Hotel Investments: Invest In Big Data As Long As Your Competitors Are Still Sleeping!By Michael Toedt - Managing Partner and CEO at TS&C GmbH
Each year, many hotel managers ask themselves what and how much they should invest in to meet the expectations of their guests. Without doubt guest satisfaction alongside communications is the most important variable influencing guest loyalty and repurchase behavior.
Thomas Reisenzahn, former secretary general of the Austrian Hotel Association and today managing director of GFB Prodinger Tourism Consulting, recently stated that one of the main reasons for the increasingly difficult situation of hotels in the Alpine region was false and costly investments. I completely agree. However, I believe that this statement is not only applicable to hotels in the Alpine region, but to hotels everywhere!
Today, approximately 50% of all investments made are questionable, if not wrong. This number is quite astonishing. But why is this the case?
The answer is rather simple: Too often, hotel managers have no idea what their guests really want!
A high-quality guest survey requires expertise
Hoteliers tend to use social media analyses obtained from rating sites for decision-making. But these sites are marketing platforms and complaint management channels. They were built for that and are not suitable for basing budget decisions on.
Data from these channels should rather be used to question and verify the results in a guest survey using a questionnaire, which was correctly developed for the hotel. One of the key principles of market research is that you should know the target group giving the answers. Only if you know the needs of your core target group will you be able to take sustainable decisions and then tailor and design your product according to these needs.
Hotel managers will only be able to take the right decisions if they use a questionnaire, which has been developed specifically for their property. Each hotel has its own challenges and particularities, which have to be considered. Preparing a valuable and correct questionnaire requires expertise. Many hoteliers look at what the hotel chains are doing, but are they the right benchmark?
A lot of hotel owners believe that the individual brand is most decisive. Unfortunately, market research does not provide any helpful statements on this, which can be used for the meaningful allocation of investments. I do not know of any hotel chain, which sends out questionnaires containing reliable general statements.
The prerequisite for low-risk investments is to identify what priority the individual business units have for the target group. Only then targeted investment decisions can be taken. Make sure that you and/or your survey provider can answer this important question.
Experience is good, facts are better
Albert Einstein once said: God is not guessing!
Big Data divides mangers in two groups – the ones who know what they are doing and the ones who think they know what they are doing. Which group do you belong to?
For investment decisions this means that gut feeling and experience are good, but only make sense when underpinned by hard facts. Big Data analyses can provide these profound insights.
Use the potential, which cross-linked data nowadays provides. It is simply fascinating how obvious the results are.
Dr. Michael Toedt is the founder and CEO of Toedt, Dr. Selk & Coll. GmbH, a leading Big Data Marketing and CRM company. Operating at the intersection of business and technology, he helps hoteliers with the software dailypoint™ to use the tremendous increase of data in order to become data-centric. Dr. Toedt has over 25 years of experience in operations, technology and marketing. He is the author of several books (among others “Big Data – Challenges for the Hospitality Industry” (2013) and “Data Revolution – How Big Data Will Change the Way of Doing Business” (2014) and his articles are published by journals on a regular basis. Dr. Toedt holds a doctoral degree in management science. He is assistant lecturer at the University of Applied Sciences of Munich for the subject “Customer Relationship Management in Tourism” and as guest lecturer at various universities such as the University of Applied Sciences of Bad Honnef, Kempten or NDS Hôtelleriesuisse. In the past, Dr. Toedt was regional vice president of SANSORA INTERNATIONAL, a subsidiary company of the Schoerghuber corporate group and accompanied many hotel associations during the production of their central customer and marketing data base. He was raised in his parents’ hotel and after completing a mercantile apprenticeship he graduated as cook to be employed in the 5-stars restaurant Hotel Koenigshof in Munich. 1995 he began his business economics studies at the University of Applied Sciences in Munich. During this time he visited the Cornell University, NY and is now President of the German Chapter.
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