The term ‘Big Data’ has been a very popular buzzword used among marketers and other professionals in the past few years. So what exactly does the term mean and how is it important to the hospitality industry? Big data is defined as a conglomerate of structured and unstructured data from traditional and digital sources inside and outside of a business. With an overwhelming amount of data available through different sources, it is important to simplify data, not simply discard it. Hoteliers must ensure that all data collected is accurate in order for it to be useful for hotel reporting, analytics, and forecasting. The benefits obtained from big data are plentiful in the hospitality industry, including better decision-making, stronger customer relationships, operational efficiencies, greater market share, and much more; which is why it’s important for hoteliers to understand and utilize data to make well-informed investment decisions to prevent costly mistakes and reduce risk.
A large benefit of big data is that it offers enhanced revenue strategy and management. Developing a revenue strategy prior to managing allows hoteliers to better forecast and examine every analytic in the booking process thoroughly for any flaws or inefficiencies. A well designed strategy provides the opportunity for enhanced price optimization and a greater understanding of customer acquisition/retention costs by various channels. A powerful revenue strategy for hotels should encompass all sales, marketing, and social search optimization (SSO) teams to produce better results. After solidifying your strategy, revenue management can then start to take place. An important role of revenue management is to provide a detailed analysis and support for personalization initiatives to assure these measures are profitable and maintainable. Big data plays an important part in revealing customer preferences, and also reveals whether personalization initiatives are successful or not. Additionally, enhanced revenue management provides the opportunity for hoteliers to establish optimal room prices, generate higher occupancy rates, insure rate parity among OTAs, and so much more.
Another notable advantage of big data is that it provides more effective and personalized advertising and services to your customers. With a large volume of guest data available than ever before, hoteliers are able to utilize technology and big data to comprehend the needs and wants of their customers more so than in the past; thus, hoteliers are encouraged to use the data available to them to make improvements in the guest experience. For example, to deliver better content and service to their customers, provide recommendations or experiences that match the guest’s preferences, or even allow guests to customize their own experience at the hotel (i.e. local events, on-property activities, etc.). In this highly competitive industry, it is imperative for hoteliers to utilize data to effectively personalize their services and products to their customer base in order to justify their demand and price point.
Slowly but surely, the entire hospitality industry is harnessing the power of big data to provide actionable insights. It is these actionable insights that stimulate intelligent decisions for maximum ROI of hotels. It is important to keep in mind that, although Big Data provides insightful information, only the human mind is able to proactively put data into actionable use.