Big Data is catching on in the hospitality industry but it’s not just the biggest hotels that are leading the revolution. Smaller, boutique hotels are rapidly becoming data-driven too, using analytics to track and meet the demands of chosen demographic.
Serving niche segments
One of the best examples of this new trend is citizenM, whose Big Data initiatives were the subject of a recent whitepaper sponsored by the much talked about SnapShot hotel analytics startup. As a small boutique hotel group with just seven properties worldwide, citizenM is trying to carve a niche for itself among a very specific kind of guest – one with a large budget, travels alone and is more amenable to the kind of design-conscious experience it offers.
SnapShot executive gives a demo at ITB Berlin – the much anticipated analytics product was an event highlight for hotels
Given its focus, citizenM doesn’t use its data in the same way that larger hotel groups use theirs, for example by segmenting guests into broad categories like business or leisure. Instead, it uses its data to try and develop more holistic assessments of its chosen guest type.
Michael Levie, Chief Operations Officer at citizenM, said the idea is that hotels can use data analytics to learn about “the whole guest”, by identifying the different phases of their travel sentiment throughout the duration of their trip. He cites new data from SnapShot that shows some 46 percent of business travelers add personal days to their trips. As such, many of citizenM’s guests might start out on a business trip, only to take a few days to enjoy themselves once their business has been concluded.
citizenM is renowned for creating an upscale, casual atmosphere – citizenM Rotterdam
Levie explained that data-driven insights are critical for hoteliers if they want to build better relations with the specific traveler type they’re trying to serve.
“When you create something for a specific niche, and you are very good at finding them, and making sure they find you, then the guest-satisfaction that we’re talking about is so much higher,” Levie says.
citizenM gathers the bulk of its data via onsite customer service systems that are plugged into a central dashboard. Using the dashboard, operations managers can leverage the data created by every guest interaction, with the software itself watching guest behaviors and service actions to educate management about the consumer experience.
Using its data, citizenM has built a business model that’s very different from the larger, legacy hotel brands. Rather than try to compete by attracting every kind of guest, the hotel group believes in strong matches between guests and properties, making the right decisions for those guests around services, and delivering more accurate and effective marketing to its chosen niche.
But Big Data can help smaller hotels to do more than just locate and better serve their chosen demographic. They can also use data as a way of optimizing their accounts, by mapping the sources of their bookings and assessing the cost of guest acquisition so as to better optimize revenues. To further solidify this concept we spoke with Martin Soler, CMO of the aforementioned SnapShot startup, about how smaller hotels can benefit from key data specific to their operations. Here’s what Soler had to say:
“Once the hotels internal data, pms, crs etc (small data) has been properly curated adding big data layers to it to measure trends and start predicting things is key. A small hotel may not need to predict how many staff to hire for a particular month or week, but knowing in advance how weather changes over the weekend affect one’s bookings. How trains and events happening in another city can cause a high or a low in a few days these are some basic uses of big data analytics that even small hotels can use.”
Data-driven growth
25hours Hotels, with eight properties worldwide, is one such chain that’s following this approach. It’s Chief Operating Officer Michael End (below) said his company is taking a cautious approach to data, but believes these initiatives are already having a noticeable impact on both revenues and customer experiences.
“We are not a super tech savvy company, we are not like citizenM,” End admitted in an interview, saying his hotel doesn’t offer mobile check-in or iPad room controls just yet. “We believe that human interaction is more important and that technology should enhance that experience.”
Michael End, COO of 25hours Hotels
Instead of going all-in on data, 25hours Hotels prefers to follow what End calls a “kind of hybrid strategy” that involves dedicated marketing teams being on site to collect ideas and create content for their guests in something close to real-time. “For us, most important is speed; when people raise concerns online we are super fast to address it,” End explained.
Despite this low-key approach, End insisted that data is becoming a vitally important component of 25hours Hotels’ understanding of its revenue, and its overall growth. He said the hotel collects data with a view to getting answers to some of its most pressing business concerns.
“Our data needs to be collected and consolidated from a performance point of view,” End explained. “What have we achieved in the past? How much revenue? How much occupancy? What do we expect in the future?”
The point End is trying to make is that while the majority of smaller hotels can’t exactly be considered to be “tech savvy” like citizenM, it’s possible for them to become data-driven at their own pace.
“We are somewhere in between,” was End’s assessment so far. “I’m trying to lead our company into a smarter future, because I believe that you need smart technology to be successful in the future.”