By Pamela Whitby
In 2014, we all heard about the value that guests place on free and fast internet access. Earlier this year, for example, a survey of 2,000 UK adults by online travel agent ebookers found that guests ranked free WiFi as important as a room with a view; this was number two on the list after being offered a room upgrade.
In 2014 we also heard how important it was to focus on and personalize the individual guest experience in order to drive ancillary revenues; a soon to be published EyeforTravel report finds that nearly a third of hotels saw ancillaries boost revenues by 25%.
That said, working out what to sell and to whom is tricky; after all, people and their needs are varied and complicated. Based on the ebookers survey, for example, a hotelier may well think that offering a room upgrade with free internet access will lead to high satisfaction scores but that isn’t necessarily the case.
What if, for example, the room with the view is the furthest from the property’s internet antennae making access frustratingly slow? It may be that dissatisfaction levels were that much higher, not because the internet access wasn’t free but because it was slow.
According to Chris Brogan, SVP Strategy & Analytics for Hyatt Hotels & Resorts, this is where big data and predictive modeling can put scarce resources to use more effectively. “It’s about ‘mashing together’ customer satisfaction data with loyalty data and the graphical data from mapping programs with data from financial systems and the profit and loss accounts and tying this together over time to establish what each individual guest wants and what they are prepared to pay for,” he says.
Having access to such data to aid decision-making may sound powerful – and simple – but the reality is that it’s still very early days for many hotels. So here are some tips for revenue managers and data analysts to help ease the journey.
1. Ensure Your Data Feedback Loop Is Continuous
Whereas, firms like Amazon don’t have a problem closing the loop on data because they own the whole chain, that’s not true for hotel chains where there are multiple stakeholders. For Brogan it’s important to understand that “data and maths are just time and money”. These problems have been solved before, he says, but the real magic is in activating any big data or analytics program so that things start to happen operationally. To do this, you need to ensure that your data feedback loop is continuous. And that means collecting data as accurately as possible from the front desk all the way through guests for the whole chain.
2. Keep The Data Clean – It’s An Asset
Like it or not there will always be unforeseen consequences with data, and you need to be prepared. For this reason it’s essential to have methodologies in place to ensure that data is as clean and well organized as possible. “There is always the possibility of a black swan floating out there that could it hit at the wrong time,” says Brogan, who spends a lot time talking to people across the business about the impact of dirty data. It’s a large-scale education process and it’s ongoing; it’s not simply a case of cleaning up and moving on – you have to keep working at it. Another thing to be aware of is that statistics today can be generated very easily, but they are pointless without context and meaning. Scott Pusillo, VP Sales & Revenue Management at Viceroy, another mid-sized chain, suggests creating a base line that allows you to map and make sense of data whether your gut agrees with it or not.
3. Talk To People: This Is A Cross-Functional Responsibility
Having the title of VP Sales & Revenue Management is no accident, says Pusillo. In essence, today hospitality executives need to be well-rounded individuals with at least an understanding of the functions of sales, marketing, revenue management, data and analytics and so on. “If you can do all, so much the better,” he says.
From a data point of view, analysts should spend a significant amount of time not only working with the data warehouse but also with operations units and finance units. Brogan cannot stress enough that it’s a cross-functional responsibility, but warns that it’s important to use the language of hospitality for common understanding.
4. Hire As If You Are Hiring Creatives – Or From The Best Business Schools
This brings us to the issue of hiring the right people. “First and foremost, we are hosts and we are here to deliver a hospitality experience,” says Pusillo. But he is also quick to point out that equally, his team is custodians of the ownership assets and so smart business decisions need to be made. For this reason he argues that hospitality firms should be recruiting senior management with a strong business background, and from the top business schools.
Interestingly Brogan says the maths and stats skills are becoming easier and easier to find. What’s more difficult is finding people who have the curiosity and capacity to constantly question everything and explore all the possibilities in the broadest possible terms. “When hiring analysts today you really need to treat it almost like hiring creative, because there is a lot of art to the work they are doing,” he says.
5. Move Away From Loyalty As A Transaction
It’s a fast-changing world and all hoteliers are working out which nut to crack in 2015. But one thing is certain – mobile is on the up. “There will be an inordinate amount of time spent on mobile, but those who understand that mobile is only part of the experience will do better,” says Brogan. Many of the big chains, not to mention the OTAs, are working hard to drive loyalty via mobile. But here is something to consider: is loyalty a transaction or something you earn because your product and guest experience is better? For Brogan and Pusillo, the focus has to be the latter.
Scott Pusillo and Chris Brogan will be speaking this month in New York at Smart Travel Analytics, North America (Jan 28-29, 2015). Limited places left, to secure yours with a special Social Media Monthly discount, email firstname.lastname@example.org