How Hospitality Data Insights Can Help You
Hospitality data insights probably aren’t at the top of many priority lists for anyone but the largest enterprises in the industry, but perhaps they should be.
Data analytics and insights are things we would usually associate with other markets, notably manufacturing, for which SMBs are embracing new technologies for their factories in greater numbers than ever.
Healthcare is another obvious example where the use of data is very rapidly changing approaches and outcomes in the industry.
Business leaders and decision makers in other industries would be forgiven for assuming that the digital transformation boom we’re currently seeing across the country (and world) is mostly confined to a select few industries.
After all, we’ve grown accustomed to seeing news headlines talking about walking, talking robots and the threat of advanced robotics in factories taking away people’s jobs.
The reality, however, is that the use of advanced technology is far more likely to be software-based, and uses are far more universal in terms of their applicability.
Virtually every industry is benefitting in one way or another with the use of data insights, and hospitality is no exception—simply put, if you’ve got data to work with you can use analytics, and organizations in 2020 have an abundance of data.
Today, we’ll be taking a look at how hospitality data insights can help a business grow.
Big Data in Hospitality
For those who aren’t in the know, big data is a term which refers to the large amount of structured and unstructured data that resides within businesses today.
And by “large”, we mean incomprehensibly large compared to even just a few short years ago.
In 2020, 2.5 exabytes are created each day—that’s the equivalent of 1 billion gigabytes.
What this means for businesses is they are sitting on a veritable mountain of data, and while it’s hard to wrap your head around these numbers, the bottom line is this; data is ubiquitous and an extremely valuable resource.
The problem is that organizations often find themselves at a loss as to how to utilize their data.
Forrester reports that between 60% and 73% of all data within an enterprise goes unused for analytics.
So, the question for those in the hospitality business is: how can I use my big data, and what can I use it for?
Applications of Big Data in Hospitality
One of the biggest uses of data in hospitality is the aggregating of customer data to spot trends and preferences, and then using those insights to better serve the customer base.
Hospitality is a largely homogenous industry in what they offer, with business owners establishing their competitiveness through their individuality.
This means offering customers a more personalized experience than has previously been possible, and that’s where data insights come in.
Analyzing big data sets can encompass virtually any aspect of a visit, from a customer’s dietary preferences, the room they like best, and even local events that are occurring.
Let’s say, for example, that a large conference is taking place near a hotel, and that hotel knows that businesspeople are more likely to use the onsite restaurant than other customers—they can use that information to keep the bar and restaurant open longer on certain days and generate more revenue.
Of course, one of the most widespread applications of hospitality data insights is in marketing.
Just as personalization is important in the day-to-day operations of any hospitality establishment, it’s also important for marketing the business to new or repeat customers.
Big data insights allow for businesses to target customers on a micro-scale. For example, perhaps your insights have recognized that particular customers enjoyed eating in during their stay—you can now use that information to target these customers with incentives and offers relating to the restaurant to bring them back.
These insights extend to several other preferences, and will additionally give you a greater understanding of when to target these customers for maximum effect.
This is exactly the approach that industry leaders such as Mariott have taken in recent years. As the proliferation of data within hospitality companies of smaller sizes continues and is used more effectively by SMBs, it’ll become second nature for data insights to play a central role in hospitality marketing.
Price-setting and capacity
When hospitality businesses are unable to correctly estimate their demand, they lose money. Hospitality data insights are unique in that they can pinpoint demand with more precision than has ever been possible.
Of course, this has always been a part of the business, but using automation to trawl historical trends will give a far better understanding, in addition to providing insights in real-time.
When you have this information, you’re able to pivot far more quickly with what’s referred to as dynamic pricing, a revenue management strategy that’s used by airlines.
A GBTA Survey on 200 travel managers revealed that 22% of them had started using the dynamic pricing method and were already leveraging it with at least one hotel company.
With the right technology, a revenue management system can be put in place, which will automatically assess demand in real-time, raising prices during surges and lowering them during slower times.
You can also source information from competitors and adjust pricing accordingly to prevent being undercut and losing business.
There are numerous applications of data insights in hospitality, not least as they relate to daily operations and marketing.
There has been substantial growth in the industry, much of it pushed forward by innovative practices that have been established by frontrunners who have begun relying on big data more frequently.
As the volume of data increases exponentially in even the smallest businesses, the incentive to make use of that data will become more apparent.
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