As travel continues to rebound hotels are seeing guests return, recording global on-the-books occupancy for the first quarter 2023—9 percent higher than the same time in 2022 according to Amadeus’ Demand360 data. As a result, average daily rates remain high, and with guests paying higher costs they expect more from their stay. This puts mounting pressure on hoteliers to deliver for their guests.
In this environment, personalization is an important strategic consideration for all hoteliers as it gives guests what they want and allows hotels to make the most of their assets. As guests are being presented with an increasingly wide range of choices, hotels must make sense of the reams of data at their disposal to reach the right people at the right time with the right offer in order to build brand loyalty.
What Is It and Why Implement It?
Personalization is tailoring what you offer based on the information you have about your customer. This can be done in different ways. Often we think of full personalization as attribute-based selling, in which hotels replace the traditional packages like "standard," "deluxe" and "suite," with specifics such as TV, Wi-Fi, gym access, balcony or views. Guests can then be shown a room which aligns with their preferences and select attributes that match their exact needs.
While attribute-based selling remains the holy grail of personalization, there are many other ways in which hoteliers can deliver a personal touch for guests to maximize their experience. We recommend that hoteliers work with technology providers to equip their offering with the following five types of personalization:
- Hotels can offer their guests customized packages of amenities and features to customers. For instance, guests can be offered a buffet breakfast, an extra spa day or specific room amenities as part of their stay.
- Hotels can also customize their rooms as not all guests will desire all the trimmings. Hotels can leverage the information they have on users from previous stays to offer amenities like additional bedding, TVs and dressing gowns to those who are likely to want them.
- Loyalty programs can be used to improve personalization as hotels can use what they know about the guest through their interaction with the program. The hotel team can offer discounts or freebies that carry the added benefit of directly increasing brand loyalty.
- Hotels can provide guests personalized recommendations, such as restaurants, local activities and sightseeing tours. Hotels can directly provide these services themselves, earn a referral fee or benefit by simply improving guest satisfaction. SEPAQ Hotels in Quebec put this in action and were able to secure hundreds of purchases through targeted package promotions.
- Hotels can also communicate with guests in a more personalized way, through apps, texts and email, always using the guest name and allowing them to keep guests informed about the offers they have which may be relevant to them. A study from Accenture found that 56 percent of consumers were more likely to buy from a retailer which recognized them by name, which suggests significant advantages for hotels that communicate with consumers in a personalized manner.
There are significant gains to be made from a successful personalization strategy. According to a 2022 traveler survey from the New York University School of Professional Studies Jonathan M. Tisch Center of Hospitality, 85 percent of respondents say the traditional method of booking hotel rooms creates "uncertainty." Hotels can reduce uncertainty by offering packages which spell out exactly what the guest is getting and giving these to the guests who want it. Furthermore, Accenture data shows that 65 percent of consumers are more likely to buy from a retailer that knows their purchase history. The evidence is overwhelming: personalization is a win-win for the industry and consumer alike.
More Flexibility
To personalize their offering, hoteliers must first equip themselves to use the data at their disposal. An important component of any personalization strategy is accurately tracking consumers over time. Building relationships with consumers is an iterative and continuous process—what works for a guest in their early 20s is unlikely to work when they are in their late 50s.
This year, Amadeus released a piece of research dividing travelers into groups of four Traveler Tribes based on their preferences for travel now and their forward outlook to 2033. Different groups prefer different approaches, some prefer the security of knowing exactly what they are booking, while many others will just want the simplest possible process. This research expanded on research done in 2015, the commonalities and difference between the two pieces of research show that the groups have certain similar outlooks with actionable insights but also that traveler preferences should be tracked over time for changes in outlook. Therefore, successful personalization strategies need to be informed by constantly refreshing data on consumers forward-looking outlook so that they can keep pace with consumers over their lifetimes.
The prevalence of personalization in streaming, online shopping and social media mean that most people interact with highly personalized environments on a day-to-day basis, sometimes without even being aware of it. This creates higher expectations, but also offers opportunities. Today’s streaming giants and social media networks grew in-part because they promised to harness data to tailor content to their users, and the hospitality industry is ripe to mobilize the rich data at its disposal to exploit similar opportunities.
Peter Waters is executive vice president, hotel IT solutions, hospitality, at Amadeus.