Hotel Data Analytics - Boost Hotel Revenue & Performance

In a world where the number of smart travelers and smart hotels has increased greatly, hotels are data-rich. And this is exactly why hotel data analytics is a popular practice.

Just like any business should have a complete understanding of its clients and their projects. Similarly way, a hotel needs to have a thorough understanding of its guest and their needs, market, and competitors, among other things. Data analytics, a branch of data science, facilitates that for hotels. 

‘We strongly believe that the use of data science, big data, and artificial intelligence will be crucial to the travel, tourism, and hospitality sector.’   

- Ritesh Agarwal, Founder, and CEO of OYO Hotels and Homes   

A lot can be gained through studying and analyzing the collected digital data. Data analytics for hotels allow properties to create more targeted strategies and save time and cost, all whilst ensuring top-notch guest experience.  

Let’s understand what data analytics is, why, and how hotel data analytics increased efficiency and business.

What is data analytics?

Looking through and examining large data sets to identify patterns, and behaviors, draw conclusions, substantiate decision-making, and predict future trends and techniques, is data analytics.  

The data comes in the form of information or facts or numeric and may be digitally collected and presented.  

Data analytics is a discipline that has penetrated every industry, every business. The Global Data Analytics Market size was around $34.81 billion in 2021 and $41.22 billion in 2022. And the numbers are projected to grow extensively in 2023.  

Why do hotels require data analytics?

Hotels, during most parts of the year, are brimming with guests. They serve millions of people in their lifetime and hence, are data-abundant properties.  

Hotel Data Analytics can turn a simple behavioral or other kind of data into a hotel’s biggest advantage. It gives meaningful insights into guest patterns, accounts, market dynamics, etc., helping hotels strategize their numerous policies, operations, and campaigns for maximum results.  

Let’s look at some of the benefits of hotel data analytics:

• Facilitates analysis of traveler preferences for better marketing campaigns and guest experience 
• Offer insights into booking and spending patterns to help hotels form pricing strategies and enhance future occupancy rates. Additionally, it helps hotels identify the most profitable services and segments 
• Helps in hotel competitive analysis that further facilitates the creation of an effective pricing strategy.
• It helps with tracking labor costs per occupied room to reach optimal staffing levels that facilitate enhanced guest satisfaction 

Big hotel brands such as Marriot, Starwood, Denihan, etc., have made use of hotel data analytics to enhance their operations and services.  

Use of data analytics in hotel industry

Hotel Data Analytics is used to enhance their performance and manage revenue. Let’s look at how data plays a major role in performance and revenue aspects.  

1. Performance enhancement

All the data is not worth analyzing. Therefore, hotel management prioritizes some key performance indicators (KPIs) to evaluate the overall health and progress of the property and its core objectives.  

Comparisons on performance are drawn against historical data, competitive analysis, and against market or industry-wise, or wide averages. An overall KPI is gross operating profit (GOP).  

However, a hotel just does not have overall KPIs but also analyzes its performance based on departmental KPIs. These KPIs are evaluated for each different department to carry out a narrower and more detailed evaluation.  

A departmental KPI, for example, for the housekeeping department could be the average room cleaning time.  

Let’s look at the KPIs for some of the important hotel departments:  

Guest experience 

Offering an enhanced guest experience involves multiple forces working behind it. From front desk to housekeeping to lavish hotel restaurants and wellness services, all work in sync.  

Real-time data is tracked from the online reviews and post-stay surveys and feedback, in the cases of some hotels, to measure the overall guest satisfaction and sentiment after the hotel has rendered its services. This data is further used to identify trends and guest patterns and study their behavior, to be ultimately used to enhance services and prepare a more targeted marketing strategy.  

Some examples of guest experience KPIs:   

• Average ratings in reviews and surveys,  
• Departmental ratings in particular,   
• TripAdvisor rankings, and Net Promoter Score (NPS) 
• Guests stay frequency and average spend 
• Customer lifetime value (CLV) 

Marketing 

Hotel marketing plays an important role in hotel visibility and engagement in the market where options are abundant. Hotels use the data they receive or collect through multiple marketing channels like hotel website and SEO, email and WhatsApp marketing, social media engagement, etc., to study and analyze market trends and patterns.  

This data is further used to study the return on investments to better resource allocation and optimization.  

Some examples of marketing KPIs are: 

• Weekly/ monthly website activities including the visitors, page views, bounce rates, and conversions
• Email and WhatsApp marketing metrics like subscription rates, email open rates, and click-through rates (CTRs)
• Social media metrics include followers and engagement

Food and beverage

Food and Beverage are running expenses that are incurred by guests in a hotel. Thus, hotel restaurants, bars, and room service need to keep a tab on the data to evaluate the tastes and preferences of the guests, among other things.  

Overshooting costs and plummeting revenues can cost a hotel’s balance sheet heavily at the end of the business day. Thus, revenue data from this department is analyzed to come up with ways to enhance guest spending through menu updates, upselling and promotional campaigns. This data helps hotels to further target guests with a high likelihood to spend on F&B on the property through analysis of guest spending.  

Some examples of Food & beverage KPIs: 

• Average check
• Average table occupancy
• Food and beverage and labor costs of sales
• Revenue per available seat hour 

2. Revenue Management

Revenue management is an important aspect of any business. It decides the present and future of the business operations. Thus, data analysis is more a necessity rather than an option for this department.  

External such as market demand and dynamics and competitor activities as well as internal data like historical performance and business on the books, are studied together. This analysis of the data assists hotels with pricing decisions and strategies, channel and inventory management, marketing campaigns, and demand predictions.  

The following factors are included in the usage of hotel data analytics for Revenue Management: 

• Real-time demand metrics
• such as average daily rate (ADR), occupancy (OCC), revenue per available room (RevPAR), etc.  
• Inbound search volume  
• Ranking of Online Reputation 
• Booking/demand patterns 

Market has multiple hotel data analytics software that automate the entire process, making it more streamlined and centralized. These tools include property management systems (PMS), revenue management tools, digital marketing platforms, point-on-sale systems, payment systems, etc., for multiple department KPIs. 

Types of Hotel Data Analytics

Data collected and its analysis can be divided into 4 categories. These divisions are as follows:  

• Descriptive analysis is all about past data. It helps hotels gain insights into ‘what had happened’ 
• Diagnostic analysis helps hotels to study the data to reach the cause of an outcome. Thus, it offers answers to ‘why it happened’.
• Predictive analysis prioritizes and comments on the future. Making use of historical data, it attempts to predict future events and outcomes.  
• The prescriptive analysis draws on data to determine the best decision or course of action to take to solve a problem or reach an objective.  

What type of analysis to undertake should depend on the objectives and data type available with the hotel.  

Conclusion

A report suggests that businesses that practice data analytics experience 25% faster innovation cycles, 17% enhanced efficiencies, 13% more accurate and impactful R&D, and 12% better goods or services.

This report presents more than one reason for businesses, especially hotels that are service-driven, to collect and study guest, market, and competitor's data, in order to create more effective and optimized hotel operations, guests, revenue, and marketing strategies.  

And we at BOTSHOT also highly value the role of hotel data analytics in the hotel business. Working closely with multiple luxury hotels for so many years, experts at BOTSHOT identified what all different aspects of the hospitality industry could incorporate data analytics and how and came up with the following products that support data analysis for hotels:   

HEDA: This product automates the guest feedback system and helps enhance guest experience and satisfaction. 

Along with collecting pulse and post-stay surveys and feedback, HEDA also facilitates hotel data analytics for better guest understanding and service effectiveness.  

It analyses intensive data received in real-time from a single dashboard and tracks department performance to implement necessary action plans.  

CreateWith: This product helps a hotel to build websites, integrate them with booking engines, and optimize them for search engines, to gain maximum traction and engagement.  

CreateWith helps a hotel receive feedback from TripAdvisor’s travelers and more – all in one place, 24 hours a day, 7 days a week, facilitating review and rating analysis.  

Furthermore, hotels create an SEO-friendly website using this product, which further helps them to study performance metrics such as weekly/monthly visitors, CTRs, bounce rates, etc.  

Visit our website to check out more of our automation products. Reach out to us to transform the way you operate and interact with guests.