Is Your Hotel's Best Currency Found in an Exabyte?

By Bonnie Knutson Professor, The School of Hospitality Business/MSU | September 15, 2013

How many of you have mailed in one of those pesky little subscription cards that fall out of every magazine? What about ordering something over the phone? Or on the Internet? Hotels, airlines, Amazon.com, and about every brick and mortar shop fill a lot of orders via their web sites. I'll bet most of you have completed a survey or customer warranty card and returned it too. And then there are charge cards and QR-Codes. One swipe of the magnetic strip through a store's scanner and you are paid in full. One click of your smart phone's camera and you are transported to more enticing product information. Yep. Everyone – businesses, non-profits, and even government agencies – are making it more convenient for us to spend money. They are also doing something else. They are making it easier to collect information about us – about what we buy, about what we want, and about what we do.

Consumer information is today's business currency. And it is your hotel's currency as well. Whether you are a mega-resort or a small bed and breakfast, knowing more about who books your hotel, and why, will help you focus your marketing and operational strategies. You can better target high potential prospects, tailor your products and services to meet individual guest's needs, improve satisfaction and loyalty, and even find opportunities to develop innovative offerings. And with new technologies and databases, it is easier than ever for managers to capture valuable information about their guests and potential guests.

These duel trends have interjected two new terms into our lodging lexicon: Big Data and Analytics. Big Data is simply a collection of large, complex data sets that are hard to process or manage with traditional data processing tools. Yet, Interactive Data Corporation (IDC) says it is imperative that organizations focus on the ever-increasing volume, variety, and velocity of information that forms Big Data. The soaring volume of data comes from diverse sources – historical transactions, current business activity, social media, lifestyle trends, ad infinitum.

With so much information available about and potentially affecting your hotel business, how do you determine what is relevant to create value for your investors, your employees, and your guests? The variety comes for all kinds of formats - REVPAR, operational costs, e-mail text, social media, employee feedback, third-party research, comment cards, and traditional guest surveys, and a million other places. In fact, IDC estimates that 80% of any organization's data is not numeric. Just think about your hotel. Are guests re-arranging chairs in the lounge area for conversation? Is food being left on the plates? Is Housekeeping getting calls for more towels or amenities? Whatever the source, all information still must be included in Big Data analysis. Now, think about the speed at which data are being created and must be gathered, processed, and analyzed for your management decisions. While estimates vary, most believe that the world's data double every two years.

The IDC study predicts that overall data will grow 50 times by 2020, driven not just by your normal business activities or even by the Internet, but by new technologies that can be embedded into clothing, buildings, vehicles, and key cards. And even key cards may be a thing of the past. What will be the impact on your hotel? Will new employee uniforms have implanted sensors? Will all your doors be retrofitted to detect movement of employees and guests? Will your new shuttle vans be equipped with check-in and check-out capabilities? And, what will be the cost in terms of purchasing, training, and public relations?

A point of trivia: As of 2012, limits on the size of data sets, that are feasible to process in a reasonable amount of time, were on the order of exabytes of data. One Exabyte is one quintillion bytes of information or 10 to the 18th power. That's a lot of information.

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Guest Service: A Culture of YES

In a recent global consumers report, 97% of the participants said that customer service is a major factor in their loyalty to a brand, and 76% said they view customer service as the true test of how much a company values them. And since there is no industry more reliant on customer satisfaction than the hotel industry, managers must be unrelenting in their determination to hire, train and empower the very best people, and to create a culture of exceptional customer service within their organization. Of course, this begins with hiring the right people. There are people who are naturally service-oriented; people who are warm, empathetic, enthusiastic, pleasant, thoughtful and optimistic; people who take pride in their ability to solve problems for the hotel guests they are serving. Then, those same employees must be empowered to solve problems using their own judgment, without having to track down a manager to do it. This is how seamless problem solving and conflict resolution are achieved in guest service. This willingness to empower employees is part of creating a Culture of Yes within an organization.  The goal is to create an environment in which everyone is striving to say “Yes”, rather than figuring out ways to say, “No”. It is essential that this attitude be instilled in all frontline, customer-facing, employees. Finally, in order to ensure that the hotel can generate a consistent level of performance across a wide variety of situations, management must also put in place well-defined systems and standards, and then educate their employees about them. Every employee must be aware of and responsible for every standard that applies in their department. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.