Potential of Big Data in Hospitality Industry | Intellectsoft

Updated: March 24, 2021

Nowadays, various industries often try implementing different innovative solutions for enhancing the workflow, improving business development, and getting on the top rates among the competitors of the same area.

With having a high competition level in this field, the hospitality industry is certainly not an exception.

To beat the most serious opponents, they apply such technologies as cloud computing, artificial intelligence, machine learning, and more. Nevertheless, all these innovations can’t be developed without big data.

Today, we will cover the basic aspects you should know about big data in hospitality industry, the main functions, and the benefits of its utilization in this area. So, let’s start right now!

Big Data Analytics in Hospitality Industry: Definition and Types

Generally, big data refers to the large and complex datasets that play a key role in the functioning of various innovative digital processes and tools to provide convenient access to the data and its efficient management.

The transactions in different spheres, telecom, banking, travel, e-commerce, network, and social media platforms — and that’s not a full list of the spheres where the big data is used.

According to Deloitte, the main reason for its vast implementation is the need of industries to get the competitive advantages of it. So, needless to say, big data in hospitality has already become a standard.

The chatbots are used for enhancing the communication between the clients and staff, the smart devices for the guests’ comfortable staying, different mobile applications for booking, check-in, room managing, and service processes, etc. All these are examples of big data practical utilization.

Since big data needs constant structuring and analysis, there are several effective methods of how this can be performed. Let’s have a look at each of them.

Descriptive Analytics

A basic method of data analysis is descriptive analysis. It is considered to be a traditional form of analytics and is now widely used for detecting the changes altered in diachronic shifts.

To make clear, that’s the conduction of the past trends based on the groups of data.

Usually, the descriptive analysis is used for standard operations in hospitality, such as performance reports or pick-up reports.

Predictive Analytics

Another complex method of data analytics is predictive analytics. It implies a deep understanding of the past trends of different groups of data to prognosticate their future tendencies.

However, predictive analytics can never be 100% accurate, as it only gives expert opinions of what might happen with the data in the future.

As a rule, this type of analysis can provide some useful concepts for the hotel development strategy. For instance, you can analyze the booking history at different times to forecast the probable room bookings for the future, which is really cost-effective for planning the hotel management and developing strategy.

Prescriptive Analytics

Last but not least is prescriptive analytics, which includes complex processes of structured and unstructured data computing, based on machine learning algorithms.

And, though it has a similar structure as predictive analytics, this type goes further by consolidating different groups of data to issue the results.

For example, this data can use the location, holiday calendars, weather, traffic, and even traveling trends for getting the most probable prediction about the future market tendencies.

The Big Data Challenges for the Hospitality Industry

According to the McKinsey Global Institute, data and analytics could create value worth between $9.5 trillion and $15.4 trillion a year if embedded at scale — and a considerable number of that is given to the hospitality industry.

Nevertheless, big data implementation still has to resolve various challenges in this area. From security and applications’ management to encryption and server downtime, companies that offer hospitality services need to constantly combat any issues.

The most critical options that require regular tracking are as follows:

Data Security

One of the weak points of hotels is that they always need to conduct various transactions and operate with personal data. If there is any fraud attack, they can get a huge financial loss for addressing the consequences and restore their reputation for years!

Having realized their responsibility, hospitality institutions now have to invest huge costs in launching secure systems for receiving and storing important personal data about their clients — credit card numbers, full names, addresses, passport numbers, etc.

All these can help ensure the data is protected from third parties. Of course, it’s impossible to predict all the issues that can occur, but it is critical for the hotels to always utilize the systems with the best defense rates.

Data Backup

The next point is to ensure that the data stored can never be lost, as it leads to serious issues in the entire hotel’s workflow. This issue is extremely important for the hospitality institutions which are, for example, located near the waterfront. So, more and more hotels apply cloud servers for big data storage and operation.

Thus, even if there are some external factors that can cause data loss, hotels can easily restore it. Besides, unlike the early days, there are lots of top cloud systems with years-long track records of being reliable and safe.

Data Opportunities

The need for creating a larger and more robust database according to the latest trends and demands of the hospitality industry.

The main opportunities for creating innovative solutions for data secure storage and managing can greatly enhance the evolution of this industry.

How Big Data And Analytics Are Changing Hotels and the Hospitality Industry

In fact, there are plenty of benefits from utilizing big data in the hospitality industry. Now, let’s discover the most effective options it brings to hospitality.

Segment Your Clients & Select the Site

Big data in hospitality industry can benefit from targeting different groups of clients. According to Oberlo, up to 50% of U.S. marketers claim that the method of personalizing the websites and apps for different groups of customers, they have got 10% to their revenue or even more.

It does not only benefit the hotel’s revenue but also helps to build better relationships with the customers and identify both the strong and weak points of your business.

Include Prognostication

As it was mentioned above, big data in hospitality industry also implies the usage of different analytics for creating a strong and efficient strategy for hospitality units’ development.

Analysis of bookings, reviews of the most profitable reports, and the main trends’ detailed analytics - all these help to predict the future tendencies for creating the cost-effective plan.

Create Clients Profiles & Customer Relationship Administration

Another great advantage you can get with big data in hospitality is creating customer profiles. It goes without saying, that this method allows hotels to define the specific preferences of the guests and target them more accurately.

Also, creating customer profiles helps determine how to allocate the resources to get the most of the big data analytics. Last but not least, by creating an effective ideal customer profile, you can get a 68% higher account win rate.

Additionally, big data analytics drives to creating customer relationship management (CRM) systems to enhance customer services and provide them with a more personalized experience.

Measure Productivity Indexing

In addition, big data analytics in the hospitality industry can also benefit in evaluating the hotel’s specific metrics, analyze the business productivity and create the most effective methods of how these can be improved.

Furthermore, having diachronic records can help to estimate the basic tendencies in the hospitality industry.

Develop Your Navigation Menu & Utilize Mobile Big Data throughout the Hotel

As we have mentioned above, big data analytics submits a detailed analysis of how to make hospitality units more customer-centric.

According to HubSpot, 88% of CEOs are concerned about customer loyalty, realizing that focus on clients can greatly contribute to their conversion rate.

Navigation menu and mobile big data can improve the customer’s experience and encourage your clients to come back later. Thus, this strategy can also help to convert one-time visitors to loyal customers.

Customer Associations and Sequencing

Data mining can provide the most predictive sequence lines between different actions. For instance, if a guest ordered a room for two, they might be also interested in ordering a restaurant at the state of his in-room stay. Data analysis can significantly enhance customer service and feature unique combinations for visitors.

Estimate Customer Value

For the customers, the hotel service is not just a simple visit, it’s a kind of an unforgettable experience of changing their environment.

That’s why effective data analysis is used for detecting the various client needs and impact their behavior as well. As a result, the customer might purchase additional services like sports packages or restaurant tours for improving their traveling experience.

Usually, this process is implemented on the entire customer base first and then overlays on different segments of visitors to get the highest ROI.

Apply Marketing Personalization and Website Optimization

Needless to mention, tracking and processing of the customers’ behavior and actions are extremely important for big data analytics in hospitality. This contributes to understanding customers’ preferences and needs, and also offers unique value propositions for them.

For instance, you can make various blog posts or emails saying “We have noticed your great interest in our restaurants during the previous week, let us offer you a free meal or drink”.

Account the Energy Usage & Manage the Costs

For sure, one of the critical points for hospitality is to reduce the expenses for the internal operations. For instance, energy consumption can be easily controlled by big data!

By providing modern applications that accumulate the data like weather, electricity rates, consumption stats, etc, you can get profitable options of how to improve energy usage and costs management as well.

The Hospitality Industry Big Data Use Cases

To prove the effectiveness of big data in hospitality, we want to introduce the InterContinental Hotel Group development case as an example. This is a huge company that offers 886,036 rooms in 5,964 locations. Here are the main points of theirs you definitely should study:

Competitive Analysis

Having compared the competitor targeting strategies, InterContinental Hotel Group plans to increase its revenue by providing direct offers based on the history of reservations and suggesting a wider range of options. For instance, clients can customize their room types, select the dates available, or set up a budget.

Hospitality Platform Development

The company has also started developing a hospitality system with lots of features for the hotels included: revenue analytics, property management systems, sales catering, and point-of-sale.

Prognostication Analytics

Analyzing the internal and external factors of performance evaluation allows one to understand how to enhance the quality of services. The guests’ surveys regarding their in-stay experience, economic and industry performance data provide the main insights of creating a hotel’s strong development strategy for the future.

So, such a considerable approach can help to operate the latest information to stay on top among the competitors in the area.

Big Data in Hospitality Industry: Summing It Up

To sum up, big data in the hospitality industry is a powerful and effective method of enhancing hotel performance and improving their strategies for staying competitive in this field.

For sure, the custom software development for travel and hospitality can greatly help to operate big data, analyze it, and get insights of improving the quality of the hospitality services.

We, at Intellectsoft, assist hospitality companies and their workforces, providing innovative solutions and approaches to enhance their workflow and increase the overall business performance.

Are you and your organization seeking an expert consultation in this area?

Contact our experts if you want to implement an innovative Big Data solution into your hospitality business and stand out among the competitors.

The hospitality industry depends a lot on keeping customers happy, but it’s getting harder to attract and keep them. The pandemic hit this industry hard, and now market competition is tougher than ever, with competitive offerings swaying customers. Hospitality businesses are willing to spend big to win customers back. The main questions for many are: how can we stay ahead of the competition, keep our customers, and increase revenue? Keep reading—we’ve got some answers.

Customers today have so many options that getting their attention is a real challenge. It’s not easy to make them choose your business over others. What worked 10 years ago doesn’t work the same way now. Back then, people often chose businesses based on reputation. But with new types of businesses (boutique hotels, craft cafes) popping up or big enterprises getting a new strategy, expectations have changed. The good news is these businesses have shown what works: great customer service. They focus on personalizing the experience, making things easy for customers, offering loyalty programs, and using smart technology.

In this article, we’ll explore these tech strategies and show you how they can help your business grow, and double the revenue. Keep reading to learn more!

The Importance of Customer Satisfaction in the Hospitality Industry

Customer satisfaction, which equals exceptional customer experience, is the backbone of the hospitality industry. It plays a central role in driving revenue and loyalty, as satisfied customers are more likely to return and recommend a hotel, restaurant, or other hospitality business to others. In fact, a study by the Harvard Business Review found that a 1% increase in customer satisfaction can lead to a 0.5% increase in revenue. Moreover, loyal customers are more likely to forgive mistakes and continue doing business with a company, even if they experience a negative encounter.

Let's quickly review the challenges the hospitality industry is facing right now so we can move on to the solutions and our case studies.

Challenges in Hospitality

As businesses navigate the changes in the hospitality industry, there are some key areas where a little improvement can go a long way. From improving customer service to embracing digital transformation and tackling labor shortages, we’ll take a closer look at today’s biggest challenges—and, more importantly, how technology can step in to help. Let’s get started!

Poor Customer Service

Even with strong and high-quality business offerings, poor customer service can drive potential customers and existing customers away. Common issues include:

Long wait times in customer service queues (it is worth remembering that our attention spans 8 seconds, and we live in a very busy world, so quick and efficient responses are more important than ever.)
Poorly trained customer service representatives
Lack of follow-up
Services not being done properly or quickly
Recall issues that require multiple service calls

These problems can frustrate customers. But, at Intellectsoft, we believe that the right approach, combined with technology, can address them effectively.

Digital Transformation Gaps

Approximately 50% of hotels are adopting new technologies, with 43% automating repetitive tasks and 39% upgrading existing systems.
Source: workstaff.app

Source: workstaff.app

While many businesses are adopting digital solutions, some still struggle with outdated systems and fragmented data. Legacy companies often face chaos when trying to manage their data and create new systems or add features.

Some of the recent examples include clients coming to us to create AI solutions for their services while their data simply was not ready for the advanced tasks. We advise stepping back, communicating with a company objective, and working on keeping the data clean (centralized, structured, and segmented).

When we’re asked to create advanced systems using AI, we always emphasize the importance of organized data. To train AI and build such complicated systems that truly work, you need to start from the very beginning—collecting, storing, centralizing, and organizing it. We encourage our clients to align all departments to work internally on the data so we can create a unified digital system that delivers personalized experiences.

If you’re unsure where to start with your data, we can help. Collecting feedback at various touchpoints along the customer journey is crucial for gaining insights into customer satisfaction and loyalty. Book an IT consultation with us, and our experts will guide you in mapping out a path to get more from your data and build a system that works for your business and team.

Reskilling Staff

The pandemic hit hard in early 2020, especially for the hospitality and travel industries. Even five years later, many businesses are still feeling the impact. Recruiting and retaining skilled staff has become a major challenge post-pandemic.

Reskilling to address technology’s impact is of utmost importance, as about 40% of hotel General Managers place it among their top three workforce challenges.

Source: Deloitte

We strongly believe that adopting the right technology can help. For example, creating an app to train your staff not only saves time but also ensures consistency in learning. AI assistants can also work alongside your team, helping with tasks like recruitment (providing industry insights, crafting emails) and staff training. Imagine having an app dedicated to making your team’s work easier and more efficient!

How Technology Tackles These Challenges and Supports a Customer-Centric Hospitality Culture

Automation, AI, and similar technologies may threaten many. However, the debate about replacing humans isn’t about that—it’s about cooperation and working hand in hand with technology to achieve the highest standards and establish brand-new “golden standards.” Technology is here to assist staff in listening to and collecting customer insights from data.

Let’s review some of our cases to see examples of how technology helps improve customer experience and supports customer service.

Examples of Intellectsoft projects

Property management systems (PMS)

We created a web platform and mobile app that makes managing daily tasks easier and offers extra services to improve residents’ experience. It gives a clear overview of daily activities and helps with managing units and users. Residents can easily book amenities, submit service requests, and report incidents. The platform also includes features for equipment management, key instructions, workflows, and custom permissions. This makes it easier for staff to stay on top of equipment and ensure residents have all the information they need. Plus, tools like announcements, quick votes, a forum, and a community calendar help build a connected and engaged community.

Guest Experience Management App

Our next app helped our client improve their guest experience by replacing printed marketing materials and the need for phone calls with a smart solution. Now, guests can easily order in-room dining, make reservations, and interact with staff— through a simple tablet in their room. The solution includes three parts: a custom in-room tablet with a variety of services, an admin panel for hotel staff and service providers, and a backend system that connects everything together. This approach makes things easier for guests and staff, improving both convenience and efficiency.

Existing Customers First: Building Loyalty with Personalized Touchpoints

Keeping existing customers is not just a strategy; it’s well-known that retaining existing customers is more cost-effective than acquiring new ones. In fact, research shows that it costs five times more to acquire a new customer than to retain an existing one. KPMG named customer retention as the number one revenue driver for the company.

Moreover, a 5% increase in customer retention can lead to a 25% to 95% increase in profits, showing the significant impact loyal customers can have on a business’s bottom line. Retention strategies, like personalized experiences and loyalty programs, can foster long-term relationships and generate recurring revenue, ultimately making them an invaluable part of any business model.

Personalization: How Technology Can Help?

Everyone loves to feel special—it’s part of being human. In hospitality, personalization has evolved from being a luxury to an essential standard. With the right technology to manage your data effectively, you can deliver those “wow” moments that guests won’t forget.

More than half of hotel chains are already using personalization features on their websites, booking platforms, and apps, and another 39% are planning to follow suit soon. They’re tailoring experiences to fit guest preferences perfectly.

Source: Deloitte

How does technology make it happen?

CRM Systems: They help you keep track of guest preferences, booking history, and special requests so you can offer services tailored just for them.
Loyalty Programs: Personalized rewards and offers show your guests that you value them, keeping them coming back for more.
AI Personalization: AI analyzes guest data to predict what they’ll love (from room upgrades to local recommendations) before they even ask.
IoT Gadgets: Smart room features like voice-activated assistants, or temperature controls adjust to your guests’ preferences, making their stay more comfortable.

With tech-powered personalization, you’re building loyalty and maximizing the lifetime value of every customer.

Our Case Study: Smart Hotel Management & Loyalty Program

For one of our clients, we created a smart room solution, complete with a custom IoT system. Guests can use a mobile app to control services, explore amenities, and find resort information-- with a special touch to their suite type. For the client’s entertainment business, we improved their legacy software by running a full IT and code check, fixing issues, and making the system better for customers.

Along with that, we developed a mobile app for the loyalty program, allowing businesses to effortlessly reward their customers and keep them engaged with exclusive benefits.

Our solutions not only helped the client with special experiences for guests; it also improved operations, cutting costs by eliminating inefficiencies. Here's what our experts shared:

"We transitioned away from ESB (Enterprise Service Bus) systems, which previously cost millions, and replaced them with more efficient, self-managed solutions. Similarly, we’ve implemented Device Farms that improved operations and saved resources."

Leveraging Software to Increase Upsell Opportunities

Here are some examples of tech tactics that will help your team sell more and introduce new offerings to existing customers, improve overall efficiency leaving your team grateful:

Dynamic Pricing Algorithms

For finance and marketing teams, manually calculating pricing by segment to introduce your clients can be incredibly challenging. AI-powered tools can strongly optimize these strategies by analyzing your database in detail.

Upselling via Apps

Boosting revenue in the hospitality business often comes down to personalized experiences. Imagine this: a guest books a room, and then your app suggests a spa package or a room upgrade at just the right moment. Later, it nudges them to book a dinner reservation or a guided tour designed to their preferences. With apps offering these personalized recommendations during and after bookings, you’re not just increasing your revenue per guest but also skyrocketing their experience. And you do it in a sustainable way, not by speculating, but by offering what your customers desire based on their previous experiences. It’s a win-win: seamless, helpful, and far from pushy.

Inventory and Resource Management Software

Making every resource count in your hospitality business is key. Inventory and resource management software allows you to effortlessly track everything from linens to room availability, ensuring nothing goes to waste. Having real-time insights to reduce overstock, avoid shortages, and optimize operations assists sustainably keep everything under control and know what you need to focus more. It helps maximize room occupancy by aligning bookings with available resources, ensuring every room and item is used effectively. This approach leads to smarter management, better guest experiences, and a noticeable boost to your bottom line.

Adopting these strategies not only optimizes your operations but also drives business growth. Ready to discover how technology can elevate your goals? We’re here to create a tailored solution for you.

Steps For Implementing a Customer Service Technology Solution

Improving customer service in hospitality doesn’t have to be a daunting task. With the right technology, you can smooth the path of your operations, speed up response times, and elevate the overall guest experience. Here’s where you can make it happen:

1. Understand Your Needs

Start by identifying the challenges your business is facing. Are you struggling to manage high volumes of inquiries, track customer feedback, or personalize the guest experience? Pinpointing your needs will guide you to the best solutions.

2. Pick the Right Tools

Choose technology that aligns with your goals. Look for solutions that are scalable, easy to use, and integrate effortlessly with your current systems. Options like CRM software, live chat tools, or a guest experience app can make a difference.

3. Equip Your Team

Technology is only as effective as the people using it. Train your staff to make the most of the new tools, so they can deliver exceptional service and resolve issues quickly. Confident, well-equipped staff creates happy, loyal customers.

4. Keep Improving

Once implemented, monitor how well the solution works. Are response times improving? Are customers more satisfied? Regular evaluations will help you fine-tune your approach and keep things running harmoniously.

Some Tech Ideas for Hospitality Businesses

CRM Software: Manage customer interactions and preferences.
Guest Experience Apps: Delight guests with personalized experiences right at their fingertips.
Amenity Management Systems: Simplify operations for everything from room service to facility bookings.
Helpdesk Software: Resolve customer issues optimally.
Live Chat Tools: Offer instant support and answers.
Social Media Management Tools: Keep customer interactions engaging and organized.

Integrating these strategies will not only improve your customer service but also deliver unforgettable customer satisfaction, loyalty, and, ultimately, your bottom line. Ready to take the next step? Book a consultation with our experts.

Conclusion

To wrap up everything we've discussed, customer satisfaction and experience are at the heart of hospitality. Retaining customers is more than just keeping them around—building strong, long-lasting relationships and consistently meeting their evolving needs. By understanding their pain points and offering personalized solutions, you can inspire loyalty and drive progress. With the right technology and continuous improvement, your business can stay ahead, let go of what no longer serves you, and keep growing.

At Intellectsoft, with over 17 years of experience in software development, our expert team is ready to help. We create everything from mobile apps to full-fledged portals and systems, leveraging the latest technologies like AI, Cloud, and Machine Learning. With deep experience in the hospitality industry, we’re here to craft personalized solutions that bring your business unforgettable customer experience and retain your valuable clients.

Ready to double your revenue and level up your customer retention strategy with personalized technology? Contact our experts, and we look forward to working hand in hand with you to build or revitalize the perfect app or system for you.

Tetiana Borysova

Content Writer

Importance and Impact of Big Data in Hospitality Industry