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How Hotels Can Overcome Their IT Limitations and Claim Victory Over OTAs

Unleashing the Power of Big Data for Hotel Success

The Power of Big Data in the Online Travel Industry: A Comparative Insight

The Financial Dominance of Online Travel Agents Over Traditional Hotel Chains

In the contemporary digital landscape, the adage "Big Data equals Big Money" holds particularly true. This reality is starkly reflected in the valuation of Online Travel Agents (OTAs), which significantly surpasses that of even the largest hotel chains, despite the OTAs not owning a single property. For instance, as of May 16, 2023, Booking Holdings Inc., the parent company behind, boasted a market value of $97.73 billion. In stark contrast, Marriott International, the globe's most expansive hotel chain with 7,887 properties under its belt, was valued at approximately $53.48 billion. This discrepancy underscores the immense financial potential embedded within the proper harnessing of big data by OTAs.

Why Hotels Lag Behind OTAs: The Big Data Dilemma

One might wonder why OTAs consistently outperform traditional hotels in attracting guest bookings. The answer predominantly lies in the hotels' inefficiency in accessing and utilizing Big Data to their advantage. This shortcoming largely stems from outdated IT infrastructures within the hotel industry that hinder effective data collection and utilization.

The Challenge of Data Integration in Hotel Technology

Dr. Michael Toedt, CEO of dailypoint, sheds light on a critical issue plaguing hotel technology stacks: "The lack of connectivity and centralization. The traditional setup involves various systems collecting and storing guest data in isolation. This fragmentation, exacerbated by the mix of on-premise and cloud-based systems, leads to the creation of disparate guest profiles trapped within siloed databases. As a result, hotels face significant hurdles in centralizing, cleaning, and leveraging this data to extract actionable insights for enhanced marketing strategies and customer service improvements."

Unleashing the Potential of Big Data in Hospitality: A Strategic Roadmap

The Underutilized Advantage of Hotels in Data Collection

Surprisingly, hotels possess a unique advantage over Online Travel Agents (OTAs) in the realm of data collection. Given their direct and comprehensive interaction with guests, hotels are in a prime position to gather extensive details about their preferences, habits, and dislikes. From nuances like room service usage patterns and minibar preferences to spa schedules and favorite menu items, hotels have access to a wealth of information that OTAs might never obtain. Even online reviews serve as a goldmine of insights, presenting a significant opportunity for hotels to harness this data to craft a detailed guest profile over time.

The Golden Record: The Key to Personalization

Despite this potential, the lack of a unified and accurate guest profile – often referred to as the Golden Record – remains a critical bottleneck. This unified profile is essential for transforming scattered data points into a comprehensive understanding of each guest. Ironically, nearly half of the guests are willing to share personal information in exchange for a tailored experience, as highlighted by a 2021 study by IHG Hotels & Resorts voco hotels. This openness from guests presents a fertile ground for hotels to elevate the personalization of services, yet the opportunity is often missed due to outdated IT infrastructures.

Embracing Modern IT Solutions for a Competitive Edge

Dr. Michael Toedt emphasizes the necessity for hotels to modernize their IT frameworks to effectively compete with OTAs. By integrating advanced technologies such as artificial intelligence (AI), machine learning, and automation, hotels can offer the personalized experiences that guests increasingly demand. This technological upgrade, centered around Central Data Management (CDM) and supported by Data Quality Management (DQM), is pivotal in creating, cleansing, and maintaining the Golden Record.

The Shift Towards Central Data Management

Toedt advises a strategic shift in the hotel technology stack away from traditional focal points like Property Management Systems (PMS), Customer Relationship Management (CRM), Central Reservation Systems (CRS), or Internet Booking Engines (IBE). The adoption of a modern CDM system, exemplified by the award-winning dailypoint 360°, coupled with a robust DQM solution like the dailypoint Data Laundry, is essential. Such systems enable the creation and maintenance of the Golden Record, facilitating the generation of personalized insights at every customer touchpoint.

The Path to Data-Driven Personalization

Dr Michael Toedt concludes:

"Embrace the transformative power of Big Data and AI in the hospitality industry. By centralizing data management and personalizing guest experiences, hotels can surpass OTAs and cultivate lasting loyalty. Start your journey towards operational excellence and strategic growth today. Harnessing detailed guest insights and streamlined CRM practices isn't just a goal—it's a necessity for the future. Contact us to explore how you can elevate your hotel's position in the competitive landscape and ensure a legacy of success."

Dr. Michael Toedt
CEO & Founder

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