Big Data & Hospitality
Big data is a big deal in the corporate world. Data is collected and then mined for trends then, in turn, makes more money for the hotel. The hospitality industry could certainly benefit from big data analysis. The hospitality industry is starting to jump on the data bandwagon and for good reason. Below are just a few examples of how hotels can use data sets to influence the business.
Determining Client Lifetime Value
One of the biggest things is properly determining a client’s lifetime value. If you have data about a particular customer’s brand loyalty, number of stays, and average spend, you can determine how much they will spend with you over their lifetime with the company. When you have this information, you can make sure every stay they have is exceptional and that they want to return. The bottom line is that a businessman who frequently travels will spend more over his career than an individual who hit it big in the casino on vacation. The data can point to this and ensure that you go above and beyond for repeat customers.
The first point also flows into customer retention. Knowing that an individual stays with you often is helpful for providing a service that will keep them coming back. Not only that, data collected from customers about hotel amenities, what their expectations are, and what issues they have, will steer you in a direction of creating a personalized experience. This type of data can help you replace current, unwanted amenities with things that customers actually want. The better service you can provide, the more customers you retain overall.
The biggest opportunity for data to work for the hospitality industry is in relation to the optimization of room rates. By collected and parsing through previous yearly data, correlations can be made. The data can tell a hotel a variety of different things that will influence the rate of a room. For instance, the data will show that in a particular month they were completely booked year over year. The demand is high, so the price can be raised slightly. On the other hand, if business is slow, lowering rates may attract more customers. Either way, optimizing the room cost is a huge opportunity for a hotel’s bottom line.