WHY BIG DATA IS CHANGING SUPPLIER ARTICLE


How well is your hotel performing? Potentially a broad question. But there are really only three things you need to look at. The first, how much you’re earning from your rooms. The second, how much you’re spending to fill them. Third, and most importantly, your guests. The fuel your hotel runs on.


O


nce you can see what each guest is actually worth to you, over their life- time, and which campaigns are deliv-


ering your best guests at the lowest cost, then you can start making better decisions. Those decisions will help you earn more from your rooms, make your media spend work harder, and deliver better, more person- alised guest experiences. The surprising truth? The answers you need


are all there. They’re just hidden in a sea of data. It’s a question of sifting through it to find the patterns. And that’s not easy. Our biggest data table has 1 billion lines of data in it, and it’s growing rapidly. But that’s what big computers are for. They


can’t decide your business strategy for you. They can’t decide whether you should be focusing on delivering volume or reducing media spend. And they can’t decide whether your current dependence on OTAs is sustain- able. Those decisions are always yours. What they can do is crunch through huge amounts of data, separate the useless from the useful, spot the interesting patterns, and present them as actionable insight you can use to make better decisions to impact your bottom line.


Understand your guests and earn more from your rooms The best way to think about it is this – what’s stopping you earning as much from your rooms as you can? If you’re using an OTA, there are two answers. 1. The guest has been acquired expensively


and will continue to be so – because OTAs essentially lease your guests to you, charging the same high commission every time 2. You’re forced to offer that room at your


‘best price’ – regardless of how valuable that guest is to you But how valuable a guest is to you is about


much more than what rate they’re paying on a given day.


8 | Technology Prospectus 2018 8 | Technology Prospectus 2018


“How valuable a guest is to you is about much more than what rate they’re paying on a given day.”


Hotels know this. But this truth is hidden


when using RevPAR alone. Here’s why: Imagine two guests offering to pay £100 for


your last room. But one booked direct, while the other booked through an OTA. Every hotel would rather have the guest who booked direct, because they’re cheaper to acquire. But accord- ing to RevPAR, both guests are worth the same. NETRevPAR – which takes acquisition costs


into account – is a better measure, but still doesn’t tell you the whole story… Why? Imagine both guests are paying the


same and cost the same to acquire. Accord- ing to NETRevPAR or ProPAR, they’re equally valuable. But are they? What if one guest had never stayed with


you before, while the other has stayed half a dozen times? You’d take the guest who’d stayed before. Because they’re more likely to keep coming back. So they’re worth more to you, over their lifetime. Hotels know this intuitively, but they don’t


usually factor it in when making decisions that affect their bottom line. That’s where we come in. By using your own data to accurately fore-


cast occupancy, Noetic1 gives you the confi- dence to only use OTAs when you need to – so you can stop selling your rooms for less than they’re worth.


But it does something even more impor-


tant. With smart guest profiling, Noetic1 puts a £ next to every guest you’ve ever had, so you can focus on filling your rooms with the right guests. Guests who cost less to acquire and stay more often.


Understand your guests and make your media spend work harder Leaving aside becoming part of a major hotel brand, there are two main ways to fill your rooms: 1. Through OTAs 2. Direct (whether that’s via organic search,


PPC and retargeting campaigns, or through Google Hotel Ads) OTAs are good at delivering high volume.


They also give you the worst deal i.e. a repeat- edly high cost of acquisition that delivers price sensitive and non-loyal guests, where the OTA keeps control of the guest relationship. Conversely, direct campaigns tend to deliver


lower initial volumes, but at a much lower cost. And crucially, you own the guest relationship. That’s important because it means you have the information you need to start making that relationship a long-term and profitable one. While the initial volume may be low with


direct, the repeat booking rate of ‘direct best guests’ can be phenomenal. Yet, amazingly, many hotels miss this key insight entirely. The name of the game is to use highly tar-


geted media campaigns designed to bring you the type of guests you really want i.e. guests who are most likely to keep coming back, and keep booking direct through your site – so you get higher value guests with a lower


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