Data is the architect of astute business decisions and the key to unfurling market strategies.
NB: This is an article from OTA Insight
High-quality data provides insights into the new reality faced by many businesses, such as understanding emerging trends, and quickly understanding changes in consumer behaviour. Some hotels have questioned the use of data in this current climate and are faced with a million-dollar question: is historical data obsolete?
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Companies are trying to broaden the spectrum of data collection; collecting data through multiple sources that can help create more accurate predictions and prescriptions for better business management.
Businesses are looking towards future data to provide relevant signs that can help them make better decisions. The timeline to a full recovery across the globe is still clouded and requires hotels to have a sharper focus on forward looking data. As we move into recovery and growth in 2022, intelligence from future data trends is going to become the mainstay of business decision-making.
There is an abundance of data available to hotels: customer data, market data, booked data, guest stay data and more. Several sources contribute to this data pool which is consumed by hotel companies, chains, and independents alike, which brings up key questions, including:
- How do hotels use this data?
- How is it accumulated, and from where?
- How is it processed?
- How is it consumed, and in what format?
There are also multiple sources in the external environment, but hotels face challenges in aggregating external data and developing analytical insights from it. It has led hotels to be heavily dependent on internal data from reservations and guest stays, which has contributed to the knowledge they have of their customer base. Data-led insights have allowed hotels to curate and cater products to their loyal customers and extend their brand equity. It has also helped them to create and manage demand in the most optimal manner.
Hotels depend on data to make meaningful decisions. However, data analytics must go beyond facts and figures. The intention is equally critical, namely, ‘Why and what has been the customer’s journey?’ This deeper insight adds much needed context to the data.
Booked data and guest stay data allow hotels to build a narrative using different methods of analysis. In summary, business intelligence tools help us navigate the diagnostic and descriptive analysis, while revenue management software helps us with the predictive and prescriptive analysis.
- Diagnostic Analysis
- Providing information as it is, of what happened to the business results through graphs and other techniques.
- Descriptive Analysis
- It helps diagnostic analysis look better by telling a story. A root cause analysis leads to answers of peaks and troughs of losses and gains in market share performance. Simply, why did it happen?
- Predictive Analysis
- Prepare forecasts using machine learning and forward looking data, or other models primarily based on historical data.
- Prescriptive Analysis
- It makes the best use of predictive analysis. It is awareness of future demand levels and forecasts. Prescriptive analysis helps to apply the best price, LOS, and availability restrictions to create the best yield for the operation.
In the current climate, there is a need to go beyond historical data analysis. Robust business intelligence incorporating future search data and pre-booking trends is needed to provide better guidance through analytics. The above-mentioned analytic types do not consider future data of different consumer groups, sources of business and platforms. It limits insightful decision making. Hotels not adopting solutions that provide these services will be unable to optimise their results.
Forward-looking data sets
Destination Search Data
Business intelligence of searches on OTA platforms, search engine, and alternative accommodation platforms will help hotels understand not only destinations that are gaining priority, but also:
- The products and room type customers seek.
- Preferred length of stay.
- Critical guest experiences.
It will help hotels to act quickly on their pricing, curate products and offerings that attract a potential customer base and newer markets, and stay agile with their marketing strategies.
Meta and OTA Search Data
Business intelligence of searches on meta and OTA platforms will help hotels understand customer preferences with ratings, features, services, safety, and offerings. When married with destination search data, it tells a story of the product types that find favour with customers and provides insights to revenue managers on pricing and product placement. It also provides opportunities for revenue managers to collaborate with the marketing team and curate products, which have the highest visibility and best chance of purchase.
Travel Search Data
Business intelligence focusing on searches for flights is indicative data which is capable of predicting future demand levels. The potential volume of demand can help hotels formulate forward-looking strategies. This data will always remain critical for developing forecasts, predicting seasons and establishing emerging trends.
Are hotels satisfied with just one competitive set? Not really. Hotels define multiple competitive sets to monitor performance. What if a hotel was to tap into market data and use a dynamic comp set to get a better understanding of strategies deployed in the market? What if the measurement criteria also included alternative accommodations? A quick scan of the market in current times tells a story that traditional competitive conditions have changed. The need of the hour is to widen the scope of the traditional CompSet to compete effectively.
Expanding the customer journey
Hotel companies have long tried to manage the customer journey from booking to arrival and through the stay, with the cycle then repeating. Multiple touch points along the way help hotels digest and process the customer data and use that information to develop future strategies.
Digital marketing broadened the scope of the customer journey and gave access to the data that was being actively searched by consumers on various platforms. It helped hoteliers to develop more relevant marketing and advertising campaign strategies. But was this enough?
A customer searching for destinations, holidays, hotels, and alternative accommodations has access to various platforms in their palm. These platforms could be search engines, meta platforms, online travel agencies, online review sites, vacation rentals and others. A scan of pre-booking data tells us a story of customer behaviour. It highlights emerging trends, and that is now critical to driving business growth. Broadly collected pre-booking data reflects the intent of the customer:
- Are hotels able to monitor touch points beyond their circle of influence?
- Are hotels able to aggregate data from different platforms?
- How best to use this information?
Hotels must start looking at data that goes beyond booking information. Search data can provide a sense of emerging trends and power a hotel’s requirement for accurate forecasting, as historical data is unreliable in the current environment.
Predict and prescribe
Future trending data has the power to end the speculative forecasts that many hotels have ascribed to during the last many months. Analysis based on ‘news’ and half-baked information leads to guesswork. With the industry shunning talent due to costs, it further complicates the recovery path for many. Hoteliers can still make qualified and optimal decisions but require solutions that provide accurate market intelligence about future trends.
- Agile decision-making – Spot shifts in traveller demand from different source markets, target much-needed revenue opportunities and optimise marketing spend. Look for the right predictive intelligence solution that can also assist to qualify domestic demand and tailor your strategies accordingly.
- Integrated Tech-Stack – Fine-tuning pricing across newer segments and catering to pent up demand correctly requires high-quality rate shopping data. Identifying and acting on demand trends before the competition could be the difference in maximising revenue in recovery.
Pre-booking data alone cannot give hoteliers the magic forecast numbers they are looking for – yes, this is powerful enough to help you create some scenarios and make meaningful projections. It will also assist to a degree, in defining future marketing and product strategies, and cater to customer groups that went unnoticed earlier.
However, the times have changed. Hotels need to embrace forward-looking data in decision making across the spectrum of commercial functions. Forward-looking data presents an accurate depiction of future demand, enabling you and your team to forecast and deploy strategies to capture changing demand ahead of the competition.