Goodbye silo: how big and small data is fuelling growth at IHG

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With travel habits changing and travellers becoming more demanding, data and analytics can help hotel groups target the right audience. Pamela Whitby reports

It seems travellers both in and into Asia no longer simply want to bake on a beach.

According to Tarandeep Singh, Intercontinental Hotel Group’s Director of Revenue Analytics for the Asia Middle East and Africa (AMEA) region, over the past two years a major trend is that travel is increasingly being booked around activities, particularly at the group’s spas and resorts.

“Before it used to be about destination marketing but now we are seeing a lot of demand for activities in the beautiful resorts of South East Asia,” says Singh.

This presents a significant opportunity for travel brands; in fact recent EyeforTravel research finds that over 40% of people from BRIC nations would welcome information on things to do while on holiday.

With 4,760 hotels and resorts in its portfolio, 82.4 million loyalty members and a three-pronged approach to data and analytics, IHG is in a strong position to segment target audiences and market accordingly.

“We are able to analyse who exactly is searching for a destination and what kind of activities they are searching for in that destination,” explains Singh.

For example in Bali, the group can cater to different clientele because it has three different brands that look after the needs of consumers from different segments.

That’s not to say that guests looking for smarter travel solutions in developing markets are not important. Average daily rates (ADR) in these markets may not be high in dollar terms, but still contribute around 30% of comparable hotel Revpar in the first year.

“The new rooms in these developing markets do provide a strong incremental feed for IHG. It’s where expansion is happening and where there is the biggest churn,” says Singh. The interesting bit is that ‘new rooms’ in developing markets provide strong incremental fees despite lower absolute RevPAR levels

Driven by data

So how is data today changing the way an organisation like IHG targets its customers? At one stage, the firm had data sitting in different silos across the organisation. For an organisation of this size, IHG (one of the biggest), which books close to 150 million room nights a year from its CRS system, Holidex®, has a fast-growing loyalty programme and web traffic pushing over $600m a year from mobile devices alone, it was crucial to get the data in one place.

“We have brought small data together to make big data and tried to see what impacts what,” says Singh.

That’s paid off. Whereas in the past one campaign would go out with ten to 15 different messages, today with that same data the same campaign is packaged differently for different individuals. According to Singh, IHG gets web variables of all types – traffic, conversion, geo source, preference, channel and so on. This enables the group to target far more accurately with much higher conversion rates than a few years ago.

Much of this is put down to analytics where IHG takes a three-pronged approach.

1. Operational analytics: This enables revenue managers to create peer reporting for stakeholders – like marketing - from across the organisation to take different decisions.

2. Back end analytics: This involves the discovery of different patterns and analysing different numbers trends using regression or correlation analyses, which can inform business practice.

3. Predictive analytics: This is used to predict guest’s purchasing and stay behavior in the different online and mobile space. IHG today uses ‘predictive demand intelligence (PDI) that uses over 30 forecast engines and analyses all demand data specific to a hotel or a market. This accounts for economic factors like GDP growth and any other outliers.

On the software side, almost ten years ago, IHG migrated to Teradata to solve its data specific requirements. That, says Singh, is easily migrated with the group’s business intelligence tools to ensure complete data integrity.

“We wanted to ensure that we have total cost of ownership and that the data sits with us rather than being owned by a third party,” explains Singh.

This helps IHG to analyse the data in real time and then use this to evaluate whether daily marketing plans have been successfully executed.

“Based on this, data analytics have been able to rewrite our consumer segmentation and break it up by every brand to ensure we are talking to the right audience at all times,” he says.

Next week take a look at how IHG’s brilliant basics approach is delivering returns.

To hear more insights about how the Asian market is shaping up, join us next year in Hong Kong for Online Market, Mobile and Social media in Travel (Feb 3-4) or in Singapore for Travel Distribution Summit, Asia (May 20-21) where Tarandeep Singh will be speaking

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