors inform pricing decisions, and a business’s bottom line.
Reach Your Target Audience
Lastly, location data can help those in the industry reach their target customers. Location data is geographical information on a specific device’s whereabouts associated with a time identifier. This type of data can be an effective way to understand potential customers’ daily routines and behavior, providing insights into where they live, work, and travel.
For marketing, if a hotel brand is looking for customers who travel often, geolocation data can help determine who is going to the airport frequently or who’s outside of their home region. This enables them to run targeted advertisements at airports, or on airline websites, to reach these travelers. Additionally, businesses can focus their marketing efforts on these target consumers rather than loyal customers, so that they aren’t reaching out to customers needlessly.
For travelers who are getting back out there, it’s important that the hospitality industry provides them with a safe and memorable experience. Data can help businesses and customers alike, by empowering businesses to provide an exemplary customer experience, reach the right customers, and price their rooms effectively.
ABOUT THE AUTHOR
Nick Jordan is the CEO and Founder of Narrative. He has spent his career at technology-driven companies like Adobe, Tapad, and Yahoo!. Prior to Narrative, Nick was the SVP, Product + Strategy at Tapad where he helped evolve the company from a media business into a data and technology licensing business. Tapad was acquired by Telenor for $360M in 2016. Before joining Tapad, Nick ran Product Management at Demdex, the industry’s first data management platform (DMP). Demdex was acquired by Adobe in 2011 and today as Audience Manager powers Adobe’s audience activation strategy. Prior to Demdex, Nick was a Sr. Director at Yahoo!, running pricing and yield management for newly acquired assets like Right Media.