Data analytics for the hotel industryHotel industry trends

There is a lot of talk nowadays about big data in the hotel industry. But in fact it is just a buzz-word that provides little benefits to any enterprise. In essence, big data is a collection of unstructured data from traditional and digital sources inside and outside your company that represents a source for ongoing discovery and analysis. In order to get any valuable insights from this data, you have to process and structure it in the right way. “Without processing, data means nothing”, argues Thomas H. Davenport, Visiting Professor at Harvard Business School. This is where modern analytics solutions come in place and allow business to harness this intelligence and turn it into accurate and actionable information. In the hotel industry, data analytics can be used in numerous different ways in order to improve business operations, marketing strategies, occupancy rates and yield. 

Personalized Marketing and Website Optimization

By tracking and processing your customer’s behavior and actions, you can provide them with personalized offers that are more effective and give a personal touch. Let say for example, you have a client that visits your hotel restaurant on a frequent basis due to business. When you are planning your next promotional campaign, make it targeted and personal. Send an email to this client saying ““We know you have enjoyed our great restaurant in the past, so when you visit next week, here’s a coupon for a free appetizer and drink”. There are various marketing automation tools out there that facilitate this process and allow you to deploy an effective and personalized cross channel marketing strategy.

Another area where you can use data in order to boost business is to optimize your website or landing pages through A/B testing. Are you implementing a marketing campaign, but the conversion rates of your landing pages are not as anticipated? An easy solution is to resort to A/B testing. A/B testing is the act of running a simultaneous experiment between two or more pages to see which performs or converts the best. Analytics tools like Unbounce or Optimizely can allow hoteliers with no technical knowledge to implement these tests and give them insights as to which image, message or colour converts better. Did you know that even changing the colour of your call to action button might increase conversions significantly?

Revenue Management 

What is revenue management? Revenue Management is the application of disciplined analytics that predict consumer behavior at the micro-market level and optimize product availability and price to maximize revenue growth. The primary aim of Revenue Management is selling the right product to the right customer at the right time for the right price and with the right pack. The essence of this discipline is in understanding customers’ perception of product value and accurately aligning product prices, placement and availability with each customer segment.[1]

In order to do this, suppliers can analyse intelligence like historical consumer behaviour, data about competitors, market demand, daily pick-up rates etc. If they analyse all the data sources they have with the right tools, they can reach smart conclusions. Consequently, suppliers can determine when and how they should optimize room rates, in order to boost profits and occupancy levels.

Energy Consumption 

In the hotel industry world, analytics can also be used for internal operations. Energy consumption accounts for 60 to 70% of the utility costs of a typical hotel. However, costs can be controllable, without sacrificing guest comfort, by using energy more efficiently. At present times, smart data can help managers to build energy profiles for their hotels.There are modern software solutions that gather data from multiple sources, including weather data, electricity rates and a building’s energy consumption to build a comprehensive ‘building energy profile’. Through a cloud-based, predictive analytics algorithm, the software can fine-tune whether power comes from the grid or an onsite battery module. For example, InterContinental hotels are implementing a similar technology solution and management is expecting to reduce energy costs by 10 to 15%.

Investment Management 

Another way to use analytics for the hotel industry is for financial performance and investment. When managers want to proceed to make capital investments, like refurbish the lobby or the rooms or renovate their restaurant, they can consider implementing a “Randomized Testing” strategy. How does this work? Basically the hotel chain would refurbish the lobby and rooms in only two or three “test” hotels. Then would monitor if there has been a difference in bookings and customer satisfaction. The data obtained from the test hotels can then be compared to the data of the other hotels that were not refurbished. Thus, managers can take a data driven decision and clearly see if its profitable to make the investment throughout the whole chain.

In conclusion, data analytics can be a powerful force in transforming the hotel industry. From taking evidence based actions to developing customer centered marketing and pricing strategies, increasing the ROI of capital investments and generally empowering hoteliers to make bigger and better decisions. As Thomas H. Davenport says, creators of data-based products are those who will survive and succeed on the market.


1. Cross, R. (1997). Revenue Management: Hard-Core Tactics for Market Domination. New York, NY: Broadway Books.

2. Davenport, T. (2013). At the Big Data Crossroads: turning towards a smarter travel experience. Rivington Press.