Technology : Big data
For starters , the convoluted distribution landscape makes the idea difficult to execute , especially when factoring in other sellers outside of the internal sales mechanisms .
“ The number-one problem is the state of the distribution environment , or the lack of flexibility in that environment ,” explains Brad Beakley , senior vice president of commercial operations for Carlson Rezidor Hotel Group , Minnetonka , Minnesota . “ You have a world where , in relatively large chunks , we ’ re distributing through OTAs , and every one of them has a unique way of receiving our rates and content . We add goodies to the deal and they may or may not , and in most cases are not , able to present those when you want and in the fashion that you want . In a lot of cases in the OTA space , they may want to claim those goodies as things customers are getting from them , versus from the hotel itself . There is also the travel agency community and the GDS . In many ways they are trying to compete with the OTAs , and one way they can do that is to build functionality and capabilities that the hotel operator wants .”
The up-sell Another major potential use for big data is increasing levels of guest personalization and marketing , wherein the specific information amassed on each guest is utilized to both better serve that guest , as well as drive incremental revenues by offering the guest custom-tailored promotional opportunities , whether it ’ s on rate and room type in the booking stage , or with added services once that guest arrives on-site .
“ A lot of it is what sorts of things you should be offering for sale , in terms of up-sells and cross-sells ,” says Robert Cole , founder and CEO of RockCheetah , Menomonee Falls , Wisconsin . “ A lot of offers turn out to be ‘ show them the lowest price ,’ and that ’ s it . That ’ s not the best value ; it ’ s the deluxe room , which is only US $ 25 more a night , but you get 50 % more square footage , and it ’ s on the concierge floor and you get snacks and drinks . That ’ s what you should lead with for certain types of guests … At resorts you ’ ll see a room is only US $ 200 per night , but the golf package is unlimited rounds and covers green fees and cart rental for US $ 100 more a day . That ’ s an amazing deal , but how do you communicate that to the guest properly and work through that ?”
Also falling under this domain is the industry ’ s current focus on using customer data in on-the-fly , location-based “ push ” marketing to mobile devices . An example is instances where theoretically , a patron in the bar gets a drink special sent to their phone , since that phone ’ s GPS has communicated to the hotel that the guest is now located within the bar . Usually in theory , that offer may be for the guest ’ s favorite drink , which the hotel knows through big data . Some experts are growing increasingly critical of the above concept , though .
“ The other thing we ’ re always tempted to do with big data , and it ’ s where we make a lot of mistakes , is in the one-to-one offer ,” explains Kelly McGuire , executive director of the hospitality and travel global practice at business analytics develop , SAS Institute . “ I ’ ll hear examples like this : ‘ Kelly stayed with us before and she always has a glass of red wine in the bar , so when she walks by the bar , I ’ m going to send to her phone an offer for a glass of red wine .’ Why would you do that ? You know I ’ m going to buy it . Why are you going to give me 10 % off a glass of wine when you know I ’ m in there anyway ? That ’ s stupid . You ’ re just losing 10 %.”
What would be more effective would be to take the information on the customer one step further , and identify what the customer would also like in addition to their usual preferences , and they just don ’ t even know it yet .
“ Is there something else you want me to try to go with the red wine ? Do you have something additional ? Don ’ t give me an offer for something I ’ m going to buy anyway ,” McGuire says . “ Think it through . It ’ s an execution issue and that drives me nuts .”
Driving the ROI Experts agree that beyond just finding meaningful uses for data , the cost of contemporary big data analytics architecture for hotel companies is perhaps the largest hurdle for progress . The issue is compounded by the frequent
“ Is there something else you want me to try to go with the red wine ? Do you have something additional ? Don ’ t give me an offer for something I ’ m going to buy anyway . Think it through . It ’ s an execution issue and that drives me nuts .”
– Kelly McGuire , SAS inStitute
48 HOTELS December November 2015 www . hotelsmag . com