How big data helps the hospitality sector

The hospitality sector is a highly competitive part of the economy, with hotels in particular always under pressure to deliver the highest-quality experiences at the lowest cost possible. 

A key challenge for this industry is that in the age of constant connectivity, customers have higher expectations than ever before and will demand a personalised experience. If they do not get this, they will often not have to go far to find a competitor who will meet their needs.

Fortunately, there are steps hotels can take to deliver this service. Anil Kaul, chief executive of Absolutdata Analytics, wrote in a recent piece for Dataquest that big data analytics is a natural partner for the travel and hotel sector, due to the large amount of information that travellers generate.

"Hotel companies can use this data to personalise every experience they offer their guests, from suggesting local restaurants to finding an irresistible price point. They can also use this flood of data to fine-tune their own operations," he stated.

In the past, the hotel sector has not taken full advantage of this vast data source, as many companies did not know how to make the most of it. But as new developments such as mobile technology, powerful analytics solutions and more user-friendly dashboards become available, companies will be able to hugely expand their capabilities.

For example, Mr Kaul stated that on a person-to-person level, smartphone-enabled staff members can pull up instant information about their guests to alert them to needs or requests and help them respond accordingly.

On a wider level, big data can help hotels save money by cutting back on utilities when the location is not at full capacity. Local factors such as the weather or expected events can also be factored in, so room rates can be dynamically adjusted if a major conference is nearby, for example.

It can also help hotels determine which customers will offer the best lifetime value. For instance, Mr Kaul noted that while a guest on a special, once-in-a-lifetime holiday may spend a large amount in their visit, they are unlikely to offer repeat business. On the other hand, a frugal business traveller may seem like a less valuable customer, but if the hotel can make them happy, they could return on a regular basis for years to come.

By using big data analytics to study trends and identify what customers expect, hotels can better understand what they have to do to deliver a personal service and turn a one-time visitor into a repeat customer.

As well as improving the hotel's performance, a successful big data implementation will result in happier customers and an enhanced reputation for the hotel.

"Big data might still be in the adoption phase for the hotel industry, but it has a lot of benefits to offer," Mr Kaul said. "The data is there; it just needs to be put to work. Hotels that fully leverage it will gain a significant competitive edge."

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