The Best Hotels Innovate By Collecting And Levering Data
June 2, 2019 To compete with big data platforms, hotels need to understand their comparative advantage: property and operational ownership.
A lot has been said about the data revolution; some assure that data is the new oil of the world. However, many times, when people talk about big data, they are referring specifically to the digital economy. The idea is pretty straight forward: as people navigate through the internet, all of their characteristics and steps in the digital world are recorded. This information is then used by different businesses to generate higher value by identifying customer needs in a more precise way.
Of course, what analyst say is true and thanks to all the data collected every second today, customers have access to better products and services. On the other hand, it is necessary to remember that most of the value generated in any given economy is still coming from traditional tangible businesses. How is the data revolution benefitting them? To answer this question, we are going to look closely at one of the most traditional industries: hospitality.
During the last couple of decades, the industry has gradually integrated systems to facilitate their day-to-day job, like CRM or online booking, however, there does not seem to be a proactive and strategic use of the data they collect. But, what do we mean by proactive and strategic use of the data?
About ten years ago, Airbnb was founded and disrupted the whole hospitality industry. All of a sudden, having a hotel did not mean high up-front investments. Everyone could sign up and register an extra bedroom in their apartment as a mini hotel.
The impressive company’s growth is highly attributable to its data leveraging strategy. Airbnb knows the gender, age, search history, previous destinations, satisfaction, and even with how many people is each customer frequently travelling. After they collect all of this data, they can offer better deals to guests and suggest host changes that would make their property more appealing.
To compete with all these data, traditional hotels need to understand their comparative advantage: property and operational ownership. Unlike Airbnb, hotels can change anything they want within their property or allocate their staff in a certain way if they think it would increase the value for customers. For example, they can change the music in the bar accordingly to the age of the people there; they can change the menu at the restaurant if they know there are many families with small children, or allocate staff to different facilities given their real-time usage.
A first option is to ask their staff to record what is happening in real time in the property. For example, at the check-in time, the receptionist can register the approximate age, food restrictions, gender and ethnicity of the guests. Similarly, staff in charge of the different areas of the hotel can record how many people are in their given area at any given time: how many people are in the pool, at the tennis court, at the ping pong table, at the bar, at the restaurant, etcetera.
The problem with this approach is the increase in the responsibilities of the staffing who probably already have their hands full. It is also a very repetitive task that at the end could reduce the value added by the employees because they stop doing some of their previous responsibilities that were directly related to the area they oversee. Finally, a new unit has to be created to collect and make decisions around the collected data.
Kiosk apps allow any business to put devices across their property so that the guests interact with them and automatically register some useful information. For example, hotels can position one of them outside their different facilities to check guest in. Here are some of the most used kiosk apps in the market. After the information is collected, businesses can program notifications and act on them to improve the guest experience. For example, if the bar accesses maximum capacity, more staff can be sent to the bar, and additional area can be used as an extension of the bar.
This approach seems cost-effective and straightforward, however, at some point can become obnoxious for guests that need to interact with a tablet at every moment of their vacations.
Finally, hotels can use sensors to automate the collection of data without asking the user to enter the information herself. Sensors are highly advanced devices that can register information like temperature, infrared radiation, contact, proximity, etcetera.
One exciting recent development in sensors technology is the usage of cameras to register the information that is being recorded in the image. A given camera sends an image, snapshot, to a computer that after analyzing it returns a count of the objects. With this technology now a traditional hotel can answer questions like the following automatically:
- How many people are in the pool in a given time?
- Are they mostly men or women?
- Which events drive my customers to the bar?
- What happens if I change the music in the bar, do people stay longer?
- How often are elevators full?
- When should I pick up the food I deliver through room service?
- How much time are people spending in the different facilities of my resort rather than outside of it?
- Are my guests traveling light (number of bags)and how does that define their stay?
- How much staff will I need next week?
If this type of technology is implemented, hotels can fundamentally change their organization to be prepared for the competitive environment. They can become dynamic organizations that change what they need when they need it and as need it