Today's modern guests don't just want to make a reservation.
They want their preferences, interests and needs to be understood by "their brands." They are used to this from brands such as Netflix with its personalized user interface, as well as from Amazon or Starbucks.
Forbes even claims that guests are willing to pay a premium if the value of an experience is considered unique. Accordingly, brands that have recognized this achieve an additional profit of 10% to 30%.
Attitude vs. Attribute
Attribute-based selling is the idea that instead of selling hotel rooms by room category, guests can take a "pick-and-mix" approach to control their own purchase paths.
The technology transformation we have embarked upon is driven by customers longing to have personalized offers, being spoiled by the retail industry. However, today’s bookings systems still require guests to book a room before purchasing something else, or not a room at all. To achieve a personalized purchasing journey, intelligent retailing removes the dependency to book a room first, and enable the guest to book anything in any order. This includes a typical hotel room to be broken down in those selling features that create it.
In that context, the hotelier is limited only by imagination in how they bundle features and attributes. Everything is available at any point in time. Before the sale, before arrival, during the stay and even after the stay. So much for the theory.
Is a Mindset Change Required?
The mindset is there. Hoteliers are looking for other revenue streams out of necessity for a long time but appear limited in thinking about themselves differently. Traditionally, hoteliers are accommodation providers with restricted opportunity to broaden their business — and that’s the answer to the process of growth and development.
‘How To’ in the Hotel Industry?
To stand out, successful hotel brands need to offer a personalized experience with relevant packages as well as tailored service, coupled with a multi-channel sales strategy.
This appears to be rather difficult to execute, as the industry is dispersed and fragmented. The focus of technology is still on the in-house guest and associates — an "inside-out" view, also in terms of sales, design and service standards. Applications are independently built, not on one single platform, and require deeper integrations. And open API alone is not the answer, it is mainly a door — often to a maze — but an enabler to customization.
The technological transformation we need to address is being driven by guest demand for individualized offerings. To understand behavior and patterns can no longer be driven by only mining property management system (PMS) data. Ideally data is centrally-captured, and through machine learning, refined and serviced up in the customer relationship management (CRM) environment, and elevated by margins.
Data Is Key
The key to "outside-in" marketing is data: The industry must understand that in a modern world, leveraging data and insights is important to provide guests with what they crave. It's important to identify guest behaviors and needs — and that's not just based on PMS data anymore.
Ideally, the relevant data from multiple, internal and external channels is collected centrally and refined by automated intelligence, maintained in the CRM environment — and its value thereby significantly increased. Successful hotel brands offer personalized and relevant experiences based on this, coupled with a smart multi-channel strategy to stand out in the market.
Man Plus Machine
In the end, of course, it's not all technology and data: Even Netflix states that business decisions were based 30% on data and 70% on human intuition. It's all about using both components intelligently to truly identify human needs!
Is attribute selling really the solution to personalization?
To me, the answer is no. The industry is on the right path to drive a more guest-centric journey, surely. But it remains limited to easier packaging, bundling, upselling and cross-selling.
We continue to chew on the tail end of the funnel, using antiquated PMS. But we also need to once and for all stop thinking in demographics to recognize true individuality of our guests throughout the entire journey. Data remains key to execute a true outside in marketing strategy.
Now is the time to finally start seriously recognizing the individuality of our guests on a micro level. What is needed are strong e-commerce capabilities that reach into the complete end-to-end guest journey.
We still have a long way to go to create a “Hotel Netflix” purchasing experience, but it remains exciting!
Philip Schaetz is founder and managing director of CUBE. Prior to establishing CUBE in 2018, Philip enjoyed a long career in revenue management, distribution expertise and sales and marketing strategy in senior global positions for some of the world’s largest hotel & resort brands.
The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or CoStar Group and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to contact an editor with any questions or concern.