Hotel chains are recovering from one of the sector’s worst periods. The social and market context has highlighted the urgent need for hotel chains to invest in technology and start developing a data-driven culture to improve their occupancy rates.
The global pandemic caused by Covid-19 has prompted companies to digitize at a fast pace. The hotel industry is still a step behind other sectors in terms of digitization, technological leverage and the development of a data-driven culture.
In the case of the tourism sector and, more specifically, the hotel industry, the difficult situation has forced hotel chains to adapt to change and to commit to new innovative models. In this situation, technological tools are positioned as the key to the future development of the sector which, after the pandemic, is going through a time of transformation with the emergence of new tourism, travel and hosting trends.
Among them, the following stand out:
- Automation of reservations and check-in and check-out
- Smart Rooms
- Personalization of services and the customer experience
- Sustainable tourism consumption
- Digitalization of customer service
- AR and VR
The new macro trends in the hotel sector are linked to technology, digitalization and process automation.
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Making the right investment decisions at a time of transformation is not easy. What technologies or systems should companies in the sector invest in?
Below, we list what, according to our experience working with multiple hotel chains, are the best areas of investment in the hotel industry in 2022 to improve a hotel’s occupancy.
The 4 technologies you should invest in to improve the occupancy of your hotel
1. Invest in customer knowledge
Nowadays, knowing the customers or potential customers must be a priority for any type of company. Companies in the third sector are the ones that have the most direct relationship with their customers and the value of their service consists precisely in offering a satisfactory experience to the customer. Therefore, a hotel chain cannot not know its customers.
On the other hand, technological advances are also transforming the way consumers are and think. The speed and agility of technological processes translate into a progressive demand for greater immediacy on the part of customers, among other cultural and social changes that shape the preferences of the new consumer.
In addition, the abundance of information translates into greater decision-making power on the part of consumers. Today, the average customer is thoroughly informed before contracting a service. As a result, customers have a much better idea beforehand of what to expect from the establishment where they will be staying and are more easily disappointed if their expectations are not met.
In short, customers are more demanding so knowing them and taking their preferences into account is more important than ever before. Having a solid foundation of customer information and analytics should be an investment priority for hotel chains.
Asimismo, la abundancia de información se traduce en un mayor poder de decisión por parte de los consumidores. Hoy en día, el cliente medio se informa exhaustivamente antes de contratar un servicio. Por tanto, los clientes se hacen una idea previa mucho más fidedigna de lo que pueden esperar del establecimiento en el que se alojarán y se decepcionan con mayor facilidad si sus expectativas no son cumplidas.
In detail: What to invest in to know your customers?
2. Digitization and development of a data-driven culture
Digitalization remains one of the main challenges for hotel companies. Although large hotel chains already offer digitized and automated services to their customers, in general, hotel chains lag behind other sectors in terms of digitization and, even more so, in developing a data-driven culture that enables senior management to make data-driven decisions.
Despite having easier access to data than other industries, hotel chains’ business culture that still is not very data-driven. Many hotels continue to operate with spreadsheets or legacy systems. Companies in the sector must prioritize investment in technology and data-driven solutions to improve their occupancy rates and ensure long-term growth.
On the other hand, the industry is also lagging behind in terms of marketing strategies, which are much more developed in other sectors.
In detail: What to invest in to digitize your hotel chain?
- Invest in technological solutions for data exploitation and reporting: data integration solutions, interoperability, data governance, data management and data quality.
- Invest in analytical environments that foster comprehensive analysis and data-driven decision making.
- Invest in technology and digital training for employees
- Invest in digital marketing strategies
3. Information integration
One of the major obstacles in the hotel industry in terms of leveraging data is information silos. Hotel chains are used to working with management software and specific analytical technologies, but are not very advanced in terms of data integration and system integration.
Indeed, data integration is a major condition for having a solid information base that provides a 360-degree view to management. Not having a comprehensive view of the activity of one or multiple hotels is leaving the decision-making process to fate.
It is very common for performance data to be interpreted at the departmental level —each department has its own tools— but rarely are fragments of the same reality pooled to draw general conclusions and define overall improvement and change management strategies.
Even for the most technologically advanced companies, the fragmentation of information is an impediment to leveraging the data and information available.
In detail: What to invest in to destroy information silos?
- Invertir en sistemas analíticos completos que ofrezcan una visión de 360º de la realidad y cubran las necesidades informativas y analíticas de las cadenas hoteleras desde todas las vertientes.
- Invest in complete analytical systems that offer a 360º vision of reality and cover the information and analytical needs of hotel chains from all aspects.
- Invest in systems that make it possible to manage the activity of all the functional areas of one or multiple hotels from a single place.
- Invest in analytical systems that prioritize data cross-referencing and cross-analysis of information.
4. Predictive analytics
Predictive analytics and, specifically, predicting occupancy is one of the best allies for hotel chains.
Hotel chains often apply predictive analytics to forecast how many rooms in their hotel or set of hotels will be occupied during a specific period of time. Having this information in advance makes it easier to predict how many staff team members will be required, supplies needed, etc. On the other hand, predictive analytics is also useful for forecasting the overall demand of a hotel’s set of services to adequately satisfy our customers, optimize resources and increase customer profitability.
Occupancy prediction is key to proper resource management, strategic planning, improved operational efficiency and risk reduction, among many other things.
In the case of hotel occupancy prediction, machine learning offers more accurate predictions and recommendations that allow hotel chains to optimize their occupancy rates.
Before you go…
Get a more comprehensive and in-depth view of the major challenges that the hotel industry will face in the next 5 years and what strategies to prioritize to address them in the e-book “Hotel Industry 2022-2025: Grand Challenges and How to Overcome Them”.