According to reports by Facts and Factors, the hospitality industry was valued at around $3.9 trillion in 2021 and is expected to reach $6.3 trillion by 2028, rising at a CAGR of roughly 10.24% between 2022 and 2028. With the spotlight on Large Language Models and Generative AI, Consumers are increasingly leaning toward hyper-personalized products and services. The hospitality industry is also gearing up to cater to this rising demand.
Hyper-personalization demands have set new benchmarks in the hospitality industry. As the old saying goes, “Customer is King,” customers increasingly seek more value for the money they pay. Hotels and resorts can now cater to this demand and offer unique services for every customer who walks through their doors. This expectation has marked a significant shift in how customer service has been carried out. These are the major tested and proven methodologies implemented by major players in the market.
Primarily, hyper-personalization goes beyond ordinary customer segmentation and demographics. It involves leveraging advanced technologies such as AI and ML to analyze vast amounts of data. The groundwork of hyper-personalization is data integration. Data is collected from various touch points such as online bookings, social media exchanges and prior stays. This data is used as a foundation to create comprehensive customer profiles that summarize basic information, preferences, behaviors and feedback.
A robust CRM system is a necessity for this operation. These systems should be capable of unifying data from contrasting sources and providing a holistic view for every guest, and AI can collate all the information and generate accurate customer profiles.
Marriott Bonvoy is an exemplary case of effective data integration and customer profiling. The app consolidates data from various touchpoints, including previous stays, dining preferences, and even spa treatments. This comprehensive approach enables Marriott to create detailed customer profiles, helping them anticipate individual needs and deliver personalized services.
"Enterprise architects must integrate real-time data solutions with existing systems and data sources to provide a complete picture," Niraj Naidu, APJ Head of Field Engineering, Datastax.
After establishing a solid profile, the next step is to utilize predictive analysis. This data is used to foresee the guest's liking and behavior. ML algorithms can examine past data to discover outlines and trends, enabling them to predict what services, amenities or features a guest will likely opt during their stay.
For example, if a guest is observed to request rooms at a particular time, the analytics can be applied to their prospective bookings and can also be used to send targeted promotions at the right time.
Hilton Hotels is at the forefront of implementing predictive analytics for personalized recommendations. The company uses machine learning algorithms to analyze guest behavior through its Hilton Honors loyalty program. By understanding patterns in booking history and preferences, Hilton can proactively offer tailored recommendations for room upgrades, amenities, and local experiences to enhance the guest's stay.
"Using data analytics is a must of risk management. We need to predict which steps of ours, other departments or even external parties will have risk impact and adjust for it timely so we stay within our share-holders risk appetite,"Kirill Odintsov, Head, Home Credit Indonesia.
A perk of hyper-personalization is that is utilized the most for is pricing, Dynamic pricing powered by AI algorithms allows hotels to adjust prices based on real-time demand, competitor pricing and, of course, individual guest behavior.
A commonly used strategy is to provide early booking discounts for guests who book rooms well in advance, and conversely, last-minute bookers can be given promotions to fill out the vacant rooms. This dynamic pricing tactic maximizes not only the revenue but also enhances the exclusivity the guest senses from the preferential treatment.
Expedia Group, a global online travel company, demonstrates the effective use of dynamic pricing strategies. Through its platform, Expedia dynamically adjusts hotel prices based on factors such as demand, time of booking, and individual user behavior. This allows hotels to optimize revenue by offering personalized pricing to different segments of guests, maximizing occupancy and guest satisfaction.
"Finance functions must remain adaptable and responsive to sudden changes while also considering long-term challenges," Carlos Martin Young, Finance and Corporate Development Director, Campari Group.
For maximum effectiveness of hyper-personalization, hotels must embrace the latest technological trends. Smartphone apps, chatbots, smartroom devices and other means are increasingly utilized by hotels for seamless interactions with guests.
Mobile apps now serve as central hubs for guests and hotel servicing executives. Chatbots powered by NLP can assist guests 24/7 by providing information, making reservations and making miscellaneous requests. Smart room devices with voice assist with state-of-the-art features can allow guests to have the best room experience by imbibing a luxury feature.
"Machine learning plays a pivotal role in categorizing inventories, enhancing truck loading efficiency, and redesigning packaging for reuse and reduced waste, "Vinay Sheel Bansal, Head of Supply Chain and Procurement, Gharda Chemicals Limited.
The Ritz-Carlton stands out for its innovative technology integration, particularly in using smart room devices. The luxury hotel chain has implemented voice-controlled assistants in rooms, allowing guests to personalize their environment effortlessly. This technology not only adds a layer of sophistication to the stay but also contributes to a seamless and personalized in-room experience.
As the hospitality industry continues to evolve, hyper-personalization emerges as a game-changer that can redefine guest experiences. By harnessing the power of data analytics, artificial intelligence, and innovative technologies, hotels and resorts can elevate their services to unprecedented levels of customization. The key lies in understanding individual guest preferences, predicting their needs, and seamlessly integrating technology to deliver personalized experiences that leave a lasting impression. As experts in the field, staying ahead of these trends and embracing the era of hyper-personalization is not just a competitive advantage; it's a necessity for shaping the future of hospitality.
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