Like no other industry, the hotel business relies on personal customer loyalty and personalization. Especially in post-pandemic times those topics will be more important than ever for hotels to succeed and stand out.
What is personalization today?
Nowadays many people understand personalization to be segmentation but the differences are huge. The practice of aggregating prospective guests into groups is known as segmentation. These guest segments have common behaviors or needs, and respond similarly to marketing tactics. Personalization however is the act of tailoring an experience or communication based on information a company has learned about an individual.
Obviously hotels need specific data in order to create individual experiences. Guest might fall into the same segments but there is no doubt that every person has unique needs, desires and preferences. Generally we see what personalization looks like when a guest has been to the hotel a couple of times. When staff knows the habits and certain inquiries become routine. Those guests are also known as regular guests.
Opportunities for improvement
Personalization for repeating guests is great and every hotel should be aware of those guests as they statistically generate more revenue than first-time guests. However when looking at the guest structure in most hotels we see that the amount of returning guests is about 5-10%. On the other side this means that roughly 90% are first-time guests. Improving the service regarding personalization for this group will have a huge impact on revenue and overall guest satisfaction. What hotels need to provide an individualized experience is data. Hotels need to know about the needs and desires, the physical diseases and preferences in order to bring service to the next level. As many regular guests are business travelers and this type of travel will be on hold or in many cases shut down totally for the next months and years at least, hotels do themselves a favor when they look outside the box.
Guests expectations (post-pandemic)
A lot is written about what the world will look like after the pandemic and probably a lot is false because it is just difficult to predict but we can be sure that people are traveling in a certain way even if it is more local and not for business purposes. This does not mean that expectations are going down. It is the opposite. Other areas of live are moving more and more towards individualized services so personalization will be the new normal. The hospitality industry shouldn’t and can’t miss the opportunity to follow that trend. After a long and exhausting travel with annoyances regarding covid measures guests expect to be welcomed exceptionally.
The key for true personalization
For many people big data is the key for creating better and more personalized services but recent studies show that marketers are struggling with personalization more and more. A 65% increase in problems with delivering “personalized experiences to customers” is an indicator that we have not found the ideal solution yet. Looking at Google’s and Apple’s efforts to stop supporting third-party-cookies in Chrome and asking customers if they would agree to share device identifiers with advertisers to track them online the future will be difficult for marketers not just in the travel industry.
The key for true personalization is to actively involve guests into the data acquisition process. New studies say that 76% of customers are comfortable sharing their data for personalization. Enabling travelers to share, update or delete parts of their own data will not just make it finally possible to create 1:1 personalization at scale but also overcome data issues that arose in the course of GDPR’s introduction. Instead of having 10 incomplete guest files at 10 hotels it would be better for everyone involved to have 1 complete, central guest file that the respective hotel can access in order to create a truly personalized experience especially for first-time guests.