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Hyperbole vs actual business fact: what is the reality of predictive analytics?
In an exclusive interview with EyeforTravel, CitizenM’s Lennert De Jong shares his insights
Hotel directors and revenue managers have been inundated with news of, trends, reports, and speculation on how so-called ‘big data’ will afford them an earnings ‘power boost’ in months and years to come.
However, so far most of the discussion of analytics has been more hyperbole, than actual business fact. Given the inconsistency of advice on this crucial topic, it’s no wonder so many hoteliers seem either confused, or frozen in their adaptive tracks over data intelligence.
In an effort to shed more light on the reality of predictive analytics, EyeforTravel sought the views Lennert De Jong who is commercial director of citizenM Hotels. He is also the chairman of the HSAMI Europe Revenue Management Board, and sits on an advisory board at SnapShot.
Here’s what De Jong had to say about a range of issues surrounding the new hotel data rubric.
EFT: With all the discussion of customer experience and of new channel management strategies going forward, what should revenue managers be focusing on?
LDJ: The most important aspect for revenue managers to focus on right now is what data they aggregate, and how they aggregate it. People stuck with the same data they possessed last year are losing out on being able to make smarter decisions. In the past year there has been a mushroom impact on our business with Amazon, Google, and Microsoft entering the cloud space. This is accentuated by data aggregation moving from Excel into the cloud. All this thrust is not about simply making price changes either, but also about reporting properly to owners and key decision makers too.
EFT: Seeing that every hotel operation will logically be at some interval of adaptation where new strategies and tools are concerned, what do you believe are the most important concepts?
LDJ: Believe it or not, the one thing hotels need to do is to be open to an ‘interval’ of adaptation. So many times I hear from frustrated interns or staff in traditional hotels, how they’ve heard ‘this is how we’ve always done it’. I’ll advise every hotelier out there to take a look at their guest behavior, to look at their youngest employee, and then to challenge themselves as to whether or not they are truly open to change operationally.
I’ll advise every hotelier out there to take a look at their guest behaviour, to look at their youngest employee, and then to challenge themselves as to whether or not they are truly open to change operationally.
EFT: Smart operations all now seem to realise the value of ‘every’ channel, where hotel marketing is concerned. If this is basically true, is there a single area of distribution/conversion that is ‘least’ understood?
LDJ: No, I do not think hotels understand the value of any channel. They understand the cost of each, but not the real value. Real-time conversion attribution does not even raise an eyebrow in the hotel industry today, the term renders only blank stares when uttered. The only thing the predominance of hotels are good at, is complaining about the huge cost of OTA’s, but they don’t understand a thing about what it takes to really drive traffic through brand.com. If they did, then they would not complain about the cost of OTA’s.
EFT: What barriers to adaptation and operations “parity” exist in between larger hotel operations and small independents today?
LDJ: I think the independents are doing a much better job than the chains. Independent hotels are not driven by an audience that cares more about points than experience; they live instead by the grace of guest feedback, each and every day. Independents have the power to make decisions, and to buy the latest tools at a low cost, rather than being stuck with an ‘oil tanker’ sized operation, that cannot move in a turbulent space.
Independent hotels…live instead by the grace of guest feedback, each and every day
EFT: Your involvement with the startup travel tech company SnapShot is well documented. Can you discuss how your operational expertise factors into the creation of technologies there?
Lennert De Jong: citizenM being an owner operator, and me being responsible for all revenue and related costs every day for citizenM, I don’t have a job, I have a passion. If we cannot find what we need, we start creating it. No is not an answer for us. With our contemporary view on distribution and marketing (we only have one segment - online transient) I have helped Snapshot to put together a set of tools/data that every hotel on this planet should adapt, as this segment will be growing and growing and take over all segments in the future.
If we cannot find what we need, we start creating it.
EFT: Is it possible to create an analysis and decision-making tool that suits everyone?
LDJ: In principle yes, you need to have enough flexibility to create your own views, but the KPI’s are the same. It’s like the dashboard of a car and the view through the window. The metres might be different, and you might be on a different road, but we are all driving a car on a road.
EFT: At citizenM Hotels you have been one of the highest profile advocates of hotels being transparent and giving constant reassurances to potential guests. With this in mind, how important is security for the whole data analytics equation going forward?
LDJ: Let’s not confuse guest experience with security in data analytics. We are always trying to be open in what we offer to potential guests, and we try to be relevant in marketing towards our guest. But all of this needs to happen in the framework of a secure and legal framework. Having your (guest and marketing) data in the cloud makes it more secure than any local database, as long as you are serious about it as an organisation (access control).
EFT: Do you see a convergence of knowledge and strategy taking place across the hotel marketing landscape?
LDJ: There are a lot of articles about the clash between the CMO and the CIO in terms of technology spend. Is it technology spend or marketing spend? But let’s not forget about the CEO. He needs to take a look at unified and holistic data. Data becomes the glue of the organisation and I see it as the job of the current leaders to fix this. We should not have data discrepancies between our finance systems, PMS, forecasting systems and CRM. Why would finance only report on occupancy, ADR and distribution costs, and the marketing department on repeat figures, demographics etc? The roles in organisations have changed and so do the responsibilities. But it does not happen without discussion and grouping of people, so that’s why in my opinion organisations like HFTP (Hospitality Financial and Technology Professionals) and HSAMI become crucial in the shaping of the next decades.
EFT: Returning to your part in developing SnapShot’s ‘undercover’ tool for data analytics, how big a role will education and certification play in distributing new cutting edge technologies in the future?
LDJ: Education is key. Certification is proof of education. Education as such changes rapidly, so we should help and support the change of this as tech companies and hotel industry. People get educated by MOOCs (massive open online courses) and even on YouTube. The world is changing so fast that we need unconventional methods to keep everyone up to date.
EFT: The need for streamlining, and easy uptake in operating new technologies suggests that not every hotel property out there needs ‘cookie cutter’ tools or strategies. How much customisation capability should a tool or service provider be prepared to offer?
LDJ: The world is globalising and hotels should benefit from economies of scale. Why would a 20-bedroom hotel have a specialised need for data, marketing or technology? Taxi companies have been creating their own systems, meters and communication methods for years. Uber has used global devices to slim down to an iPhone - one variant for the customer, one for the driver. These sit on top of a cloud platform. Why would the hotel industry be different? Do we really think individual hotels can compete on custom technology, smarter data sets or simply by attracting customers to their website, with the likes of booking.com and Expedia?