Data the key for guest acquisition and retention
Data the key for guest acquisition and retention
27 JULY 2017 7:57 AM

Speakers at the Revenue Strategy Summit in Washington, D.C., discussed how disruptors, such as Airbnb, loyalty-member booking rates and more, have an impact on the data hoteliers use to make key decisions. 

WASHINGTON—How hotel owners and brands use the data generated by loyalty programs, book-direct strategies and even Airbnb can make a difference in all aspects of hotel operations, particularly in guest acquisition, said speakers at this week’s Revenue Strategy Summit.

On a panel titled “The rise of the titans,” hotel owners and a brand executive discussed how tech-driven trends in the industry are having an impact on their business, and whether they’re getting the most out of the data generated by these trends and programs or not.

The Airbnb impact
How alternative accommodations platforms in general and Airbnb specifically have an impact on hotel operations and metrics has been a big topic of discussion for a long time, and the speakers emphasized that hotels must be more nimble when it comes to competing with these platforms for guest demand.

“I see so many reports and statistics on Airbnb, and the key points I talk about with my team are the growth of Airbnb and how it affects us,” said Steven Nicholas, principal and EVP for Noble Investment Group. “We see (Airbnb come in) on high-demand days, and it’s creating a dilution of that demand. That piece of it scares me, for high-demand, high-rate days.”

Krissy Gathright, EVP and COO for Apple Hospitality REIT, echoed that worry, particularly since “Airbnb is a large and powerful company, and they’re smart and evolving their technology every day,” she said. Still, in her view, hotels stand apart because of the consistency of branded hotel products.

“It goes back to making sure that as hoteliers and brands, we continue to deliver the brand proposition,” she said. “That makes the customer want to come back.”

Mark Carrier, panel moderator and president of BF Saul Co. Hospitality Group, said alternative accommodations platforms bring complexity to the hotel revenue-management process, and that can be worrying.

“Now we have a whole new inventory sitting out there that’s not integrated into the tools we use now to make pricing decisions,” he said. “We’re at the highest levels of occupancy (in years), and it’s sustaining. But we’re not getting the rate growth we should, and I think Airbnb is a factor in that … and it’s creating a whole other level of complexity for our revenue managers.”

How loyalty factors in
The speakers said loyalty—and specifically, loyalty-members-only, book-direct rates—can be a real double-edged sword when it comes to its role as a tool to maintain hotel customers in book-direct channels.

Gathright said at the end of the day, hotel success with loyalty programs will come down to data.

“My challenge is to the brands, to help us continue to step up to the plate,” she said. “All these brand titans have immense amounts of data and use it to personalize stays. We (at the hotel) control the stay, but we need to have the customer data. Brands need to be able to take that data from a CRM standpoint and continue to use it to deliver those ‘a-ha’ moments that will drive the customer to come back.”

It’s not just about price, but also about experience for guests, said Philippe Garnier, VP of distribution and partnerships for Hilton, which led the pack among hotel brands to push customers to book direct through channels.

“We make no secret of the fact that we encourage our guests to book direct on our websites,” he said. “This enables them to enhance the experience—to check-in online, bypass the desk, use mobile key.”

An offshoot of book-direct campaigns is the latest trend of brands offering the lowest rates to loyalty program members who book direct. That practice, while driving direct bookings, isn’t without issues, said the hotel owners on the panel.

“This is the right thing to do to get the customer back, but we’re giving 10% off discounts, and that comes from our pockets,” Nicholas said. “There’s a long way to go with this, and unfortunately it’s deteriorating rate, which drops right to the bottom line and affects all our pockets.”

He said hanging on to that loyalty-related data is critical for all hoteliers. “Whatever the future brings, the brands own the customers, and we’re partners with the brands, but we need to remember we own the customers,” he said.

Innovation pace
Conversation turned to two things: Innovation when it comes to data, and whether the hotel industry is behind its ancillary partners when it comes to generating and using data to drive innovations for guests.

“We have a situation where we have the Alibabas, the Amazons, the Googles of the world using billions of dollars to put together powerful data tools that allow them to microtarget people,” Carrier said. “We have this mix of owners, brand companies and management companies, and we haven’t been able to demonstrate a quick adaptation of technology. In many cases, we’re going to battle with tech tools that are way behind the curve.”

Gathright’s response drew a laugh from the audience: “I think we need to blow up the model as it currently exists,” she said.

“As owners, we’re getting data that on macro and property levels tells us where our business is coming from and from what channels,” she said. “We strongly feel that we need more data as an industry that measures net profitability. We’re looking at our individual properties and asking, do we need to have the same, typical sales structure at each hotel? Should we be cutting some dollars in direct sales efforts and re-allocating those dollars to digital or e-commerce?”

She said that as the industry in general captures more customers through digital channels, it needs to respond in kind.

“It happens at a slower pace than I’d like to see,” she said. “We’re underspending on digital and personalization and data. I think now the new revenue management model is around data and personalization and targeting.”

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