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,, 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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Coming up in June 2019...

Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.