Hotel Chain Has No Reservations About Big Data

 
 
By Samuel Greengard  |  Posted 2013-12-20
 
 
 
big data analytics

Catering to the whims of upscale travelers is no simple task. But at Denihan Hospitality Group, which operates 14 boutique hotels in New York, Chicago, Washington, D.C., and Miami, it's an absolute necessity.

"Hospitality is an ultracompetitive business, and how a company uses data determines whether it is able to achieve a competitive advantage," explains Menka Uttamchandani, vice president for business intelligence.

The 50-year old firm has put big data and analytics at the center of its operations. Using IBM big data and analytics software, Denihan is tapping into data to gain deeper insights into multiple aspects of the business, including improving guest experiences, personalizing marketing campaigns, and dynamically adjusting pricing in order to maximize revenues and profits across its 3,450 rooms.

Visual dashboards track historical performance and provide forward-looking metrics, including forecasts, budgets, competitive standing, and year-over-year performance by account, channel and segments. Teams can drill into reports for a deeper and actionable view of data.

The system is updated once a day, and managers receive an early morning notification via their mobile devices."The dashboards make it easy for senior management to gain a big-picture view of the business," Uttamchandani says.

One of most powerful capabilities, he says, is a forward-looking dashboard that examines bookings. By plugging in historic data and analyzing past and current purchase patterns, the hotel chain is able to better understand customer behavior.

"We are able to understand how and when bookings come in, and, rather than discounting, [we can] leave prices intact as the situation warrants," she explains. The company can also optimize pricing when it's clear that occupancy levels are lagging, and can even identify which agents, customers and channels to focus on.

Optimizing pricing is only part of the picture, however. Denihan has also used the analytics software to identify profitable customers who haven't stayed at a property in some time and to win them back through targeted promotions. In one campaign, the chain offered one night free "with no strings attached" to guests. This resulted in a 60 percent uptick in return stays from these guests after the initial complimentary visit, Uttamchandani notes.

In a separate initiative, executives examined guest feedback and profile data in order to better understand guest needs at its Affinia Manhattan property in New York City. This led to Denihan remodeling each of the hotel's rooms to create a relaxation zone, a work zone and a sleep zone. "We were able to understand customer preferences and desires at a level that wasn't possible in the past," Uttamchandani explains.

The breadth and depth of the analytics data has provided other benefits. The company estimates that it has achieved a 40 percent improvement in productivity among subject matter experts, including revenue directors. "They can put their energy into strategic issues and the activities that produce the best results," she says.

Uttamchandani says that the company plans to expand the use of analytics, including predictive analytics, in the months ahead. What's more, she hopes to tap into unstructured data from surveys and social media to realize further gains.

"We are able to run the business far more effectively by gaining deeper insights into customers," she reports. "Big data and analytics allow us to see what's really important and take the appropriate actions."