Is today’s hotel industry built on data-driven personalization?

Never has hospitality been more competitive; understanding the behavior of guests is now crucial to success.
7 October 2019 | 22 Shares

Great experiences rely on even better insights. Source: Shutterstock

The hotel industry is on track to reach its tenth year of consecutive growth— having surpassed US$800 billion in 2017 in the US— but while that brings immense opportunity for its members, it has never been more competitive.

Customers now have more choice and purchasing power than ever. Consider the roaring rise of Airbnb, wanderlust for new locations inspired by Instagram, and the wealth of choice and information available through comparison sites— it’s no wonder hotel companies are having to work so hard to stay at the top.

Meanwhile, demographic shifts, led by millennials and Gen Z, are bringing new expectations for technology and user experience.

In an industry where members can be made or broken from an online review, and optimal customer experience (CX) has become the reigning benchmark of success, power is now firmly in customers’ hands. And while they may be more fickle than ever, ensuring customers have a great experience is the best way to ensure ongoing loyalty.

More than ever, hotels are making use of the vast amounts of data available to them to streamline operations and personalize to ensure they’re hitting the mark when it comes to customer satisfaction.

Whether it comes from mining reviews sites such as Yelp and TripAdvisor, monitoring social media for likes, dislikes, and trends, good old fashioned surveys, or leveraging loyalty program data to optimize price-value combinations in guest promotions, the insight available to companies is practically unlimited.

“The more sophisticated properties might use keycards to collect data on guest use of amenities and put together packages to appeal to them based on that,” Dr. Anil Kaul, Co-founder, and CEO of Absolutdata, told TechHQ.

“If a guest used an on-site spa, a hotel could put together a spa weekend package to entice that customer to visit again.”

A personalized experience

Some of the largest hotel chains in the world are now incorporating voice assistants, while personalized recommendations for dining and drinking options in the hotel or in the surrounding area could be advertised on-screen. Just look at what Alibaba’s ‘future hotel’ is offering.

But data and AI technology are also transforming the supplier side as well. Personalized property recommendations can pour through a hotel’s online reviews and draw insights based on the nature of reviews services and facilities offered by the business. For example, suggest opening a restaurant later, or offering a healthy breakfast option.

AI bots could even shed light on pricing tactics used by competitors in real-time, such as adjusting pricing by 20 percent ahead of a compression period.

The key to success is to “be able to react quickly” and to improve overall CX, said Kaul, which, more often than not, comes down to providing a tailored experience to each individual guest.

“Data-led personalization is a critical success factor for hospitality companies because guests have a lot of choices,” said Kaul. “If the business doesn’t personalize service and make each guest feel like the property is tailoring service to meet their unique needs, those customers will go to a competitor instead.” And rest assured, if one hotel company isn’t leveraging the data available as well as it could be in order to provide a personalized service to its guests, outside of just sales and marketing, its competitors probably will be.

Acting on insights

But despite “almost all” hospitality businesses applying data in some way, many continue to fall short when it comes to data-led personalization because they’re not using that data to its full potential.

For example, Kaul explained, they’ll conduct market research to answer a business question, and then shelve the information, rather than integrating it into their institutional knowledge and applying it for other purposes.

Another problem is that too many hospitality businesses aren’t acting on data quick enough. To get the most out of data, it has to drive decision-making at the “speed of business” because trends change and preferences evolve day-by-day.

With data use now a differentiator in the hotel industry, Kaul said acquiring as much data as possible is now paramount, in order to more accurately personalize offers and develop better promotions. To overcome the difficulty of acting on that data and becoming overwhelmed by it, AI and machine learning can help process huge datasets and detect patterns that human analysts could easily overlook.

Of course, any doubling down on data collection, processing, storage, and use means hospitality businesses must ensure their cybersecurity defenses and compliancy policies are airtight.

Aside from the infamous Marriott data breach this year, a report by Symantec found that a staggering two of three hotel websites continue to inadvertently leak guests’ booking details.