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Introduction
Hotel operations involve numerous distinct processes that are not fully transparent without data analysis. Collecting and analyzing data about hotel operations brings much-needed transparency to these processes, which in turn reveals new opportunities to improve guest experiences and increase profits.
Data is essential for telling hoteliers where they can cut costs, what products and services their hotel is lacking, and what can be changed in hotel operations to meet guest expectations while managing available staff efficiently.
Industry experts reach the same conclusion:
“Having access to critical metrics quickly is what every hotel operator needs. The process of running reports, exporting, and manipulating data is a waste of time that can be better used in efforts to deliver a quality guest or staff experience.
Being able to quickly be served in real time on the books data, forecasts, pace progress, guest sentiment, etc… allows leadership to identify pain points and opportunities within the business quickly.”
Alain Derderian, Hospitality Consultant – Atelier Hospitality
Developing hospitality applications using web technology and hosting them in the cloud allows to implement various data mining techniques. When data mining features are natively integrated into guest applications and their backend server is integrated with PMS, BMS, GRMS, POS, and other hotel systems, the collected data can provide comprehensive insight into guests’ interests, demands, and whether hotel staff are addressing guests’ needs properly and efficiently.
Data mining opens new opportunities for hotel managers to detect operational inefficiencies and manage processes better. Data-driven decision-making keeps the business management process safe and prevents negative impacts from decisions based on reduced situation awareness. Real-time data and data streaming make business management precise, responsive, and automatable.
Optimizing supply chain management, tailoring products and services based on guest behavior, and providing guests with information that reduces waiting time or eliminates the need to contact hotel staff can only be achieved when certain metrics are available, sometimes with deeper analysis.
Thorough analysis of available data about hotel operations is the key to harmless cost optimization and providing the best guest experience. Data collected via hotel apps enables precise data-driven operation management, including:
- Tracking changes in traveler preferences
- Analyzing booking patterns to improve occupancy rates
- Developing a more efficient pricing strategy
- Understanding guest spending behavior
- Defining optimal staffing levels
- Discovering new revenue streams
Managers can increase guest spend through data-driven menu engineering, upselling, and promotions. Analyzing inventory dynamics can help improve FMCG procurement, reduce food waste, and secure availability of items. Knowing the average check, table occupancy, costs of sales, revenue per available seat hour, and tracking various KPIs can improve in-house dining profitability. It is also important to collect and analyze timestamps of purchases to introduce dynamic pricing that accommodates time-specific buying patterns.
Data mining also generates more ideas, which can help hotel staff feel more involved in decision-making. Decisions based on transparent data are less subject to “tunnel vision” than those based solely on executives’ points of view.
“If everybody sees what everybody else is doing, then the great ideas tend to rise to the top and the bad ideas tend to fall away.”
Rob Casper, JP Morgan’s Chief Data Officer
Types of Data
A typical hotel uses a variety of IT solutions, such as Wi-Fi access points, Property Management Systems, TVs, self check-in apps, booking engines, and more. All of these systems generate data and leave digital traces that can be useful for better understanding hotel operations. Below is a list of typical data types:
Anything that happens in the applications can be logged and analyzed down to the second. By examining the timestamps of certain events, or evaluating the timespan between events, one can better understand whether the logic of certain transactions between guests and the hotel needs to be improved. It is also possible to identify time-specific behavior patterns.
- Guest location and movement
Guests move around the hotel frequently. Knowing their routes or how long they stay in certain areas can help identify the best spots to place signage or venues and plan internal logistics better.
- Navigated products and menus
See which products are checked but not purchased, which descriptions or pictures are viewed more often, and understand how guests are navigating through the app to further tailor product and service descriptions or group them in a more relevant way.
- Ordered products, quantities, and selected add-ons
See which products are ordered, how many pieces, which extras are added, etc. This can help plan supplies better and adjust pricing to promote more sales.
- Activity during different times of the day
Understanding what guests are doing in the app throughout the day can help introduce special offers differentiated by the time of day.
Methods of Data Collection
Data can be collected through various means and stored in different formats. Here are some ways to collect data:
Apps can collect data from within the app, from the browser, or from the host device. This data can include the time of an event, the part of the screen the user touched, or the menu they navigated. Data collected from browsers may reveal more information about the user’s locale, time zone, and device details. Device data can include geo-location, including precise location.
Cloud technology is a powerful tool for extracting data. Hoteza cloud has native functionality to export statistics and data. Anything happening between the server, app, PMS, and other integrated systems can be logged and exported for further analysis.
Since Hoteza is web-based, some data about app usage can be retrieved from the hotel’s network.
Processing
Data that comes through hotel apps can be stored locally or in the cloud and exported for later use. With some customization, it is possible to establish data streaming to track some metrics in real time and even automate some processes based on such data. Various processing techniques can be applied, such as:
The simplest but least efficient way of processing data is to export it in a human-readable format and take a look, maybe catch something with the naked eye, apply basic filtering, or use formulas in spreadsheets.
Searching data by some time-based criteria may reveal quantitative information on a particular event logged by the system.
To track a specific event occurring in hotel apps, it is possible to add a custom script that would collect particular metrics for the hotel.
It is always possible to export data and use it with third-party tools to reveal patterns, dependencies, correlations, and other information recoverable from big data. Artificial Intelligence, algorithms, and various data science techniques are useful here. Various business intelligence software is available for use with collected data.
Ensuring Data Consistency
Problems with data handling can significantly reduce the efficiency of hotel operations. Guests may accidentally make double reservations, provide incorrect credentials or invalid credit card information. This can result in hotel management having to manually review the list of reservations and guest information to identify invalid data and correct it. One solution to avoiding these issues is to implement an automated data verification system. The Hoteza app offers ID validation, liveness checks, and credit card verification to prevent most problems caused by manual input of incorrect data during guest check-in.
Sometimes, guests make multiple bookings, which can create false room reservations. Identifying and deleting such bookings can prevent situations where other guests are unable to book a room because it has already been falsely reserved.
ID validation helps avoid fraud, prevent impersonation, and avoid other identification issues that may arise from misspelling the guest’s name.
- Invalid Credit Card Information
Confirming the validity of the payment method provided by the guest can prevent unpaid bills. Validation can include verifying the credit card number checksum or even contacting the issuing banking institution to authorize and secure a deposit until the final bill is charged.
Practical Benefits
Data becomes very practical when collected in the right spot. A hotel can improve almost every aspect of its operation by simply collecting available data and analyzing it. Here are some typical benefits of using data to manage hotel operations:
Adjust inventory stock
Track seasonal changes in demand, supply chain delivery time, current offers, and special events. This will reduce waste and avoid stock shortages by analyzing FMCG supply, stock, and consumption patterns.
Define ideal staff levels
Understand more about staff workload, tasks, and quality of work. Track labor expenses and plan the required staff level to deliver the performance needed to accommodate the forecasted room occupancy rate.
Direct personalized loyalty campaigns
Design marketing content that speaks to guests by analyzing guest behavior and personal messages included within loyalty campaigns.
Keep infrastructure quotas updated
Know exactly how much gas, electricity, water, internet traffic, and other infrastructure resources will be demanded by your guests. Stay efficient without experiencing shortages.
Be energy efficient
Air conditioning, heating, and water boiling put a lot of stress on the electricity grid and form a significant part of monthly bills. Analyzing thermostat adjustments, lighting usage, and water consumption can help to identify routine patterns that can help to reduce energy waste while keeping guests comfortable.
Innovations
Vendors like Hoteza are working tirelessly to find new ways to improve the hospitality business through their apps and solutions. One of the most notable data-related products soon to be exposed to the market is our brand-new CRM.
Customer Relationship Management starts with understanding the market capacity and the demographics of expected clientele. It then continues with collecting their names, contact information, and profiling. By keeping this information organized in a comprehensive CRM database, a hotel can better understand their customers, stay in touch with them, and promote more repeat stays. Planning marketing campaigns, managing loyalty programs, and providing guests with a more personalized experience is much easier with a comprehensive CRM integrated with hotel apps.
Another product or feature that could have a significant impact on the business of our customers is data mining tools.
Data mining tools are easily used with web-based applications such as Hoteza Web and its back-end cloud, thanks to the data exporting functionality. Having native functionality for data mining avoids the need to export and import data to feed it into a third-party mining tool. At Hoteza, we will continue to expand data mining functionality across our solution to provide native and hassle-free analysis of hotel operations.
Nikolay Beloshitsky
CEO
Hoteza
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