Leveraging Reservation Data to Take Back Your Guests

By Nicole Adair Corporate Director of Revenue Management, SHR | October 28, 2018

I think it's safe to say that no one reading this article has a marketing budget that even comes close to that of the big online travel agencies. But what we all do have is our guest and reservations data already sitting in our systems, and this can provide a wealth of insight that can be both utilized in forming rate and distribution strategy, as well as for hyper-targeting marketing efforts. The key is to use the treasure trove of information hoteliers already have at their fingertips that can be analyzed and acted upon for solid, measurable contributions to the bottom line.

You as a hotelier have the ultimate competitive advantage in that you own the guest's experience as soon as they walk through your doors. Just as you have an obsessive focus on customer service, so too should you emphasize to your team the importance of collecting info that can be used in the future to better deliver appropriate offerings to the guest. True, much of the data collection and reporting options available to hoteliers today can seem intimidating, but there is so much insight to be derived simply from analyzing your reservations data, it's very much worth your time and effort.

By combining segmentation data on booking and stay behavior with your knowledge of each guest's on-property experiences and preferences, your hotel can maximize your marketing efforts while at the same time capitalizing on guests that arrive at your hotel via other channels. And with proper forecasting and the ability to layer in business where and when it is needed based on thorough understanding of your reservations data, your hotel can also increase its bottom line without the frustration that comes with feeling like you have to compete with any specific channel.

Deciphering the Reservation Story

Think about the amazing story that a single reservation tells. You know how far in advance your guest booked and through what channel. You know how long they stayed, how much they paid for their room, and hopefully how much ancillary revenue was captured. In aggregate, your reservations tell you what room types and even which days of the week are popular with which market. By looking at the rate code data, you get a clear picture of arrival and stay patterns, right down to which markets and sources are most likely to cancel.

That is a lot of knowledge! Let's break it down and start with the key piece of information that only your property has on a guest, even if they didn't book direct, and that's the total value of each guest. The most valuable guest is the one that brings the most profit to your bottom line, not necessarily the one that brings in the best room rate. As the focus continues to shift away from revenue per room and toward gross profit, this number has become more and more important. From a property marketing perspective, this number can be utilized for marketing efforts such as targeted email campaigns. But the average revenue per guest, totaled by rate or market code, can also be a useful metric when deploying allotments or making decisions in restricting distribution. You may even find that some of your higher-spending guests are coming from such channels as third-party packages, which could get lost in the shuffle if strategy is too focused on minimizing non-direct bookings.

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The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.