Unlocking the Value of Customer Data in the Hotel Industry.
Hoteliers know what drives revenue in their business. Direct bookings, room upgrades, and loyalty from returning guests are the gold standards for driving up margins.
What’s less easy to understand is precisely why guests choose to book direct or upgrade a room. For example, 73% of guests say they’d be prepared to pay up to 30% more for a room upgrade if personal touches were included. But what should those personal touches be?
To know that, you have to know what every guest wants.
Knowing your guests well enough to make personalised upgrade offers or understand what is likely to encourage them to book direct is made all the more difficult because hoteliers operate in such a competitive environment, one where ‘owning’ the customer data is fiercely fought over.
It’s the nature of the modern travel industry that operators have to rely on perhaps dozens of booking platforms, travel agents and package holiday operators to drive business, especially when their audience is global. But that leads to a very fragmented data environment, with lots of parties slugging it out for control.
So what can hotel operators do to improve customer data visibility in a way that supports those all-important revenue drivers?
From Unify…
The first step is to build a unified data strategy which integrates data from all channels into a single view of the customer journey. This means consolidating data streams from booking platforms, travel agents and operators, your own branded channels and on-property systems. By gathering as much customer data as possible in one place, hoteliers create a resource from which they can build a clear understanding of their guests and their behaviors. But that level of analysis is the challenging (and clever!) part.
To AI…
For this, hotel operators need to turn to AI. AI is brilliant at noticing patterns in unstructured and fragmented data sets. It’s so good at it, in fact, that it’s even able to fill in gaps in datasets to build a more complete picture based on probability.
This is important because the mechanics of why someone makes one decision over another are incredibly complicated. Ultimately, it boils down to cognitive science, the biases and assumptions people carry around with them, and how that influences what they choose. Are they more motivated by a juicy discount, by a list of free add-ons thrown in, by beautiful imagery of the hotel and its surrounding area, or by guest reviews? It’s probably all of these things, to varying degrees, for every guest.
Data about the channels guests use, purchases made, options chosen and whatever else you can gather from booking and transaction history doesn’t come close to giving up these details. But by looking at all of this data across an entire cohort and looking at the patterns, AI fills in the blanks. It can predict what kind of motivation each guest might need to book direct, and what kind of marketing activity will hit home. It can tell you how to frame an upgrade offer.
Given how variable prices are in the travel industry, another strength is the fact that AI can also run complex modelling to assess the likely impact of pricing changes and promotions, taking into account competitor activity, too. This kind of dynamic pricing approach can help operators optimise pricing strategy for the best possible balance of bookings and margins.
Via the Edge!
One final consideration is how and where all of this data is used. A lot of the conversations around this kind of AI-driven optimisation work focus on what happens online. But that’s not the only place where highly sophisticated guest insights are useful. Consider the situation of a guest arriving to check in and asking about upgrade options. What price should the reception clerk quote? What room should they offer? What personalised selling points should they include?
To get the most out of available customer data, these insights should be available to the people who interact with guests daily and ultimately make the biggest difference to the quality of the guest experience. This means embedding AI into your on-site operations, too, both in individual hotels and connecting systems across a chain.
AI-ready intelligent POS systems provide a useful hub for routing all customer data through, from all on and offline channels. In addition to this, you should consider the potential benefits of edge AI solutions which allow models to run on-premise, with faster processing and closer-to-real-time analysis compared to cloud-based AI tools. When responding to a customer query in person, every split second can count.