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Why Big Data presents big opportunities for hoteliers today

APAC, IDeaS Revenue Solutions MD, Jurgen Ortelee on what data is really most relevant for hoteliers?

The volume of structured data being generated today is growing at an exponential rate. The reality for hoteliers and their revenue management teams is there are far too many data points to analyse. And certainly, too many decisions to be made for any human to undertake accurately, without the assistance of automated solutions.

What data is important to hoteliers today?

The data sources that support hotel pricing decisions commonly include stay history, inventory history, future reservations, future inventory, competitor pricing and future rate information.

However, while it was once assumed that more data leads to more informed decision-making, the focus is now on ensuring the right data is collected in the first place.

But what type of data is considered quality data for a hotel? In many cases, much of the “big data” that will help a hotel make more informed pricing decisions is demand associated data; that is, data that is used in the creation and curation of accurate demand forecasts.

Predictive modelling and forecast data remain essential for hoteliers planning for the future. It is important to note though, that it is not just about having access to more data in these circumstances but looking at the right data.

Not all data is created equal and only the relevant information should be considered. To build an accurate vision for the future, hotels must gather macro-level intelligence such as border and travel restriction policies and how they impact on market trends and travel intent, along with generating granular-level data, focusing on the transaction level, aggregating, and benchmarking rate category, channel, cost of acquisition, arrival and departure dates, lead time, length of stay, loyalty contribution, even at the individual travel agency or corporate account level.

Use data to personalise the customer journey

It is a hotelier’s role to understand the demand drivers of the traveller so they can proactively influence demand throughout the customer journey. This begins at the dreaming stage. Research has shown that 60 percent of travellers feel brands should tailor their information based on personal preferences or past behaviours right from the beginning.

In order to better understand guest desires, the ability to build an accurate picture of their behaviour based on data is key.

Data from booking channels, room-type preferences, dining choices, spa bookings and loyalty programs can help hoteliers better understand their guests so that more tailored packages can be developed that inspire return business.

Some hotel and resort owners are even using wearable technology today to provide added convenience to guests and collect valuable data.

For instance, Disney provides an all-in-one wearable device on a colourful wristband. This wristband syncs with the traveller’s hotel room key, Fastpass, and even their park tickets. It also allows the customer to charge food and merchandise to their hotel room, alleviating the need for the customer to bring a wallet while on property.

For guests, wearable devices provide access an extra level of convenience. But for the hotelier it provides a wealth of digital information on customer preferences that allows them to target customer needs, wants and desires in future encounters. It is not surprising to learn 78 percent of travellers are more loyal to a travel company that personalises their experiences online and offline.

The need to automate

With or without the pandemic, a hotel revenue manager is responsible for pricing a room, or service, that will attract a guest to make a transaction, resulting in the most overall revenue and profitability. But to operate profitably, hotels need to accurately price a multitude of different rooms, through many different channels, across many different days, to many different types of guests.

Compounding the challenges around hotel pricing today is that the sheer volume of structured data being generated is overwhelming, especially when considering that a typical hotel makes roughly five million pricing decisions every year.

Put simply, hoteliers and their management teams must process far too many data points to analyse in real time. There are simply too many decisions to be made for any human to undertake this task accurately without the assistance of automated solutions.

Turning data into revenue

As hotel management roles are consolidated and responsibilities expanded, many hoteliers are taking a ‘cluster’ approach to revenue management. With a cluster approach, hotel revenue managers are no longer responsible for a single property or a handful of properties within a hotel group.

They are now responsible for a cluster of properties determined by location or brand and are expected to make strategic revenue decisions for up to a dozen, or more, hotels every day. This expansion of responsibilities means that revenue managers are shared between properties and have real limitations on the time and task allocations they can provide to any single property, so having automated technologies powered by high-quality data is critical.

In this environment, advanced analytics and real-time visualisation of clean data is needed. Any hotelier working without the support of an analytical revenue management system will find themselves overwhelmed by the complexity of the data. Forward-looking predictive analytics, embedded in today’s advanced revenue management systems, help hoteliers uncover emerging trends and identify opportunities to capture more revenue.

Advanced hotel revenue management analytics use data mining, machine learning and a variable deployment of complex predictive algorithms sets to calculate optimal pricing and inventory decisions for hotels. Analytics assist hoteliers to move beyond their normal room pricing processes into harnessing their data and forecasting capabilities to explore, predict and optimise the revenue performance of their entire property.

Best in class revenue management system analytics also enable hoteliers to uncover granular patterns and trends at a micro-level. By determining why specific results are emerging, and if a hotel can expect them to continue, hoteliers can then optimise their revenue opportunities today and into the future, speeding business recovery from the pandemic.

Author Bio

Jurgen Ortelee, BHA, MBA, APAC, IDeaS Revenue Solutions MD

Revenue Management & Strategy | Advising hotels, resorts & holiday parks on increasing revenues with advanced analytics.

 

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