In today’s data-driven world, it is important for hotel owners to be up to date on ways they can leverage data analytics in order to improve their profitability. Data analytics has become a powerful weapon for hotel owners. In this post, we’re going to cover six ways that hotel owners can leverage data analytics in order to improve their business and the bottom line.
We’ll see how hotel managers must approach their business strategy by using data to understand their target audience in relation to their current and recurring customers. The article also talks about how hotels must research the competition to gain insights on what works and what doesn’t in their industry.
Once the data is gathered and turned into key performance indicators (KPIs), hotels can develop new services and launch marketing campaigns that would help them attract new bookings and reservations. By following this repeatable process, they should be able to scale their hotel’s performance and continually grow their revenue.
Manage Revenue Properly
Revenue management, in the most practical sense, refers to the ability of hotel owners to find the right clients efficiently from the distribution channels that drive the highest quality of leads. The owners must then offer them the best room for the most agreeable price.
To achieve this, hotel owners must use performance data to unearth insights based on different key performance indicators (KPIs) that affect profitability over time.
By conducting revenue management the right way, they are able to squeeze the most out of a hotel room’s return of investment (ROI). Knowing how to promote the rooms, how much each should cost, and who to market the rooms to allows hotel owners to maximize their revenue.
The KPIs of revenue management for hotel owners include:
- Revenue per available room – is revenue divided by the total number of rooms. It represents a hotel’s ability to fill its rooms and manage supply and demand.
- Turnover – refers to how many times a year an average room is rented. The higher the turnover, the more ways hotel owners can increase revenue per available room since it shows they have ways that they can get guests to stay longer.
- Yield – refers to the revenue earned per night from an average room. This can be increased by ways such as segment targeting, understanding of peak season pricing, and special offers.
- Average daily rate – is the average amount that a guest pays for a one-day hotel stay. It can be increased by ways such as understanding pricing options and ways that they can get guests to stay longer in their rooms.
There are several ways you as a hotel owner can manage revenue. One way is by diversifying their revenue sources and keeping competitive rates. This means you should sell all your products at the same price, which usually will lead to a decrease in sales as people can buy goods more cheaply elsewhere.
Another way is to increase prices on margins while reducing them on commodities. Getting people into the door is important because once they’re in there they’ll be paying for other things, such as food or drinks that aren’t covered by the entrance fee.
To accomplish these tasks more effectively, consider implementing a Revenue Management System (RMS) in your hotel or resort business. It will tell you how much it costs to run your business, the ways that people are booking, and helps you manage revenue properly.
Finally, using these tools also allows you to forecast your estimated revenue and budget accordingly. This allows you to determine the approximate amount your campaign will earn over time and how much you must allocate for it to maximize profit.
Target the Right Audience with Your Marketing Efforts
Before launching a marketing strategy to promote your hotel, you need to know who your target audience is first.
Considering the needs of your audience is of utmost importance. For example, if you have ways to help a business traveler reduce costs and earn rewards, then your target audience would be companies or people who are looking for frequent flyer miles along with their hotel accommodations.
Also, use the demographics of your target market, including age, gender, location, income level, to help you create highly targeted marketing campaigns. Using Facebook Ads or Google Ads allows you to enter the demographics of users where your ads will appear.
An emerging segment in the hotel and travel industry is B2B. If you are targeting this segment as part of your marketing campaign, create a B2B portal so they can book rooms in bulk. Doing so will help play a crucial role in your B2B sales process.
Before launching your campaigns, make sure to create landing pages that will help increase your website conversions.
To do this, you need to understand how visitors interact with your site. Starting with free analytics tools like Google Analytics, check how long they stay on your site, which pages they visited the most, and the percentage of visitors who bounced away from the site.
If you are tracking goal conversions of your landing pages, you can see how many visitors are placing their reservations as opposed to those who don’t. From here, you can benchmark your conversion rates and run some tests to increase them.
Aside from Google Analytics, Hotjar and Crazy Egg are heat mapping tools that track visitors’ behavior on your site. They show you which buttons your visitors clicked on a page and up to what part of the page they reached before they left your website. Using this information, you can better optimize the performance of your pages and convince visitors to act on your CTA.
Customer Satisfaction & Experience
The quality of service you offer determines the kind of guest experience they will have in your hotel. It is ideal to go out of your way to accommodate your guests with help from effective visitor management and amenities to make their stay even more enjoyable.
Regardless, some will enjoy their stay while others won’t. However, what’s important here is for you to gather information about their stay to help you provide a much better service moving forward.
By constantly improving your hotel accommodations through customer feedback, you can improve the quality of stay in your hotel, which could lead to more return bookings and greater revenue.
There are two ways to do this. The first is by asking guests to fill out a survey with questions regarding their stay. You can send it to them via email after they leave.
There’s a good chance they might not reply to your survey because there’s no incentive for them to do so. In this case, you can offer a discount on their next stay to give them a purpose to fill out your questionnaire.
To get more respondents to your surveys, make them easy to answer and fill out. Limit the questions to the most important ones such as the services you offer, overall quality, and suggestions for improvements. If possible, use the rating or Likert scales so they don’t have to fill out anything.
Another way to gather feedback is via social listening. It gets hotel owners up to speed with what people are saying about their brand, positive and negative. This information is helpful and tells hotel owners how competitive they are against other hotels and what ways they can improve their services.
To listen on social media effectively, tools like Sprout Social or Hootsuite allow you to monitor Twitter, Facebook, LinkedIn, and other social networks. You can also track down review sites like TripAdvisor for customer feedback.
Most tools have a sentiment analysis feature to help you understand what customers feel about your hotel. By doing this, you know the ways they are satisfied with and see ways that you can improve the quality of your services to make them even happier.
Once you’ve collected their responses, reply to each one of them as soon as possible and resolve potential customer issues from them. It’s important to acknowledge how they felt during their stay at your hotel. This is critical especially for those who had negative experiences with you. You also want to use their criticisms as a way to make your hotel the best it can be.
Offer Additional Services Customers Want
What separates the best hotels from the rest are the little things. These services, while seemingly unimportant on their own, add up to help make the stay of guests unforgettable. Again, the happier they are with their stay, the higher the likelihood of coming back for more.
Below are additional services that your hotel isn’t offering yet, but should:
First is easy booking. Customer lifecycle starts with the act of booking a room in your hotel. By developing a streamlined process that is fast, convenient, and prevents fraudulent transactions, you can book more reservations, plain and simple.
Secondly, offer loyalty or rewards programs for repeat guests. Airlines give frequent flyers points that may result in free flights. It’s imperative for hotels to develop ways for customers to win loyalty points. Why? Because this helps with customer retention and cultivating new business. Examples of rewards you can give your loyal guests are free upgrades, discounted rates year-round, fast check-ins, and others.
Being an eco-friendly hotel is not a service per see. However, observing the best practices to help decrease carbon footprint can go a long way. For example, place recycling bins in areas where guests are likely to throw away trash: near the elevators, restaurants, and outdoor pool area. Other ideas include installing solar panels and buying green energy.
Scout the Competition
Knowing the competitive landscape allows your hotel to keep up with hotel industry practices and standards, if not exceed them.
Determine nearby hotels targeting the same audience as you and analyze their strategies and campaigns. Reverse-engineer their marketing campaigns to see where they get most of their guests. Take the best practices they implement on their strategies and use it on your own.
To do this, you can use tools like SEMrush and SimilarWeb that lets you conduct extensive marketing research from SEO to estimated ad spend. These tools will also help you understand the channels they use to reach out to potential guests from Facebook to Instagram Explore page.
By analyzing their performances in these marketing types, you can see strengths you can apply to your hotel and weaknesses to capitalize on.
For example, a competitor hotel is generating lots of guests via email marketing and ads, but its social media marketing is lacking. You can then run their data to see what makes their email and ad campaigns successful. At the same time, find out the things they could do to make their social media better and do those for your social media accounts.
Centralize Big Data
Since you have lots of KPIs to take into account to help make sense of your big data, compiling them in a single dashboard could prove to be a challenge. You’ll have to compute and fetch information about marketing, customer, and revenue and manually export them to your system. Doing all these could take away a chunk of your time that you could have dedicated to doing other important things for your hotel.
With this business intelligence tool, you can connect it to over 250 sources from where you collect big data from. So, whenever you need to generate a report of your revenue management, you can use ClicData to centralize and aggregate data automatically from your systems and have your KPIs automatically updated in your hotel revenue dashboard.
ClicData also allows you to share these KPI dashboards with the different teams responsible for helping you grow your hotel’s revenue. You can also create individual reports for each team so they have all the necessary information to develop and implement strategies that should increase sales and revenue in the coming weeks or months.
For example, gather inquiries your hotel received from people during a period and determine how many of them became guests. For those who didn’t become guests, find out why based on the flow of conversation with one of your customer agents.
Show these to your support team so they can determine how to talk to people that will lead to a reservation. A possible solution to this particular issue might be to use a knowledge base software or chatbots to dynamically engage with customers.
For your hotel to reach profitability, you must treat your guests right. This is the only way that will help lead your hotel to more bookings and reservations.
Providing excellent service is a continuous process that is made much more feasible with the help of data analysis. They provide you with insights into your marketing campaigns, customer support, and sales and see where you currently stand in the hospitality industry.
Using the data, you can find ways to improve the different aspects of your hotel to provide your guests with a unified experience that should lead to profits.
Leverage your customer, marketing, and financial data with a Business Intelligence solution like ClicData to make better decisions for your business and outperform your competition. Check out our dashboard examples for hotel revenue, booking, and customer satisfaction monitoring.
You can also start using ClicData today to manage all your data in a single and convenient location and create reports for them. You have access to all features and support during a 14-day trial for free.