What is The Value of Data in The Hotel Industry?

Water By The Bed.

By Frank Vertolli, Co-founder & Managing Partner, Net Conversion

First-party data has always been important to businesses both in and beyond the travel industry but has become increasingly essential in recent years.  Collection methods such as direct bookings, website visits, and social engagements in the hotel industry allow brands the opportunity to build stronger relationships with their guests, collect valuable data, and manage better distribution. The focus on first-party data will become increasingly important and valuable as we move into a future of increasing privacy and ethical concerns and face practices such as user identification in a “cookieless” world.  

As a result of these measures, hotel leadership will need to better assess the total value of practices like consumer opt-in and direct booking as well as the consumer data that comes with it. Through this analysis, they’ll make judgment calls that will eventually become the direction and pivots of the marketing and sales strategies. 

First and Third-Party Data 

Before we get into the details of data collection and how to utilize it to your advantage, we must first discuss the difference between first and third-party data collection. In the hotel industry, first-party data is information collected from guests by direct methods. This can include the brand’s property management system or point of sale system, check-ins, reviews, website and app logins, surveys, and any customer relationship management technology used. 

Third-party data, similarly, can include some of the systems mentioned above, but instead of directly from the guest to the hotel, an active middleman collects their own consumer data with each transaction. Companies including online travel agents such as Booking or Expedia and others such as Tripadvisor or meta-search providers have been a staple of third-party agencies that collect hotel guest and traveler information, utilizing that data to perform its own sales and marketing operations. At the same time, the brands they book are left with a more limited amount of data. 

Direct and Indirect Data

The relationship between first and third, direct and indirect data, has established itself as an industry norm. While hotels utilize travel agencies and other booking services to fuel their business, travel companies are driven by the products, services, and amenities that hotels, airlines, and others offer their guests. 

And although this partnership has sustained itself for quite some time, the looming need for direct booking and data collection has always been present. But as user profiling begins to shift into anonymity to protect user’s private information, hoteliers and other travel industry leaders will have to refocus their efforts and look to maximize direct sales and available data for their brands. How they go about that collection will be the deciding factor in their success. 

What Data Are You Collecting?

As mentioned earlier, there are a variety of ways to collect direct data from hotel guests. Each plays a crucial role in the collection process as the customer flows throughout their journey or, better yet, their vacation. And like their customer journey, the way you follow up with guests before, during, and after their vacation should flow as effortlessly and be as seamless of an experience as possible. 

From the moment a customer decides to input their email address to receive more information about special offers, to booking a room, check-in, and their stay and eventual exit, they are giving your business valuable data. This data will be used to spot trends and create insights that lead to pivots and innovation. The hotel’s property management system, website/app data, online reviews, exit surveys, and CRMs should be used to formulate the best possible insights.  The information you collect will serve as a query of data that will guide you and your guests’ relationship into the future as you utilize it to better understand their needs and desires. 

Building For The Future

Going forward, with a fresh perspective on the value of first-party data and direct booking, hoteliers and their sales and marketing teams should aim to take a more proactive approach to data collection and use it to target existing and future customers. The collective efforts by your team will pay off down the line as third-party data becomes more ambiguous, and the relationships they’ve built can be used to bring people through the door on a returning basis. It’s then, with a group of brand advocates and repeat business, that all your hard work will come together and paint a beautiful picture of the future. 

*2020 Hotel Marketing Benchmark Report by Revinate 


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