How Hotels Are Turning Customer Data into Dollars

Don’t let your valuable data gather dust! Find out how hospitality companies are monetizing their own data to better serve their customers — and improve their business.

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THE HOSPITALITY industry is engaged in a game of one-upmanship:
The competition gave you a free bottled water? We’ll give you free in-room Wi-Fi.
You weren’t thrilled with your recent hotel’s restaurant? Here’s a coupon for ours. We even specialize in your favorite foods.

To keep their competitive edge, hospitality companies are relying on various data analytics techniques that clue them into customer wants and needs. As the name suggests, these all have one thing in common: they run on data. If there is one thing that hospitality companies usually have in abundance, it’s customer data.

Hotel chains and operators are becoming increasingly aware of the two-fold value of their customer data. It can be monetized either directly or indirectly. The direct way — selling it or trading it to another company — doesn’t require much more than the proper legal waivers. Another popular and relatively straightforward use of customer data is teaming up with a partner company, sharing data, and creating mutually beneficial offers.

Frankly, though, this type of data monetization is well-known. So in this article, let’s consider how Big Data is helping hotels monetize customer data for their own use.

Four Ways Hotels Get Results From Monetizing Data
We might call these four ways of monetizing data the indirect ways. Unlike straight up selling, they take a bit of work before they start turning a profit or fostering a more positive customer-brand experience. However, hotels can reap repeated or ongoing rewards from using them.

Personalization - Giving Guests What They Want
First, let's start with personalization. Customer experience is hugely important, and gathering customer data (e.g. through surveys) has been going on for a very long time. But you don't have to rely on guests’ volunteered data; there are many other systems in place that are gathering preference data for you, albeit in the background. For example, a customer's bar tab or room service orders can show food and drink preferences or dietary restrictions. Their booking history can indicate if they travel with kids or pets.

Allergies and special needs ( e.g. wheelchair accessible or fragrance-free rooms) can be 'remembered' and used to provide an outstanding level of personalization.

The benefits of personalization are among marketers' most desired goals: creating profitable, long-lasting, and loyal relationships. But they can also lead to other benefits, like promoting the most relevant offers and upsells.

Promoting The Customer’s Best Offer - Targeting Campaigns
Targeting campaigns is another tactic that's been around ever since marketers learned to segment. But with the birth of various new arenas, particularly social and mobile, campaigns can now be hyper-targeted.

An excellent example of this was provided to us by Red Roof Inn during the 2013-2014 winter. As winter storm after winter storm pounded the US, a tremendous number of flights had to be cancelled. This was leaving 90,000 passengers stranded every day.

The Red Roof analytics and marketing teams created a special campaign for interrupted travelers. First, they found publically available information on weather conditions and flight cancellations. Then they launched a mobile-friendly campaign that specifically targeted locations likely to experience travel delays. (Remember, most of these customers would be using a web search to find hotel information, and many of them would be using a smartphone or tablet to do so.) Result? Areas where this campaign was used experienced a 10% upsurge in business.

Acing the Upsell - Maximizing Other Services
Most hotels do more than just offer rooms; filling up the onsite spas, restaurants, and other for-pay amenities is an essential part of their income. Upselling and cross-selling are industry standards, but they only work when they appeal to the customer. We've moved beyond the simple "offer for the month"; customers want to buy a personalized, meaningful experience that speaks to their values. That could be a premium room, a massage, gourmet food, or a round of golf. Once again, the key is tapping into your data and using analytics to uncover points of interest.

Understanding Sentiment Analysis - How Do You Compare with the Competition?
Finally, let's use analytics to look in the other direction: outward. Sentiment analysis enables hotels to gather insights from social media regarding how their properties perform on their own merits and how they stack up to the competitors. This can lead to improvements in pricing, customer service, staff training, and more.

Interestingly, a poor review of your property doesn't have to be a negative. How you handle it can turn it into a positive. Surveys have shown that when hotel management responds with genuine concern to a negative review, customers actually feel better about that brand.

Data that’s just sitting around is wasted. Put it to work for your hotel, and everyone — customer and business — gets some type of reward.


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