Personalization in the Hotel Industry

HSMAI Rising Revenue Optimization Technology & Data Workgroup*

Personalization has become a key strategy to attract and retain customers. The hotel industry lags behind other industries such as airlines in regards to applications of personalization largely driven by limited data and disconnections between insights and application. The HSMAI Rising Revenue Optimization Technology & Data Workgroup researched the issue and brought their findings to a joint meeting of Rising Leaders and Advisory Boards for discussion. They found personalization in the hotel industry poses as a large and largely untapped opportunity especially in the area of improving customer experience and increasing profits.

Key Takeaways:

A good CRM system is the current main system used for personalization
Clean data is needed in order to generate accurate insights and findings about customers
There is a focus noticeable difference in how big brands and independent hotels are using personalization driven both by scale and data availability
Many companies have data available that is not being leveraged that represents revenue opportunity
Remembering who the end user of the data and reporting provided is key to ensure that insights are actionable and understandable

Current State of Personalization

Each hotel has unique offerings which can be leveraged to serve an optimal customer experience. When reviewing where data was currently being used for this purpose, a number of themes came through around both usage and gaps.

Current applications of data:

Email marketing with updates
Guest services pre-arrival, in-house, and post departure.
Existing integrations, some better than others.

Challenges of leveraging data:

Segmentation is standardized across the industry with limited flexibility for new views of customers

Lack of flexibility in personalized pricing due to rate parity laws
Cross system analysis due to legacy systems- often attribute and ancillary revenue is not integrated with room revenue

Best Practices

When it comes to optimizing pricing and creating a strategy, targeting can be key to unlock incremental revenue from a static set of perishable rooms
For group bookings, leverage data to understand expected total spend and behavior in order to price based on the groups sensitivity and expected displacement
Don’t wait for the purchase to act- by understanding early indicators of interest, conversions can be completed improving overall occupancy

Personalization beyond CRMs

What is the gap leading to lack of data with hotel? What is driving behaviors? Staff is doing a lot of manual work right now to manage marketing execution and operations. While some new CRM platforms provide micro-segmentation capabilities, the ability to action on these segments and findings is misunderstood. Legacy platforms don’t have the integration and there is a lack of data about the hotel, hotel rooms, and offerings itself. Minor modifications in each of these areas are what is required to unlock these capabilities. There are a number of personalization providers that are working across the hospitality industry to unlock value through a number of use cases- the potential to do the same with hotels is both feasible and expected in the coming years based on customers’ expectation of companies tailoring themselves to their needs.

Dream CRM

The goal of a CRM is to build a customer profile that integrates cross system data and insights. The goal being to understand what each customer prefers in order to both predict behavior and also to intervene with the most relevant content.

*HSMAI Rising Revenue Optimization Technology & Data Workgroup

Emma Scher (Co-Chair), Consultant, ZS Associates
Yvonne McDowell (Co-Chair), CRME, CHDM, CHBA, Revenue Manager, Kaanapali Beach Hotel
Danielle Wurtzell, CRME, Area Director of Revenue Strategy, Remington Hotels
Anthony Rose, CRME, Director of Sales, IDeaS Revenue Solutions, a SAS Company
Natalie Fournier, CRME, CHDM, Area Director of Revenue Strategy, Hyatt