Technology Prospectus 2018 – Treasure seekers
The big data ocean is a daunting prospect, but hotels that venture out onto it can win equally big rewards. Rosalind Mullen reports
With the advent of big data making more information than ever available to help hospitality operators boost business, the prospect of how best to analyse and use it can seem overwhelming. But forget mad professors and crazy stats flickering across countless screens, the key is to remind yourself there is help out there and that you are using big data to achieve the same goals as you ever were.
Usually, it boils down to three things: you want better guests (those prepared to pay what you want to charge, and want to come back); you want to pay no more than you can afford to attract those guests in the first place; and you want to fill your rooms as often as possible.
What big data represents is a richer way to make those three things happen. The information out there ranges from trends in flight bookings to guest spending habits, from the ability to track peaks and troughs in demand to guest comments on Twitter, and more. Admittedly, though, the sheer volume of data available for you to exploit can appear daunting.
Stephen Barr, co-founder and managing partner at Noetic, understands this: "When we plan acquisition campaigns for customers, I don't feel any need to tell them that our biggest data table has three-quarters of a billion lines of data in it, because it isn't relevant, it's just big data. What I do tell them is that we can improve their customer acquisition programme, typically saving them 30%-plus of their entire media spend, by using our ability to sift through lots of data to find the patterns that are most efficient at delivering new guests at lower costs, and then using automated process to expand the campaigns that work best, while culling campaigns that aren't as good."
Direct guest acquisition
Unfortunately, too few hoteliers are making use of big data analysis, Barr believes. "Most hotels are not yet thinking differently about big data," he says. "That's largely what's behind many of the complaints about online travel agents. Hotels don't want to pay the large commissions they're being asked for, but too often also don't want to use the direct acquisition tools that already exist to get those guests themselves."
Senior managers who are looking to bring in those first-time guests themselves are increasingly aware that the key to winning repeat business is understanding and managing the guest experience before, during and even after their hotel stay. Capturing data about each guest visit is important because it helps managers to make two essential predictions: will they come back? And if so, when?
Barr says: "Quantifying the experiences and using that data to predict future behaviour is one theme we're seeing. Another trend is that there is more real data gap analysis."
Rather than using the traditional method of budgets and historic best-guesses to gauge 
the level of future demand, operators can now use the guest data itself to do that.
"It is often easy to predict how full a hotel is going to be in the future, based on the sheer wealth of data that most businesses are sitting on. The data just needs to be made available and prepared in such a way that these predictions can be made and in real time," says Barr.
For instance, if you know three months before a certain date that you're likely to miss a revenue target and that the miss relates to 
a particular customer segment, such as weekenders, you have time for your customer relationship management team to put together an offer for your direct customers and time to see the results well before you have to panic and dump discounted rooms into the market in a desperate attempt to hit target.
"Using the new technology enables good decisions to be made earlier, which means you're less likely to be in a position where you can only make a poor decision or no decision," Barr explains.
Cloud-based hospitality solutions can help operators to get a clear, real-time picture of the market by presenting data in context with other data. Simon Bocca, chief operating officer at forecasting and cost-control software provider Fourth, says: "The victors in the battle against rising costs and competition for both customers and the best staff will be those hotels that view investment in IT from a holistic, cross-organisational perspective.
"They create a platform that hosts myriad technologies deployed for front and back of house and from third parties - such as point of sale, mystery diners, procurement data, menu management and social media sentiment. They take data sets out of the silos they traditionally reside in, and put all that data into one central reporting hub. In doing so, they open the door to the power of sharing information and insight across the business, thereby improving the guest experience, increasing profitability and operational efficiency, and optimising the workforce."
At OTA Insight, which provides cloud-based revenue management solutions, co-founder and chief commercial officer Gino Engels warns that integration is key when adding new systems or tools to the cloud as otherwise data and content can be segregated. "Hoteliers should ensure their vendors are able to effectively integrate and work alongside 
current systems to ensure they gain full value," he says. "Our range of data insight tools are presented in a way that supports and enables direct action. The tools also integrate with core industry tools including hotel property management system [PMS], revenue management system, and data benchmarking providers."
So what of the future? Asset manager 
Sandro Guadagnini, who manages 15 of the 
28 Hallmark Hotels on behalf of Topland Group, says he is looking forward to improvements in algorithm-based forecasting, which allows 
managers to crunch data such as the number of general web searches for a location or event, which can help predict demand in a hotel.
Self-correcting systems
"The systems are self-learning and self-correcting," Guadagnini says, "so they will move forward and improve the accuracy of forecasting. The integration with PMS and distribution systems is a key essential, but today you also need human involvement to check and monitor the system. In future, we will need systems to become more self-reliant as human resources will be too expensive and dispensable. Like any technology, it will get more complex and advanced - at this point, operators are still critically important. But we will take on more and more data."
He adds that access to detailed guest information means revenue managers could look at favouring certain customer profiles. For example, people from China may spend more in a certain type of hotel than those from the Netherlands. Or families may spend more in a resort, and so on. It can be at an even more micro level - Mr Jones spends more than Mr Smith at the casino.
"In the past a guest may have said, 'Do you know who I am? I spend £10,000 in poker games,' and the manager would be called and would remember them. That's the manual way. But the manager might be away. An automated system will have more chance of success."
And it's not just hotels that benefit. Novus Leisure, one of the UK's largest bar, club and restaurant operators, has seized on big data's potential (see panel opposite). Customer experience director Simon Gaske says: "The future is all about data, the speed at which it is gathered, the ease of access to it, and auto-production of the analysis. If you set the KPIs that you wish to monitor, the data can be incredible. If not, it's like a needle in a haystack."
Case study: Novus Leisure
In a nutshell One of the UK's largest bar, club and restaurant operators with 47 venues.
Location Mostly London-based brands such 
as Balls Brothers, but 
Tiger Tiger is UK-wide.
Simon Gaske, customer experience director at Novus Leisure, says data is the key to improving business, and that Novus deals with data
in a number of ways.
First, the traditional way: compiling a database of its customers' names, gender and dates of birth - and more recently requesting social handles. Reservations data is then mixed in to extend the view of a customer's behaviour and business interaction. This is topped off with data gathered from a Novus platform that tracks customer feedback in real time from social platforms such as Facebook and websites such as TripAdvisor.
"Mapping the traditional, reservation and customer feedback data points together lets us begin to see a true view of our customer," Gaske says. "Not only who they are, but what they want, coupled with their likes and dislikes."
The why and how
Christian James, managing director of analytics-focused marketing agency IF, answers the big big data questions.
How is big data changing 
the way hotels operate?
Dynamic optimisation of pricing and capacity management is the really big opportunity. Apart from real-time price decisions online, good visualisation of capacity and price decisions is vital for marketing managers.
How do hotels ensure they are not overwhelmed by data, nor invest too much time 
and money in analysing it?
We recommend being able to extract anonymised data from existing systems, formatted as simply as possible. Analysts and data scientists can then bring that data to life, which does 
not require systems investment.
Can small hotels use their own big data cost effectively?
Yes, using the approaches mentioned above. We can take internal data and add census data, geodemographic, attitudes, lifestyle, media preferences and so on.
A better business performance metric than revpar?
Stephen Barr, managing partner at Noetic, says the revenue per available room (revpar) metric remains essential in assessing business performance. "However, any hotelier 
who spends a significant amount of money investing
in acquiring guests - 
which is pretty much everyone - needs to understand that netrevpar [which factors in the cost of guest acquisition] is a better measure of a hotel's room occupation efficiency."
But Barr adds that netrevpar needs to be put into context because guests are not all the same. For example, guest A has stayed twice and guest B has stayed 10 times, and both have the same netrevpar, but guest B has a higher historic lifetime revenue value and is more likely to stay again, so B's future value is likely to be higher too. B is also more engaged with the brand, which means they are 
more likely to recommend
the hotel to others.
"So netrevpar is a measure we see as essential, and we need revpar as a base measure to get it," Barr says. "But netrevpar itself needs to be seen in the context of guest segments as well as your channels."
Sponsor's comment
As hotels have become more and more dependent on online travel agents to satisfy occupancy and revpar targets, they're not only handing over huge chunks of revenue in commission, they're also handing over control of the relationship with their customers. And that makes filling rooms with the right guests at the right price 
next to impossible.
Noetic is here to help hotels own the guest relationship, and put OTAs back in their box. Noetic helps hotels earn more from their hotel rooms, makes their media spend work harder, and delivers better-quality customer experiences.
The company does all this 
by making sense of data in ways you never thought possible. 
And its Noetic1 system can integrate with all your hotel's existing technology, including Oracle OPERA.
It's clever stuff, but what you get from it is refreshingly clear: more direct bookings at 
a lower cost with guests 
who stay more often right guest, right room, right price.
