What every hotelier wants to know about ‘big data’ analytics
Guest columnist Phil Butler is back and advocating that hotels balance tangible conservatism with feasible potential to find their competitive edge with technology
Everyone in the hospitality industry has, by now, been inundated with the hype, the potential, the trend toward empowering hoteliers with big, big, big, big DATA!
But questions for the average hotel director remain: Where is the proof? Is there any tangible evidence a universe of data has helped any hotel owner?
Surely this is this what every revenue manager on the planet wants to know! So what is the state of data analytics in the travel industry, and who is doing what?
Heads or tails?
For hoteliers, or any business for that matter, revenue and profit are what matter. This is from the supplier’s side of the business however. The service, what the customer experiences in dealing with a hotel is the driving force behind profit. Indeed, the fundamentals of the hospitality business remain unchanged; namely, guests being satisfied, willing to spend their money, and happy they did.
However logical and static an idea of selling hotel beds may be, the technologies and marketing behind selling those beds has undergone dramatic changes. The situation today is not unlike the early days of television. That said, we constantly hear digital call points like ‘the experience’, and the ‘customer journey’ parlayed at conferences and summits on the speaker circuit, just like soap suds were evangelised on early TV soap operas.
For the potential consumer of data analytics, and ‘big data’ tools, much of what’s being advertised is just that, just more marketing noise. But not all the noise is hyperbole, some stunning tools are being manufactured, albeit incrementally.
In this ‘so far’ nebulous world of hotel analytics it’s difficult for hoteliers to make heads or tails of what is going on. But what’s clear is that ‘deep customer insights’ will lead to a better guest satisfaction score, or even optimised room rates. Having said that, the hotel concierge or desk clerk is far from being empowered to provide these heightened experiences.
Personalised price has long been a sort of ‘holy grail’ for hotel management. The good news now is analytics make the dream possible, even probable for some. This is down to the massive growth in databases with key intelligence about booking websites, hotel review sites, and social networks, combined with legacy CRM or loyalty systems. These and other technical innovations make yield bonuses possible, but the tools to harness this data are scarce so far.
Large hotel chains like Marriott have been toying with deep analytics for some time, but in reality few hotels have any real marquee yield tools in this realm. This Amadeus study considers Marriott’s efforts to launch a truly leveraged yield management powered by data sets. Like most other chains, Marriott is still in the experimentation phase.
To quote Amadeus’ expert, Harvard professor Thomas Davenport:
“Most recently, Marriott has been analysing big data from its website activity to create a robust marketing attribution model. The ultimate goal is to understand which sales and marketing activities really drive the sale to a customer.”
As the wording suggests, even Marriott does not yet fully understand how to drive the revenue yield scale far upwards. Remember, I said ‘not yet’. The right room at the right rate is one thing. The right room and rate to the right customer, and more of them, at the right time, this is the pinnacle of yield win.
While Marriott and other chains have ‘started’ to predict optimal prices with algorithms, speed and total integration within the hotel ecosystem is not complete. Some hotels have begun using software like IBM Big Data Analytics to correlate their own data, and data sets from review sites, social, and their own websites, but more than weighing ‘likes’ and ‘dislikes’ is needed to fully optimise yield.
Magic lessons from your mobile guest
The guest is concerned about his or her experience, remember? And what do almost all guests have in common these days? They are tied as if by an umbilical to their devices.
Disney offers up a clue with the iconic brand’s MyMagic+ system released two years ago. If there’s any company on Earth that knows about customer experience, it’s the people who created the Mickey Mouse and the most memorable characters ever. MyMagic+ transforms a typical loyalty programme concept into a fully interactive visitor empowerment. Through seamlessly integrated innovations like Disney FastPass+, MagicBrands, and My Disney Experience holidaymakers can not only build a unique experience but they’re enabled to fly through the red tape of unwanted negatives.
And Disney learns from smart device using guests, just how to maximise Mickey fun, as well as Disney earnings from guests. Leave it to Walt Disney to point the way for hospitality in the years to come; MyMagic+ is a gateway to information, for those still doubting big data.
But ‘saying’ data analytics is ‘the way’, is what we’re trying to define here. Successful innovations like Disney’s are a signpost for every business, every hotel on the planet.
“It's only a matter of time before Disney begins flexing the information it has on its park goers. Early examples of the endgame of MyMagic+ were for costumed characters to address children by name and personalised dining and attractions recommendations.”
The next wave will be real time guest info that will power boost hotel staff from the laundry room to the front desk, not to mention managers and sales execs. Customer satisfaction will soon become a very refined set of digitally empowered principles, but more importantly ‘big data’ will reduce waste, increase margins, and free up managers and personnel to perform native tasks like – serving guest wants and needs in person, just like in the ‘old days’, in a personalised way.
The day of cookie cutter service is at an end. Start looking into your own brand’s app, or a collective app that serves your purposes.
Hello data powered operations
Predictive analytics and other forms of ‘big data’ manipulation offer unbelievable potential from a hotel operations point of view. Once again though, no single solution has emerged for hotel energy bills AND what sort of room service menu a particular guest desires. While all encompassing IT operations analytics are discussed, so far only InterContinental and a few others are toying with systems designed to provide a complete analytics overview. Here again we see even the biggest and most capable hoteliers using Big Data structures and practices representing the infancy of analytic potential.
Hyatt Hotels, one of the most innovative luxury brands in the world, is ramping up their predictive analytics prowess, but as senior vice president, strategy and analysis, Chris Brogan argues the real magic can only happen when big data or analytics programme is activated so that things start to happen operationally.”
So far Hyatt is emulating Amazon in discerning ‘if you like this, you might like that’. Once again current industry uptake of analytic tech is constrained and limited. While we might like to blame this on a lack of assertiveness on the part of innovators, this is far from the case.
For insight into the ‘why’ an all-in-one solution has not been presented, I asked Martin Soler, CMO of SnapShot about that much talked about company’s next version tools. Soler’s answer reveals once again, an industry marking out the steps toward the kind of ‘gateway information’ synthesis Disney’s MyMagic+ hints at:
"Our focus for the next phases of development will be on refining how hotels use demand management in order to generate more profit. Our next tool will focus on measuring hotel demand and analytics related to that."
One of the challenges today is the current business intelligence landscape. Reliance on old data systems, PMS, and myriad technological dinosaurs make rapid innovation less feasible for even the top tech companies. This is the main reason that even the Disney’s or Hilton’s of the world, have yet to break out with a stunningly capable predictable analytics revelation. What the industry is about now, is clearly defining and refining very focused capability.
Now we can see, part of the reason ‘big data’ super powers tend to be more about potential, than current realities. The key for either independents or chains is, for now, climbing on board the feasible concept, and the reputable data innovator’s product.
Big data technologies should make sense
So, where should your hotel be positioned in the world of business intelligence and predictive analytics? To offer a good answer here, it’s necessary to return to the Amadeus paper in order to find the wide path. I’ve mentioned how legacy systems play into the whole mix, but Professor Davenport offers up the meatiest answer with this statement:
“Big data technologies may be the only technologies for startup and purely online travel firms, but large companies will have a hybrid environment for the foreseeable future. This will lead to challenges of IT architectural cohesion and efficient functioning of all these new and old systems.”
This makes even clearer the necessity of incremental development, and adaptation of tools as well. The ‘hybrid’ environment is clearly the predominant schema hoteliers will face in the short and mid-term. Tools that can integrate with, and accentuate or empower, the aforementioned legacy systems will dominate first, and then lead to next generation capabilities.
This is a complex way of advising hoteliers to look for solutions that make the most sense. Any company professing the capability to perform in a fantasy world outside old architectures is only dreaming (or forcing you to). This addresses data analytics from the conservative point of view, of course, but competitive edge is a combination of tangible conservatism, enhanced by feasible potential.
That said, every hotel executive has to be looking at ‘best case’ future capability too. Emulating companies like Disney, IBM, Hyatt and even Amadeus. These are early examples.
Finally, hoteliers should be closely watching emerging technologies such as AB testing of products like SnapShot or Adobe powered analytics tools such as those narrowly focused ones like Vizergy. But remember always to ‘test before you buy’ because what you want is product that impacts your hotel’s bottom line.
Phil Butler is editor-in-chief of Everything PR News, CEO of Argophilia the online travel development company, and co-editor of Argophilia Travel News. He’s widely cited on beta startups, search engines and marketing, and a contributor to Social Media Today, The Huffington Post, The Epoch Times, and other media outlets. His views are his own