What’s the one question every hotel owner, director, and revenue manager on Earth wants to ask about Big Data and predictive analytics? “Where’s the proof?” This is what’s missing from every conference presentation, and ever marketing pitch for tech tools that will jump start the new business intelligence (BI). For those in need of such a status report, here’s some high spots from an analysis I prepared for Eye for Travel last week. The bottom line is, predictive analytics for your hotel business will soon live up to your expectations.
Revenue and profit are what matter for hoteliers. Nothing has changed in this regard, business runs on profit. What has shifted however, is the inbound marketing of rooms, the channel mastery we’ve come to understand, which shifts time and again to reveal new strategies. The guest experience we’ve finally recognized via TripAdvisor reviews and amplified word of mouth social media, is in itself amplified by guest data and deep analysis. The hospitality end of business has not changed so much, but operationally the ball game is in a paradigm shift. The customer journey is now an input data set, to predict hotel business outcomes. For the potential consumer of data analytics, and ‘big data’ tools, the hotelier, it’s crucial to know what’s on the horizon. We need to know which tools to use, in order to take advantage of Big Data, without wasting time and resources experimenting. Here’s a look at some key innovations and companies, to help make sense of predictive analytics for hotels.
The right price, at the right time, for the right guest, personalised pricing is one of the key to profit margin for hoteliers. The coming integration of massive databases filled with key intelligence about booking websites, hotel review sites, and social networks, and the legacy CRM and loyalty systems will come online very soon. These and other technical innovations make fairly dramatic yield bonuses possible. But until the key players fully integrate all these systems, hard tools to help managers boost yield are few and far in between.
Big hotel chains like Marriott have been toying with deep analytics for some time now, but the vast majority of hotels out there are in their infancy in trying to decipher these mountains of data. An Amadeus study I mentioned in the EFT piece, it reveals Marriott’s efforts to launch a new yield management powered by data sets. But like other chains, Marriott is still only experimenting. Professor Thomas Davenport explains:
“Most recently, Marriott has been analysing big data from its website activity to create a robust marketing attribution model. The ultimate goal is to understand which sales and marketing activities really drive the sale to a customer.”
So you see, even Marriott does not yet fully understand how to drive the revenue yield scale far upwards. While Marriott and other chains have ‘started’ to predict optimal prices with algorithms, the ultimate speed and total integration within their hotel ecosystems is not complete. Some chains are using software like IBM Big Data Analytics to correlate their own data, as well as data sets from review sites, social, their own websites, and so on. Unfortunately, weighing ‘likes’ and ‘dislikes’ will not fully power any BI worth mentioning. What’s needed are a set of more complete, better integrated, and more intelligent tools.
The Magic Kingdom of Mobility
The guest experience. This TripAdvisor inspired revolution, it’s turned upside down how hotels market their rooms, but not surprisingly. Hotels have always been dependent on guest satisfaction, only the competitive sphere has changed with digital. The move to digital marketing and advertising was made necessity by the Internet, and now the mobile web morphs once more, how brands reach their constituents. One company that has always been about “unique experiences,” Disney now leads the way again with a transformative platform.
MyMagic+ is a system Disney released two years ago, that transforms the loyalty program concept into a fully interactive visitor empowerment. The system, seamlessly integrated with innovations like Disney FastPass+, MagicBrands, and My Disney Experience allows Disney guests to build a unique experience, while speeding through former choke points along the customer path. In effect, Disney does away with the turnstiles cramped by waiting Mickey Mouse fans, and enhances through access an already magical experience. Okay, maybe I did some marketing and PR for Mickey there, but the system is that good. What’s more MyMagic+ is a gateway to information, for those still doubting big data’s capabilities.
“It’s only a matter of time before Disney begins flexing the information it has on its park goers. Early examples of the endgame of MyMagic+ were for costumed characters to address children by name and personalised dining and attractions recommendations.”
Now imagine all your guests walking along their visitation journey assisted by hotel staff from the laundry room to the front desk, with intelligence tailored for each one of them. The “Holy Grail” of ultimate customer satisfaction will be at hand. On top of this value, hotel managers will be able to leverage analytics in order to reduce waste, to increase margins as above, and to empower personnel with information that makes their jobs easier, instead of more difficult. The bad news for some hotels, intrenched in old ideas is, the day of cookie cutter service is at an end. We all have to begin looking into such tools as apps, software, and even hardware that facilitates these new super powers.
Big Hotels – Baby Steps
Predictive analytics and other forms of ‘big data’ manipulation offer unbelievable potential from a hotel operations point of view. However powerful these technologies may be though, no single solution has emerged to cover the gambit of operations. There are energy and consumption programs out there, and IT solutions that mimic the legacy booking and reservation dinosaurs, but no real “all-in-one” analytics solution is on the horizon. That said, hotels like InterContinental and a few others are toying with systems designed to provide a complete analytics overview. Here again we see even the biggest and most capable hoteliers using Big Data structures and practices representing the infancy of analytic potential.
Another giant chain, Hyatt Hotels is also ramping up their predictive analytics prowess. Their senior vice president, strategy and analysis, Chris Brogan tells us the true power of big data analytics will only take place when put in operation. Hyatt has so far only emulated Amazon data dogma in being “suggestive” as in ‘if you like this, you might like that’. These are “baby steps” any technological revolution takes, on the way to advancing capability. I asked a key expert on hotel marketing innovation, Martin Soler (at left), chief marketing officer of SnapShot travel to elaborate how that German analytics startup is “taking steps” to solve the analytics pain hotels suffer now. Here’s what Soler told me:
“Our focus for the next phases of development will be on refining how hotels use demand management in order to generate more profit. Our next tool will focus on measuring hotel demand and analytics related to that.”
It’s no secret one of the biggest hurdles for hotel business intelligence today involves old data systems, PMS, and myriad technological hurdles that hamper integration and adaptation by hotels. This is one reason the large chains, or even innovators like Disney, have not debuted a stunning and complete predictive analytics innovation. The larger ecosystem, the legacy of past innovation, it’s a massive maze of twisted wires and dead ends, a navigation nightmare every hotelier loses sleep over.
Making Sense of Big Data
The hotel owner reading this may be asking the question; “So, where do I fit in this adaptive matrix of business intelligence to come? Looking back at the Amadeus paper I mentioned, Professor Davenport gives us the answer:
“Big data technologies may be the only technologies for startup and purely online travel firms, but large companies will have a hybrid environment for the foreseeable future. This will lead to challenges of IT architectural cohesion and efficient functioning of all these new and old systems.”
Incremental progress, this is where we are right now. This “integration” problem serves as a bottle neck, a sort of “filtering” process that is normal for all industry shifts. I use the term “baby steps” a lot because this is what I head from every industry expert. Science is about incremental progress always, and business intelligence science is no different. What’s important for every hotel owner to understand is, choosing the right tools for YOUR situation is a best case now.
You simply have to emulate companies like Disney, IBM, Hyatt and even Amadeus, in order to more quickly transfigure your operations. Emerging technologies such that afford the opportunity for testing, they should always be considered. products like SnapShot or Adobe powered analytics tools such as those narrowly focused ones like Vizergy, these and a few others represent excellent opportunities to not only learn, but to get a head start on transforming your process. I’ll leave you with the latest on predictive analytics from Customer Think, an infographic (click for larger version).