Using Big Data for Big Improvements in the Hospitality Industry
The hospitality industry, like a lot of other industries, is increasing its use of new technologies. These new technologies are generating more information than the industry has ever seen. This new information creates opportunities—and challenges. Data analytics can help make sense of all the extra information from diffuse sources and put it to good use.
Trends in the Area
External factors like the weather and special events happening nearby can have major effects on the hospitality industry. Data analytics can help companies analyze the trends related to these factors in an effort to set prices and increase profits. One large national hotel chain is using software to analyze data relating to these external factors to set group pricing.
Data analytics can help a restaurant determine what items to include on the menu during a specific time of year based on the weather. For example, certain meals will sell better when it’s hot outside compared to when it’s cold. Restaurants also can analyze which meals are selling well and have the lowest input costs. This helps reduce costs and increase profits.
The customer experience can be improved by having a higher-performing staff. The hospitality industry is all about providing a positive experience for customers so they will return in the future. One way to achieve this is by using data analytics to identify lower-performing staff and provide the training they need to enhance the customer experience. Conversely, companies can see who the higher-performing staff are and benchmark what they’re doing. Data analytics also can be used to determine when more or fewer staff members are needed to help customers without having excess staff, which creates unnecessary cost.
The hospitality industry is susceptible to seasonal peaks that can have a major effect on the bottom line. This has been recognized for years, as people travel more during the holidays. However, there can be mini-trends within those peaks and valleys that may be associated with that particular location. Those trends can be harder to discern. Recognizing these trends can help determine when to raise or decrease prices. It also can help determine when to send out promotions to attract new customers and discounts to attract repeat customers.
Consumers have access to their own technology that helps them find the best deals and best experiences available. As people become more tech-savvy, it’s increasingly important to provide the best experience possible at a good price. Companies in the hospitality industry need to increase their use of proprietary technology to help increase occupancy and profits.
The amount of data that consumers can now access at the push of a button is astronomical compared to what was available in the past. As information continues to be more readily available, companies need to utilize multichannel marketing to promote their image and attract customers. Multichannel marketing uses data to communicate with customers through a variety of channels to promote one consistent message.
Data can be collected from multiple sources. Companies in the hospitality industry have a vast amount of information available through social media, including Facebook and Twitter, as well as sites like Yelp and Trip Advisor. They also can use online reservation tools to ask additional questions about a customer’s stay or experience. Even the point-of-sale system collects data that can be useful regarding a customer’s experience and preferences. Restaurants can use this data to prompt the customer to purchase additional items based on what’s already in their cart. In addition, hotels can promote events in the area to entice customers to stay longer or more frequently.
Companies can use social media not only to collect data but also to distribute information to potential customers. Through multichannel marketing, companies can tailor their message and disseminate it in a way that will result in high levels of visibility across a wider audience.
Big Data & the Customer Experience
Customer desires vary from person to person. During each customer experience, ample data is collected; this massive amount of data is referred to as “big data,” referring to how much information there is and the wide variety of sources it’s generated from. Big data is an amount of data so vast that normal data processing techniques can’t be used to make the data manageable. Data analytics can be used to determine which guests will spend more time and money at a hotel, restaurant or venue, along with which guests want to purchase other related services. It also can be used to determine which customers are likely to return. Staff can focus more energy on these customers by suggesting things to do in the area and anticipating items they may need to ensure they have a positive experience.
Predictive analytics can be used to organize this data in a manner that improves the customer experience and the bottom line. The challenge with all this new data from multiple sources is how to collate and use it. BKD Big Data & Analytics (BDA) works with clients on analyzing that data and putting it to work by enhancing marketing strategies, developing competitive advantages and reducing risk, among other services.
Data will keep creating opportunities for businesses to set themselves apart in the hospitality industry. By analyzing trends in the area, providing new services like virtual assistants and using big data to increase revenue and provide a positive customer experience, data analytics will continue to transform the industry.
If you have questions or want to find out more about how your company can use data analytics, reach out to your BKD trusted advisor or submit the Contact Us form below.