7 ways big data analytics is changing hotels and the travel industry
Over the past few years, big data have gained immense prominence as a distinguishing point in today’s complex, intricate, and competitive business environment. Every industry is using big data so that they can streamline and reshape their businesses and can enhance their growth and profit. Like every sector, big data is also applied in hotel and travel industry. Big data provides insights which are helping the travel companies and hotels to reduce their costs and also help them to adjust to market demands.
Every day the hotel and travel industry caters to millions of customers and each one is different from the others and has their own set of expectations. While some people are demanding and fastidious, others will do simply check in and check out with a minimum commotion. A company needs to satisfy all the customers if it wants to become a frontrunner of this era.
Moreover, the travel and hotel industry is highly competitive. Every one is implementing some robust and concrete marketing strategies in order to grab the attention of the customers. Each hotel and travel company is trying to allure the customers with some lucrative offers to incline the travellers towards them. So, in this steep competitive era, if a company or hotel want to surpass its contenders then it needs to make some stern customized marketing strategies and should try to make content all its customers. Here, comes big data analytics which helps a travel company and hotel to understand the behaviour of the customers, their likings and dislikings, expectations and also help them to identify their potential customers. Once a company or hotel is equipped with all these data, then it can easily make some customized marketing strategies which will help them to ameliorate their business and growth.
In the year 2013-14, Red Roof Inn, an eminent US hotel realized that it can enhance its business as flight cancellation rate was increased day by day, particularly in the Winter season. After doing a rigorous study they have concluded that the number of hotels which are located near major airports can enhance their growth and profitability when flight cancellation rate was nearly 3%. This meant that every day near about 90,000 passengers was being left stranded. Their marketing and analytics team worked together and identified those customers datasets who left stranded on flight cancellations during an unfavourable weather condition. Most of the customers at this time used to search a nearby accommodation by using their mobile devices. Once the hotel accumulated all the data, they launched a targeted marketing campaign to the mobile users who were affected badly due to the cancellation of the flights. This led to a 10% increase in business in areas where they prudently deployed this new strategy.
So, big data analytics is an integral part of hotel and travel industry and plays an imperative role in their growth and success. Below, are the following areas where big data analytics in the travel industry and hotel sector can play an important role.
Real-time Travel Assistance: By analyzing the travel industry data and the past behaviours of the travellers, a travel company can assist which is the best time to visit a particular place or what are the attractions and sightseeing options are there. With its previous data, a hotel can tell the guests the best nearby restaurants, the events, entertainment options for the kids or family members and many more things. The housekeeping staff of a hotel also receives real-time updates and based on that they can tell whether the guests need an extra blanket to stay comfortable in the winter nights or they need a bowl of soup at 1 a.m. Moreover, analytics helps the restaurant department of a hotel to predict which food items are likely to be ordered in a particular weather.
Better Marketing Strategy: By processing individual customer information through data analytics, a hotel and travel company can make their marketing strategies. Does your guest visit your hotel’s spa every time when she stays at your hotel? If not, give her a complimentary spa treatment while she goes for a multi-night booking. By tracking and analysing your customer’s behaviour and actions, you can embrace them with personalized offers which will make them more intriguing. If you are running a tour company and a person tours frequently with your company, then give him a personal touch. In his next tour, give him one extra night in the hotel without any cost. Send a personalized email to your client mentioning that “We know you are our loyal customer, so when you visit next week, we are giving you one-night complimentary stay at the hotel”. In this way, you can go for some personalized marketing strategies which will boost your businesses and growth.
Better Pricing: Big data analytics also helps the hotels to maintain an optimum price of their rooms in an offseason. It won’t be a prudent decision for you if you charge a higher price for a room in off time because it may not be sold. Similarly, during the pick season, holiday time or special events time, you can easily increase the price of the rooms because the demand is quite high at this time. So, you can keep your price higher than the normal. Hotels like Marriott, Starwood Hotels, etc. are investing a chunk of money in data analytics so that they can decide the price for their rooms depending on the occupancy rate. Marriott is using GPO (Group Pricing Optimizer) to decide the rate of the rooms for group inquiries.
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Generating Sense From Customer Ratings And Recommendations: These days customers are very active as compared to the older time and they ardently participate to the social media sites and blogs and give feedback, reviews, and ratings of the hotels and travel companies. The data that are captured and analyzed by hotel analytics software will ensure that the hotel and travel industry get a better insight of the customers and take appropriate actions based on that. Thus, predictive analytics in the travel industry will help you to determine a pattern based on observing customer’s behaviour. You can get an idea how much a customer is spending on what items, what he wants to buy and how much he can afford and what are the best channels ( web, mobile, e-mail) by which you can reach him. In this way, hospitality data analytics can remove the guesswork and help to reach your potential customers. Denihan, a prodigious US hospitality group uses IBM’s analytics and stockpiled massive amounts of information from the customer feedback. They have an adequate knowledge of room price, why the travellers choose them, their length of stay and many more imperative information. Denihan uses all these insights and created strong and effective marketing campaigns to engage customers on an individual basis.
Customer Segmentation: Data analytics also helps the travel and hospitality sector to identify their loyal and repeat customers and thus, gives them an opportunity to design special offers and benefits like personalised services, targeted messages, special offers, add-on facilities and value-added services to the customers. In this way, a hotel or travel company can strengthen their relationship with loyal customers. This will also improve their customer retention rate as the companies are now targeting the customers through personalised service offerings. Nowadays, every customer is looking for customised services so that they can feel privileged. Data science in travel industry provides enough information to the hotels and travel companies to understand the nature and preference of each of the customer. Thus, flexibility within the sector is also enhanced as companies are deploying data analytics.
Social Media Analysis: These days social media has penetrated into every sphere of life. Customers are using social media sites in various aspects like enhancing their information about the hotels, giving feedback and recommendations, participating in any discussion or events or giving any kind of suggestion to the hotel or the travel company for their betterment. By gathering all this hospitality industry data, a travel company or hotel can go for an in-depth analysis and can make customer profiling based on the information (income level, family status, age, preference, travel history, expenses, etc.). The company can use customer profiling to make an e-mail list for targeted marketing of both the current and prospective clients. Customer profiling is also important to determine which market segments are most productive and lucrative.
Better Expense Management: Running a business is not at all a facile job. A lot of expenses( infrastructure, equipment, maintenance, etc.) are required to run a hotel successfully. Any outage or breakage will not only give you a huge loss but also tarnish your reputation and brand value. Thus, big data analytics for hotels helps you to take preventive measures and take necessary steps for any break-ups and failures in advance. This will also help you to intimate your customers directly in any delay of services.
These are some instances where big data analytics in the travel industry and hotel sector help the companies to make some powerful decisions based on the insights of the customers’ data and information. Over the past few years, you have seen the astounding growth of the smartphones and internet and now, the travellers love to collect all the information about a hotel or a travel company before going outside. So, the future of big data analytics is very scintillating for travel and hotel industry and this will work wonders for these industries.
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