Data analytics and decision making
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“Big data” is the term used to represent the large volume of structured and unstructured data a business collects daily. Companies can gain insights that lead to better business decisions, beat competitors, learn about their customers in-depth, and grow strategically by analyzing big data. According to experts at The Economist, the world’s most valuable resource is no longer oil – it’s data. “Smartphones and the internet have made data abundant, ubiquitous and far more valuable. Whether going for a run, watching TV or even just sitting in traffic, virtually every activity creates a digital trace—more raw material for the data distilleries,” says one report. Big data is totally transformational and impactful for businesses, no matter the industry.”Data are now part of every sector and function of the global economy and, like other essential factors of production such as hard assets and human capital, much of modern economic activity simply could not take place without them,” reports consulting firm McKinsey.
Apart from the data tracked within the Hotels, other data could be analyzed and used in the hotel industry: Air travel data can inform a hotel’s ability to foresee, with algorithms and analysis, slowdowns or upticks in potential room bookings based on flight-booking and arrivals data for, say, the next six months or a seasonal period of the business. Economic trends can come into play in the predicative-analytics space as well. This kind of data can help estimate the effects of a given Euro/USD rate on occupancy, allowing hotels to alter short-term strategies to benefit the most from a change rather than analyzing it after the fact.
Lessons Learnt from Marriot
With almost 7,000 structures worldwide, Marriott International is one of the biggest hotel chains in the world, the biggest (by far) in terms of revenue. It operates in over 120 countries and areas, with a record pipeline of over 470,000 rooms, and continues expanding by acquiring smaller but valuable brands. Its Data Strategy and Governance team implements proactive solutions to provide decision-makers with quick and timely visibility of high-quality data. The ultimate goal is to actually make the guests’ travel experience as smooth and friendly as possible. The company’s main areas of focus are revenue management and customer satisfaction. Revenue management sets optimized prices to get the ideal profit margins. Marriott’s strategy for revenue management is known as “Dynamic Pricing Automation” and enables the hotel chain to accurately predict demand and customer behaviour patterns. Dynamic Pricing Automation needs real-time, precise data from several sources, which are related to local and global economic elements, events and weather information, as well as other metrics. For example, daily rate, cancellation and occupancy, revenue per available room, reservation behaviour, average occupancy rate, and gross operating profit per available room. Through the integration and analysis of all this information, Marriott can forecast customer behaviour, understand how its properties are performing compared to its competitors in the same area targeting similar profiles, and adjust its pricing strategy accordingly and proactively.
Most hospitality companies focus their analytical efforts on marketing. However, that presents only a narrow view of what big data technologies can actually offer. Becoming data-driven increases efficiency and sharpens strategies based on real-time, precise information. Big data can bring tremendous benefits to all departments, not only marketing, and those who will completely embrace it will be those leading the industry in the (near) future.
Finally, with an enormous variety of solutions offered by Data-science, travel businesses could acknowledge their clients’ necessities and priorities to provide them with the best possible services and offers.
