Independent Hotelier’s Big Data vs. Real-Time Data Conundrum
December 3, 2015 10:40am
By Max Starkov
The following are highlights from Max Starkov’s article Independent hotelier’s Big Data vs. real-time data conundrum for the latest edition of HOTEL Yearbook 2016 – Technology, which tackles the big question of how independent hotels can level the playing field against the OTAs by leveraging real-time data in efficient ways.
In the new environment of OTA consolidation and rate parity removal in Europe, the market share dominance of the OTAs can seem like a colossal problem with no real solution. However, independent properties have a wealth of digital technology and data tools already available to them that gives them the means to outsmart the OTAs and differentiate themselves from their competitors, all while generating serious direct revenues.
OTAs and Big Data
In hospitality, there has been a lot of hype about Big Data and why hoteliers should take full advantage of their customers’ Big Data. According to Gartner, Big Data is high-volume, high-velocity and/or high-variety information assets that demand cost-effective, innovative forms of information processing that enable enhanced insight, decision making, and process automation. Confused? Big Data sounds intimidating, doesn’t it?
For years the OTAs have been bragging about their Big Data: gigantic amounts of data on the browsing and purchasing patterns of their website users. At the same time, the OTAs have relatively “small data” about hotel guests’ on-property behavior and activity purchasing habits while on property. Hoteliers have access to what we call “Real-Time” data, meaning the on-property data coupled with user browsing and purchasing data on their own websites. This includes user demographic information, geo location and language preferences, past booking history as well as on-property behavior such as whether or not they booked suites, or even what restaurants they frequented while on-site. This data is all instantaneously available when the user lands on your hotel website, and represents a huge advantage hoteliers have yet to effectively utilize.
Hoteliers also have another distinct hidden competitive advantage over the OTAs: they know their property, their hotel product, their customers, and their destination better than any OTA. Hoteliers should develop a digital marketing strategy to “own” their destination and their destiny as a whole.
We will explore exactly how to use Real-Time data and other hidden competitive advantages, but before we do, let’s first address the most common question and roadblock:
Can Independent Hotels Really Compete against the OTAs?
Considering the defeatist mentality and acceptance of the status quo at many hotel companies, it is easy to understand why OTAs are increasing their market share even in these booming times for the hospitality industry. We often hear from hoteliers that they are too powerless and too under-funded to “fight the fight” against the OTAs. While it is true that the mega OTAs have deep pockets and spend billions on digital marketing efforts, any independent hotel, resort and casino should realize they can outsmart and outspend any OTA on their property alone.
Did you know that mega OTAs’ advertising spend on average is less than $300 per contracted property per month? Did you also know that mega OTAs have on average less than 300 visitors per contracted hotel per month? Compare this to the average full-service independent or boutique hotel’s advertising spend of $7,500 -$10,000 per month and property website traffic of 10,000 plus visitors per month! Any hotel, on its own, can achieve much more online exposure for its products and services, as well as much better engagement of the online travel consumer audiences relevant to the property.
When the property embraces a “direct is better” top-down strategy and the on-property team sets a primary goal of generating as many bookings as possible via the direct online channel – by far the most profitable channel today – the team can work together to seize market share from the OTAs as a united front.
Budgeting for a robust direct online channel strategy is the only way to begin to shift the pendulum away from the OTAs.
Learn more in our article, “Hotelier’s Action Plan to Win Back Market Share from the OTAs.”
Real-Time Data vs. Big Data
At the property level, Big Data means the full breadth of past guest profile information, past booking history, preferences, purchasing habits while at the property, affiliation with the hotel guest appreciation program or loyalty program, booking channels, preferences for auxiliary services, etc. Utilizing this humongous amount of data in a practical and meaningful manner sounds both appealing and intimidating. Unfortunately, this Big Data has very little value if not utilized to the fullest.
The new hyper-interactive, multi-device and multi-channel travel consumer is bombarded by offers left and right. For example, imagine what one of your hotel guests goes through within 12 months post stay at your property: he or she would receive at least 100 travel deal-related emails from OTAs, at least 100 emails from a Flash Sale site like Groupon or travel deals publishers like TravelZoo, and would have been exposed to at least 20,000 travel related banner impressions and at least 5,000 paid search impressions.
Then, how important it is to have Big Data that includes profile data about a past guest who stayed at your property 12 months ago, but never heard from you since then? No real value, indeed!
Compare this to the Real-Time data you can get about a travel consumer visiting your website:
In our view, Real-Time Data is more relevant than Big Data to improving customer engagements and conversions.
Some initiatives in which to utilize Real-Time data include:
Learn more by reading the full article “Independent hotelier’s Big Data vs. real-time data conundrum” in HOTEL Yearbook 2016 – Technology.
The HOTEL Yearbook 2016 – Technology is the third edition of the publication’s special series, focusing exclusively on the rapidly evolving digital side of the hospitality industry. The goal of the guide is to supply expert opinion on new innovations in the hotel business. With more than 40 authors – ranging from hotel group CIOs to academics to technology pioneers – the collection seeks to inform, inspire and educate.
Read the full article: “Independent hotelier’s Big Data vs. real-time data conundrum” in HOTEL Yearbook 2016 – Technology.
Tags: hebs digital,
hotel digital marketing,
real time data
Max Starkov is President and CEO of HeBS Digital, the hospitality industry’s leading digital technology + website design, full-service digital marketing and website revenue optimization consulting firm, based in New York City (www.HeBSdigital.com).
HeBS Digital has pioneered many of the best practices in hospitality digital technology and full-service digital marketing, social and mobile marketing, and direct online channel distribution. The firm has won over 300 prestigious industry awards for its digital marketing and website design services, including numerous Adrian Awards, Stevie Awards, Davey Awards, W3 Awards, WebAwards, Magellan Awards, Summit International Awards, Interactive Media Awards, IAC Awards, etc.
A diverse client portfolio of top-tier major hotel brands, luxury and boutique hotel brands, resorts and casinos, hotel management companies, branded and independent hotels, and CVBs are benefiting from HeBS Digital’s direct online channel consulting, technology innovations and digital marketing expertise. Contact HeBS Digital’s consultants at (212) 752-8186 or email@example.com.
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