How Data Analytics In Hotel Industry Useful?
Do you make your hotel business decision by just assuming things or using reliable data to make informed decisions?
If most of your major moves are still based on assumptions, like guessing what your customers want, setting prices you think will be profitable, or implementing strategies you think will work, it’s no wonder you’re not seeing the results you deserve.
But don’t sweat it if you haven’t yet grasped the importance of data analytics in the hospitality industry.
That’s exactly what we’re going to explore in this blog so that you can make informed decisions that drive the expected results.
So, let’s dive right in!
The Usefulness of Data Analytics In The Hospitality Industry
1. Help in Revenue Management
Revenue management professionals use different revenue management tools and techniques to identify opportunities for marketing their services to the right buyer through the appropriate marketing channel at a fair price. To determine how competitive a property is in comparison to its competitors, experts monitor various measurements.
In addition to that, different kinds of data, such as current bookings, past occupancy levels, and key performance statistics, can be beneficial in improving revenue management. Aside from accounting, revenue management is one of the most data-heavy departments in hotels. For making decisions through hotel revenue management analytics, revenue managers combine external data like market demand and competitor activity with internal data like historical performance and business on the books to guide pricing decisions, inventory controls, promotions, and demand forecasting.
To measure the effectiveness of hotel revenue management analytics, here are a few key performance indicators (KPIs) that you need to use:
- Average daily rate (ADR)
- Occupancy (OCC)
- Revenue per available room (RevPAR)
- The average length of stay (ALOS).
- Total revenue per available room (TrevPAR)
- Gross operating profit per available room (GOPPAR) can also be used.
2. Improves Guest Experience
In today’s digital age, hoteliers have a wealth of information about their guests. And, using the power of big data analytics in the hospitality industry they can reach new heights of success.
By investing in social media, online reviews, and guest surveys hotel owners and managers can dive deep into customer feedback and experiences to identify their property’s strengths and weaknesses.
Plus by using this data hotel owners can optimize their hotel pricing strategies, identify new market segments, and personalized marketing campaigns and services to increase overall guest experience.
3. Better Competitor Analysis
Staying ahead of the competition in the cutthroat world of the hotel industry can be challenging, but with the right tools, it can be done.
One such tool for competitor’s data analytics is hotel rate shopping tools, using these hotels to compare their pricing strategies to their competitors and find the best pricing for each room type.
Moreover, to get ahead of their online competitors, a few hotel market data analysis tools can help hoteliers get access to valuable insights into the competition allowing hoteliers to identify services and amenities offered by their rivals and how to improve their own.
4. Makes Marketing More Effective
Data analytics is revolutionizing the way hotels approach marketing. By utilizing a data-driven marketing approach, hoteliers can create personalized and targeted marketing strategies that cater to specific customer types. This not only helps to maximize revenue but also creates a more personalized user experience for guests.
Moreover, hotel data analytics can be used beyond traditional marketing channels as well. As you know, currently social media and influencer marketing is the most booming marketing platform for most businesses. Hotels can use data analysis to identify social media influencers who resonate with their target audience. By partnering with these influencers, hotels can amplify their reach and connect with potential guests in a more meaningful way.
5. Providing Better Services
In the hotel industry, mastering the perfect pricing strategy and executing personalized, data-driven marketing is crucial for driving growth. However, even with these efforts in place, a lack of necessary services can lead to a loss of repeat and referral business.
If you want your guests to keep coming back and referring others. To make this happen to provide them with the services they need is the key. And what better way to discover what your guests want than by analyzing their behavior to determine their true desires?
Thankfully, hotels can leverage data analytics to gather and analyze vast amounts of information from their interactions with both potential and existing guests. By doing so, hotel owners can gain valuable insights into their guest’s preferences and behaviors which allows them to make informed decisions on how best to improve their services.
This not only enhances the guest experience but also positions the hotel for long-term success in the fiercely competitive hospitality industry.
Now that you understand the significance of data analytics in the hotel industry. If you want to squeeze out the maximum results two things are super crucial. First, knowing how to hire a data scientist, and second data collection.
So, now you have checked out the sources of data collection for hotels. To get started with hiring check these job descriptions for data scientists and start checking out sources of data collection for hotels
What are the Sources of Data Collection for Hotels?
Here are a few sources that you can use to collect data for data-driven decision-making:
1. Hotel Rate Shopping Tools
These tools allow hotels to monitor and compare their room rates with their competitors. By analyzing this data, hotels can create a data-driven competitive pricing strategy to attract more guests. MakCorps Hotel search API is one such hotel price intelligence solution that allows you to track hotel pricing from 200+ OTAs including Tripadvisor, Booking.com, Expedia, Agoda, and more.
Watch the video below to learn how it works.
2. Customer Relationship Management System:
By tracking guest’s past bookings and purchase history, CRM systems can provide valuable insights into guest’s preferences, including the types of rooms they prefer, the amenities they value most, and their spending patterns.
3. Online Reviews and Feedback
By using a brand monitoring tool and hotel review APIs, you can get valuable insights into your customer’s likes and dislikes, as well as areas for improvement. Analyzing those areas of improvement and taking action to improve will not only exchange guest experience but also improves your hotel’s reputation online.
4. Engaging Target Audience on Social Media
Hotels can identify popular topics and trends and engage with guests in a more personalized way. Plus, creating polls, surveys, and other engaging ways can also be used to get your target audience’s preferences. Even if you don’t have many followers, to get data on the big level you can simply run ads campaigns with the target or look-alike audience.
5. Website Data Analytics
Hotel websites can provide valuable data on website traffic, visitor behavior, and booking patterns. By analyzing this data, hotels can better understand their guest’s online behavior and preferences, allowing them to optimize their website design and marketing efforts.
Alrighty then, now that you’ve got a handle on website data analytics tools that’ll help you gather the data you need for your analytics, it’s high time we dive into what kind of data analysis reports are a must-have for the hospitality industry.
What Data Analytics Reports Does Your Hotel Need?
1. Guest Identification Reports
In the realm of hospitality, there is no denying that the guest reigns supreme. As such, every hotel must place its guest report at the forefront of its priorities. From marketing tactics to crafting bespoke experiences that leave an indelible mark on their memory, hoteliers must take a strategic approach to segment their guests based on key criteria such as age, family background, income, hobbies, and previous purchases.
To truly understand the needs and desires of their target audiences, hoteliers can leverage the power of data analytics. By mining historical booking data, chat logs, reviews, and social media comments, they can create insightful segmented guest reports that reveal valuable insights into what makes their guests tick. Armed with this knowledge, they can then tailor their services and offerings to exceed guest expectations and set themselves apart from the competition.
2. Transaction Reports
Let’s be clear – transaction reports aren’t just for balancing the books. In fact, they can be a goldmine of insights that can help you optimize your hotel’s operations and drive more revenue. By digging into the data, you can uncover which days of the week are your most profitable, which marketing campaigns are resonating with your guests, and which payment methods they prefer. Armed with this knowledge, you can craft data-driven strategies that are laser-focused on delivering the results you want for your hotel. So don’t just settle for a stack of numbers – use them to unlock the secrets to success.
3. Forecasting Report
In data analytics forecasting is often referred to as predictive analysis. It’s totally a game changer for the hotel industry.
By predicting future demand, savvy hoteliers can create successful strategies well in advance.
One of the most widely-used forecasting techniques in hotels is price forecasting. This involves analyzing booking data, customer behavior data, events, and historical pricing data to determine the optimal price for hotel rooms.
But it doesn’t stop there! Forecasting reports can also be used to predict consumer behavior, improve inventory, and ensure product availability. This fancy approach is known as revenue management, and the ultimate goal is to provide customers with top-notch products exactly when they need them.
5. Report on Important KPIs
Well, well, well…looks like it’s time to talk about KPIs (that’s “key performance indicators”). If you want to keep a close eye on how your hotel business is doing, KPI reports are the way to figure it out!
So, what should you be looking at when it comes to KPIs? Here are the most important ones to consider:
- Total number of nights spent (including closed, occupied, and vacant rooms)
- Canceled reservations (let’s hope there aren’t too many of these!)
- Average occupancy rate (a crucial metric for any hotelier)
- Length of stay (how long are your guests sticking around?)
- Lead time (how far in advance are people booking?)
- Revenue per booking (gotta keep an eye on that bottom line!)
- Daily pricing (adjusting prices based on demand, competition, and events can make a big difference)
- By analyzing these KPIs, you’ll be able to get a clear picture of how your hotel business is performing and where you might need to make some adjustments.
You’ve just discovered the essential data analytics reports that reign supreme in the hospitality industry. With this knowledge in your pocket, you’re all set to seamlessly use data analytics in your hotel operations. However, before diving in headfirst, take a moment to familiarize yourself with the challenges and opportunities that come along with data analytics in the hospitality industry.
What are the challenges and opportunities in data analytics in hospitality?
The rise of technology has created new business opportunities and revenue streams in hospitality but has also brought challenges. Data security is a key concern, as hotels store sensitive customer information. Investing in stronger systems and encryption is critical. Backup systems are also important to avoid data loss.
However, the data revolution also presents opportunities for targeted marketing and better understanding of consumer behavior.
When it comes to the growth and success of a hotel business, smart decisions are non-negotiable.
And let’s face it, relying on your gut instinct is detrimental to your business growth.
That’s where reliable solutions like data analytics in the hotel industry are here. This empowers hotel owners and managers to optimize revenue, enhance the guest experience, analyze competitors, and nail marketing to maximize ROI.
By tapping into the goldmine of guest interactions, hotels gain valuable insights that allow them to make informed choices, and continuously improve their services.
Ultimately, utilizing data analytics in the hospitality industry is one of the best ways to come out on top.
So, what are you waiting for?
Hire a data scientist