Today’s blog post is a part of a series that I will be sharing over the next couple of weeks related to what I learned at the Agilysys Inspire User Conference in Las Vegas, March 18-20, 2024.
I learned to digitize to personalize. Data-informed organizations better serve customers by tailoring offers, activities, and amenities based on shared preferences, past interactions, current transactional insights, and predictive modeling.
Consider these stats:
- 90% of leading marketers say personalization significantly contributes to business profitability. (Google via 2024 VIPDesk Connect report)
- 91% of customers are more likely to shop with brands that recognize, remember, and provide relevant offers and recommendations. (Accenture)
- Companies that thrive at personalization earn 40% more money from these activities than the average competitor. (McKinsey)
- While customers want businesses to understand their individual requirements and expectations, 66% feel they are often treated like a number. (Salesforce)
Hospitality businesses can share data between devices and leverage this data to create more personalized offerings. These algorithms analyze vast amounts of guest data encompassing preferences, past behaviors, and interactions. Hotels can then use this data to personalize every aspect of a guest’s stay, from room temperature settings and amenities to dining recommendations.
Beyond leveraging data, hotels can further tailor the experiences by providing guests with optional guest room upgrades (e.g., size-type, view, club level, etc.) and enticing add-ons (e.g., charcuterie plate, champagne, chocolate-covered strawberries, etc.) during their online booking experience. Statistically, more guests will choose these upgrades and add-ons when presented at time of booking versus day of arrival.
Another tactic is to unbundle packages to allow guests to personalize their customer journeys like airline passengers do. Years ago, the airline industry began unbundling airfare that used to include baggage handling, on-board meal service and entertainment, emergency row and bulkhead seating options with more legroom, etc.
Today, airlines present a suite of à la carte options for passengers to select based on their preferences and budget. You can choose to pay $40 to check your bag or pack lighter and carry on at no charge. You can choose to pay for an on-board meal or pack your own snacks. You can choose to pay for more legroom or deal with limited space for the duration of your flight.
By unbundling product and service offerings, hotels can shape guest perceptions of value for the price paid by letting guests decide what’s important to them and what’s not. Everything that historically was included in the cost of a guest room is a candidate to isolate as an optional add-on. This includes room view, early check-in, late check-out, breakfast vouchers, fitness center* (health club, pool, jacuzzi, sauna, locker rooms, etc.), recreational facilities (tennis, golf, pickle ball, etc.), in-room branded amenities, coffee service (whether in-room or lobby station), newspapers, nightly turndown service, daily housekeeping, parking, high-speed WiFi, etc. (For instance, prior to 2008, who ever thought airlines would be charging for baggage handling? Or, before the 2020 Covid pandemic, who could conceive of a full-service hotel not offering daily housekeeping?)
A word of caution: When presenting these types of unbundled options, it’s important to avoid the perception of nickel and diming customers. Management must create pricing strategies that reflect the true value of individual services ensuring transparency, and fairness for customers.
To gain a deeper understanding of individual guest preferences and needs, capture, archive, and leverage data. Present options and unbundle packages to enable guests to customize their experiences. Doing so can bolster guests’ loyalty by demonstrating that their needs are both recognized, understood, and valued. And it’s well-documented that these guests are responsible for 80-90% of the positive word-of-mouth about a company or brand, are less price sensitive, and have higher return and repurchase rates.
*Research from Cornell’s School of Hotel Administration found that, while 46% of guests intend to work out pre-arrival, only about 22% of guests actually use a hotel’s fitness facility. Even so, 100% of guests typically pay for this seldom-used amenity. It’s bundled in their room rate.
