“How Big Data and Analytics Are Changing Hotels and
The Hospitality Industry”
Technology
is constantly improving to help companies and sectors increase profits and
enlarge their customer numbers. An article in Forbes written by Bernard Marr, “How
Big Data And Analytics Are Changing Hotels And The Hospitality Industry”, tells
readers how Big Data helps hotels and the hospitality sector, which has
millions of travelers a day, understand exactly who they want to stay at their
hotel and what they should do to increase their performances.
This
article distinguishes many remarkable points. For example, surprisingly a
business does not look at a customer who spends a lot of money at once, but
customers who are frugal. The customer who is spending a lot of money at once
is mostly likely going into retirement and will not be spending a lot forever.
The frugal customer however, if happy, will more likely return when on business
trips and therefore have a longer value. One example is Red Roof Inn because they
realized that having a hotel by an airport can increase customers. Just by checking
the weather to predict any flight cancellations the marketing team works to
make sure customers see their hotel when stranded. Another example, is how Starwood
Hotels and Resorts dictate their room pricing by analyzing weather reports to
see how much a customer will be willing to stay in the Caribbean or vacation
area. Starwood Hotels and Resorts has been able to increase revenues by almost
5%.
After
reading this article, I am impressed with how the hotel and hospitality sector
are able to increase their customers. However, I am still left with some
questions and thoughts I felt this article missed. Can Big Data create an
oligopoly? Gary Hawkins a writer of the Harvard Business Review article,
“Will Big Data Kill All But the Biggest Retailers?” believes that since not all
retailers have the resources to keep up, soon there will be less and less
competition. Also, if one lives in a warm area and wants to go to the Caribbean
does that mean they do not get as good as a price as someone living north of
them? If that is I think that seems unfair. Lastly, will hotel loyalty programs
still be as effective? There are many sectors using Big Data, and I look
forward to seeing how the hotel sector will excel in enticing customers to stay
at their chains.
I have to agree with lauren, by stating that technology is changing all industries in a positive way. Also, how the big data will cause a major gap in the industry by separating the major hotel chains to the small bouquets.
ReplyDeleteI believe that using big data and analytics to please their guests is a good use of data for the hotel industry. It is important for them to know their market to increase revenue. However, I was disappointed to read that they price their rooms according to the weather. If a guest would like to go south to the Caribbean and the north is experiencing a bad winter with lots of snow the hotel will price their room at a higher rate. A rate they believe the guest would be willing to pay. I don’t believe this is fair and I wonder if their extremely high prices are causing people to turn away from them thus making them lose more money in the long run. I do understand seasonal rates but to take advantage of consumers because of bad weather seems greedy. The seasonal rates should stay the same no matter what the weather and hotels should eliminate this data when pricing rooms.
ReplyDeleteUsing big data in hotels is the only way for them to stay on top of the competition. Hotels need to know what is happening in certain areas where the hotels are located to predict how busy or slow business will be. The only thing that I do not like this data is that it knows which customers will be going into retirement, and with that mentality, knowing the customer will most likely not be coming back, that customer should not be lacked any of the hospitality as a family that has the potential of coming back a half dozen more times. The questions raised by Lauren are great and parallel some of my own concerns, what will happen to reward programs? Will this effect different pricing for different people?
ReplyDeleteMaintaining databases as well as analyzing the data that is collected is certainly not cheap. Big data killing off all but the biggest retailers is a very real threat since having to scale up your big data to meet consumer needs can be extremely costly. The hotel industry relies so heavily on consumer data that in order to survive in that sector it is imperative that you are able to handle big data. My concern is that we could see a few companies who have the necessary resources to maintain big data create a monopoly in the hospitality industry.
ReplyDelete