Your Library Card to Hotel Data Dominance?

The latest study by Forbes (PDF) on the effectiveness of so-called "predictive anylytics" tells us of a very positive satisfaction quotient. The report entitled; "The Predictive Journey: 2015 Survey on Predictive Marketing Strategies," says the technology has arrive to deliver real ROI. For hoteliers though, the second part of the report bears witness to a hospitality reality. According to Forbes only 13 percent using these methods consider themselves "competent" with said capability. The bottom line being, hoteliers are behind the curve. Here's a little primer on how some will catch up, and quickly.

I've discussed the conundrum of Big Data quite a few times. We've talked briefly about yield management, the coming mobile feast of data, and even touched on some tools with great potential. In the final analysis though, it's the "data" that will be the quintessential value for your business. Or rather, the actions that business intelligence powers will render the ROI Forbes hints at. This time I'd like to discuss the libraries and databases of vital hospitality data, and review what some key industry experts have to say about hotels supercharged by the right analytics.

The History Section – STR Global
50,000 plus hotels participate in STR Global's performance surveys. This represents a vast historical section of the overall library of world data on hotel performance. Predicting future trends and demand, outlining strategies for hotel properties going forward, it's becoming more and more improbable without such key intelligence. I hope you'll excuse my metaphors, but what's good for any business intelligence strategy, is also good for the hospitality industry. Using STR data, individuals or chains can fairly quickly forecast destination numbers that can power actions such as investing, infrastructure improvements, and especially future demand quotients.

For an insider's take on how STR Global fits into the overall hotel operations menu, I asked Managing Director CTO Michael Heinz at Snapshot GmbH, how coming analytics tools will use such libraries to power decision making. Here's what he had to say:

"We strive to leverage state-of-the-art cloud technologies to allow hotels easy, customizable and affordable access to data. Once Hoteliers realize this opportunity and learn to embrace and apply this to everyday business challenges, a whole new world will itself open up not only for the hotel users, but also for vendors like us."

As you can imagine, all this technology does not simply become static and stoic, but instead new capabilities are continually powered by innovation. Take for example visualizations like Think with Google is already powering user data with. The image above shows how consumer demands, in near real time, can be very quickly formulated, illustrated, and at last acted upon. Think about the right library of data, the right algorithms, powering the right visualization dashboard, rendering the right hotel operations decision process.

Social Sciences Section – HVS Library

HVS provides key data and research on everything from investment banking to risk management. The library also contains invaluable research and intelligence on hotel operations, market overviews, and much more. Interested hoteliers can glean anything from distressed hotel properties to who is building a big hotel next door next year. The service is a bit like the social sciences section of a major library in that, a vast and arrayed storehouse of highly useful industry is readily available. The value for hotels is clear, but in order to better establish this I contacted the author of the most recent Hotel Bulletin, Russell Kett. Here's his insight into the market, a prelude to the coming Q3 report he says will further the dominance of a very few hotel players in the the budget sector in the UK. I know you'll find the takeaway here: "As for positioning a new brand in the UK budget hotel space in competition with Premier Inn and Travelodge, this would indeed be a real challenge given their existing dominance (60,000 and 37,500 rooms respectively). Holiday Inn Express has 15,700 rooms in the UK followed by Ibis with 8,500, so any new entrant needs to be able to offer a differentiated / distinctive product (to get noticed) and critical mass (sufficient sites) to be able to make any form of serious impact."

So the value of such data is easily stated, if not packaged in a stunning mobile toolset, only the best will survive in such as competitive market. Would this be helpful for your 3 star independent hotel plans?

Math & Economics – A Euromonitor Specialty
One of the most widely used market research tools, Passport is yet another storehouse of data on consumer spending, trends, country data, and a wide array of demographics both at the macro and micro level. In hospitality the service gives a window into the vastness of countries and segments of every size and shape. Users should be warned too, when I say "vast" I mean nearly limitless. And with limitless data come associated filtering problems. That said, Passport is a vital resource. A good example of this is found in the most recent country report on Russia.

Given the highly publicized ruble depreciation, and the west-east friction in the wake of Ukraine developments, effects are being felt inbound and outbound in travel. Interested hoteliers inside Russia, for instance, are served well in knowing of better utilization of online travel bookings etc. Put simply, a hotel business in Vladivostok can no longer afford to rely on foot traffic or traditional travel agencies. The report speaks of social networks playing a role now, and online entities like Travel.ru and OneTwoTrip being pressed by Airbnb. This kind of "evolution" is something I asked revenue expert Tomasz Janczak, Director of E-Commerce & Distribution at Plateno Europe about. Here's what he had to say about future decision making:

"Hospitality management changes the way the marketing and price management proceed. In my experience, I've paid notice to the evolution of the decision processes, from analyzing the previous years data, than adding competition rates, and market demand etc., and so on. Today technology supports hoteliers, but the market also changed and there is much more data to be analyzed. Therefore, one major key to harnessing all these variables is a single dashboard that will present all available information integrated into an easy to understand format. The problem now is not a lack of data, but the means to harness it."

In the Stacks – The Rest of the Massive Library Catalogue
The list of repositories is as long as you are, obviously. From the online services of Mintel, to the local hotel databases where a treasure trove of loyalty and other data reside, it safe to say we'll not go backward in learning about our hotel guests any time soon. In order to summarize, let's return to the Forbes report briefly. In the piece the authors quote a professor of management and marketing at Yale, Ravi Dhar, on predictive analytics becoming mainstream. Dhar contends the common denominator for all businesses will be, being able to "predict what it would take to encourage a desired customer behavior." Other valuable takeaways will include (according to Dhar) "optimizing prices, identifying customer needs more appropriately, gleaning from machine learning, pricing analysis, unstructured data analysis, text analysis, social media and ultimately predicting what customers will end up buying."

For hotel marketing heads and other managers the most relevant metric to be gleaned from the Forbes report is the tiny fraction of high level marketers that reported an actual decline in ROI via the use of predictive analytics. Even at this early stage of the game the report shows only 1% of those queried lost a measureable return after initiating predictive marketing. At the other end of the spectrum, some 36% gained ROI by 10 to 50% or more. All in all, 56% saw an increase of 1-10% after instituting predictive marketing strategies. What this means in a nutshell is, predictive business based on key analytics is a no brainer, if you'll excuse the term.

I hope this abbreviated card catalogue is of help. Next time we'll investigate how hotel owners are handing the transition to operations powered with these new business intelligences.