Brand Insights

Data and Digital for the Hospitality Industry: A Framework

Overview

The hospitality sector benefits from vast swathes of valuable end-to-end data. Those willing to remodel, re-imagine, dive deep into this data and delegate to tech, are transforming the customer experience. Early adopters are already reaping the rewards of keeping up with shifting demand and setting a rapid pace for their peers. With global consumer expectations in part reset by the pandemic, hospitality businesses need to consider how digital transformation can fuel their future.

Scope

An exploration of four focus areas to include in a data and digital framework for the hospitality industry. Businesses can use this framework to identify pain points, inform their use of data and set a digital strategy.

A Global Market Estimates report predicts that AI in hospitality will see a compound annual growth rate (CAGR) between 2021 and 2026[i]. Hospitality companies are already exploring how AI can make them more competitive. Sometimes AI will take a supporting role as a catalyst for deeper and more effective analysis of data. At other times it will be center stage, guiding the customer through their hospitality experience.

So, how can technology help in hospitality? Let’s look at four areas of opportunity for digital transformation. The hospitality industry can use these areas of focus to map challenges and opportunities.

Customer-centricity

Meeting growing expectations for 24/7 customer service is challenging. Thanks to significant advances in natural language processing, more businesses are deploying increasingly adept chatbots. The bots field online queries, often there's a human backup to default to if needed.

But they're saving that colleague significant time. Data collected during these interactions can combine with insights harvested elsewhere. This could be from within your business, from your social media, or the wider landscape. Processed as a bigger picture with the help of AI, you can find trends and anticipate the needs and wants of customers. This enables the kind of micro-targeting of offers and add-ons that consumers can find impossible to resist.

Personalisation is an area of AI-charged analytics with huge potential. Using your digital transformation to collect more and better-quality data, and then improving your analytics using AI processing will enable you to deliver unique, targeted offers at the right moment, en masse.

Marketing and Research

Analytics driven personalisation can also power up your marketing when your guests are on the premises. Geo-location data combined with consumer apps can serve up an attractive offer to your customer at exactly the right time. For example, by using historical data paired with their reservation details machine learning could identify whether they’re likely to be heading for breakfast with a friend or in need of some downtime in the spa. Sending them a ‘free coffee with breakfast’ offer or a treatment discount, enhances their experience with you and increases your profits.

Managing your reputation online is crucial in an age when online research factors so heavily in consumer decisions. With AI analytics processing, there's real potential to step beyond mere feedback monitoring. The next step is to analyse your reviews and feedback deeply and compare online against your competitors. This could unearth inefficiencies and opportunities for service enhancement. As Venturebeat explains, sentiment analysis has the potential to highlight small changes that could make a big difference [ii]. This could be as simple as identifying that a better breakfast offering could help you gain market share. 

 

Revenue Management

Examining occupancy and booking patterns is the bread and butter of revenue management. Advanced machine learning means we can now predict, plan and personalise even better.

Using historic, market demand and product availability data can provide a much fuller picture. This aids forecasting, revenue management and ultimately, could allow businesses to set competitive (and often personalised) prices. Applied across the board, AI-assisted analysis has the potential to do lots of hospitality heavy lifting. It can assist with inventories and ordering, staffing and could even be used to predict and schedule in maintenance.

This data can also help to inform marketing strategies. Understanding when campaigns and spending need to be ramped up or cut back can help with cash flow and occupancy levels and create positive growth both in audience and revenue.

Labour

Post-pandemic, the hospitality industry is facing acute labour shortages. Could digital transformation be the answer for staffing the hospitality and tourism industry? After all, customers are now more used to hands-off service. Many now welcome the use of mobile technologies for interaction-free service options:
  • app check-in and out for hotel guests
  • ordering room service via app or messaging
  • QR code for menus and ordering in restaurants
  • activity apps and app-based loyalty programs

Some chains have already installed voice assistants in rooms to manage smart functions. And tech-powered hotel assistants are not new. In 2014, Aloft Hotels launched the first robotic concierge/butler (Botlr). Now, some roles of hospitality staff can be replaced or supported by a technological counterpart. And how useful would it be to have a log of customer requests to their virtual assistants? It could certainly help identify and address service request trends easily, and prioritise projects to eliminate the most frequent issues. And of course, having a log of a customer's preferences for future visits would enable a smooth experience and higher level of personalisation.

If your digital transformation strategy covers facilities management, the hotel industry could benefit from cleaning technology such as robot hoovers, sweepers, floor mops and "maid bots".

Key advice for the future of hospitality businesses

Get up close and personal with your customers

If you want to deliver exceptional service, guest experience is crucial, and this means understanding what your customers want and offering a personalised service. Use digital tools and technology to gather and analyse customer feedback, and then use that data to improve convenience, communication and services.

Use digital marketing to your advantage

Having a comprehensive CRM will make it easier to connect with your customers between visits and learn more about them. Automated email journeys can help you discover the topics they're interested in and the offers they find most enticing. Social media marketing not only increases brand awareness, but it's also a place to start a conversation with your audience to find out their idea of great guest experience, to disseminate positive feedback, and to track competitors.

Digital insights for decision making

Running any kind of hospitality, hotel or restaurant business comes with a series of risks, and those risks increase as the business expands. Digital data and machine learning can help hotel owners, hotel management and restaurant owners and management teams make better decisions about their business operations. This could be everything from staffing levels or table placement to rebranding or expanding into new locations.

Be responsive to change

Customer expectation shifts quickly and regularly. As a hotel or hospitality business, it's vital to stay relevant and keep up to date with what customers are looking for from their experience. Whether that's responsive menus, app-controlled entertainment or instant digital check-in, restaurant and hotel technology needs to reflect what guests want. Successful digital transformation leads to increased revenue and improved loyalty. Both of these are reliant on using digital technology to meet and exceed customer expectations.

 

The hospitality sector and the hotel industry were hit hard by the pandemic, but the application of digital is bringing new opportunities for cutting costs, improving efficiency, and increasing revenue. With access to rich data and digital opportunities, an effective digital transformation strategy needs to be joined up and scalable. Properly executed, successful digital transformation could be the perfect opportunity to surprise and delight customers and offer new levels of guest experience. Northell provides digital strategy consulting for hospitality to bolster your business for an exciting future.