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Data Analytics and Hotels

New Era of Guest Data Analytics Ushers In Need for Improved Security

The rise of big data in the hospitality industry is ushering in a new era where striving to achieve a balance between leveraging and protecting data is paramount.

As many hotels use non-anonymized personally identifiable information (PII), data vulnerabilities increase exponentially and many hoteliers have yet to embrace key strategies for protecting this type of data.

A recent Hospitality Upgrade Magazine article pointed out that, “The real threat to information security is what is known as a PICNIC (problem in chair not in computer.)”

Although hotels use firewalls, antivirus systems and other security technologies, severe information security breaches keep happening and the problems are getting worse, not better, because of the PICNIC problem.

Essentially, hotel staff and outside contractors have access to non-anonymized data and without proper training, which can jeopardize both the guest and the hotel. Educating hotel staff about privacy issues is the first step in ensuring a culture of security.

In addition, guests are rightly concerned about data security.  According to the article, Forrester Research found that one in three consumers were concerned about companies having access to their behavioral data. More than 40 percent said they had stopped short of completing a transaction on a website because of something they read in a privacy policy.

To address the issue, the Hospitality Upgrade magazine will be doing a series that will cover the crime of identity theft and how it impacts both victims and the hospitality industry. We urge all hoteliers to follow the series in order to stay on top of the latest techniques and legislation to keep their guests’ data private and safe.  Not only will guests appreciate it, but hoteliers can also avoid many PR and social media headaches that come with a data breach.



Using Data Analytics to Win and Keep Hospitality Guests

We are living in an era where ‘big data’ is driving key decisions and programs for multiple business sectors and even the federal government.  Thanks to new innovations for managing large volumes of data, as well as advances in algorithms and analytics, we are able to gain a complete snapshot of customers and end users.

The hospitality sector is also leading this new analytical approach for differentiating their guest offerings by mining into a deep well of data. Gary Loveman, President, Chairman and CEO of Caesars Entertainment, recently gave the keynote address at HITEC 2012 and discussed how smart customer data analytics drives the success of Caesars’ Total Rewards guest loyalty program.

Loveman said that competing on price alone for online booking engines is a losing bet for hotels. To help Caesars differentiate itself from other hospitality companies, he launched the Total Rewards program in 1998 using data collected on guest behavior to determine the potential value that a guest could be worth to the company. Although it’s important to give great service to all guests, it’s even more important to determine the potential value each guest could be worth to the company.

For example, it might not make sense to spend more on incentives for a customer who visits a casino only once, versus one who comes back again and again. The data analysis methods used in Total Rewards, though, pick up on more subtle cues to determine which customer would make the better investment.

Once Caesars decides to lure a guest, the Total Rewards program is designed to make that task easier by offering rewards that are actually useful to that particular customer.

In addition, offering benefits right away makes Total Rewards more attractive to customers because they will actually see a benefit from signing up. Total Rewards also uses its collected data to tailor offers to individual high-value customers, increasing the chance that they will sign up.

Gary Loveman clearly understands that data analytics can give a full picture on hotel guests. Thanks to his vision, the Total Rewards program has already yielded benefits to Caesars. In fact, over the 2000-2011 period, revenue per available room increased 20 percent, and the company outperformed the competition with +25 percent regional market wins per unit and +28 percent local market wins per unit.