In the last few years, one word has been coming up again and again in Hospitality articles, panels, and white papers: Personalization. Every day and everywhere across the internet, marketers put forward new ways to take advantage of personal data, striving continually to perfectly cater to their customer’s needs. Many hoteliers, especially from the higher end establishments, have also included personalization as a key component in their global strategy. This translated into concrete actions taken nearly everywhere across the customer journey which, in turn, came to fruition revenue-wise. However, there is still one part of this path toward global personalization that is left relatively unexplored in the hotel industry: the booking experience.
In this article, we will go through the reasons why personalization has become such an important part of hotels’ strategy. Starting with raw numbers, we will analyze further just what makes personalization so valuable. Then, we will detail how hoteliers around the world put into practice this concept to the guest experience. Finally, we will focus more particularly on the booking experience and how hotels can go about adding a personalization layer to it.
As promised, let’s start things off with the facts. In our case, statistics are the best indicators of the revolution brought about by personalization in the hospitality industry.
- 86% of consumers report personalization plays a role in their purchase decisions.
- 48% say they buy more when marketers leverage their buying behavior.
- Personalization can deliver 5 to 8 times the return of investment.
These numbers are nothing short of spectacular. At this point, you may wonder why personalization is putting up such great results. Part of the answer is to be found in the travel habits of the latest generations of travelers.
Catching up with the new generations
Indeed, with the advent of social media and full-on digitalization, Millennials and Gen Z’s have become obsessed with what marketers call the instagrammibility (or the ability of a picture to capture the maximum amount of attention on social media) of their travel adventures. And one of the key factors of this trend is uniqueness, which is deeply linked with personalization. These young travelers want their friends to see that they are living something truly special and unique in order to stand out from the crowd.
As a hotelier, you want to make sure that your travelers can showcase such a tailor-made experience when staying at your hotel. If you manage to convey that your hotel can deliver such a unique, one of a kind stay, you’ll be giving yourself the best chance to attract and retain this new generation.
As a way to adapt to those aforementioned changing travel habits, hotels throughout the world started their journey towards personalization. However, most of the actions taken in this direction are still limited to the on-site experience. Customizable amenities, tailor-made service, and personalized offers are just some of the new trends and tactics hotels are coming up with. More concrete examples would be the use of Streaming Video providers (Netflix/Hulu, …) or speakers connected to Music App (Spotify/Apple Music, …) which both have built-in personalization and easily improve comfort at a reduced cost. All these came a long way in reinforcing trust and building a stronger customer relationship which can eventually translate into heightened guest loyalty.
External service providers are a cheap way to add personalization
However, even though pampering existing customers is important, it is not the best solution to attract new guests. What if you could take advantage of personalization before travelers even set foot in your hotel? Let’s take a step back down the customer journey, and focus on how to implement personalization in the digital booking experience.
Transposing personalization online
At first sight, it might look difficult to introduce personalization in the digital world, as human interaction is such an intrinsic part of it. This is why it is important to highlight that the key to a successful implementation is to find the right balance between cold, mindless technology and the human touch (or imitation thereof). In the end, keep in mind that the goal is to offer a seamless booking experience which will, in turn, generate great results.
The first, most basic step to add personalization online is to offer a relevant array of languages on your hotel website. Although this sounds obvious, having a multi-lingual website can bring about tremendous results in terms of SEO and conversion and should definitely not be overlooked.
The use of a chat box is also a common practice for hoteliers working on website personalization. Through a simple window pop-up, you can answer every question guests might have about your hotel. Another good use of the chatbox is to engage your users in a meaningful way by asking the right question. Guiding the conversation towards your guests’ preferences can help you better understand their needs in order to direct them to the appropriate information. This also leads to a higher commitment from guests and is likely to have a tremendous effect on your website conversion rate.
Another efficient way to capture users on your website using personalization is by leveraging special/limited offers. In order to achieve good results with this tactic, you need to be really precise about the timing of the offer. Dropping specials promotions right as your guests enter the website is not optimal as they will feel like you give which does not feel unique. Instead, try displaying such offers when your users are about to leave the website (through exit pop-ups) or via personalized emails if you happen to have their address. Also, remember that these promotions perform on your users’ FOMO (fear of missing out), so make sure to add a sense of emergency to the message for greater results.
But even though all these tactics are important and can add a nice layer of personalization to your website, they are already widely used in the hotel industry, which means that they are not much of a differentiation factor anymore. At this point, the next step to get ahead of the competition is to be found in the world of advanced digital technology.
To infinity and beyond
Machine Learning and Artificial Intelligence are big buzz words in today’s world and have almost endless applications in all kind of industries. In the hotel market, Machine Learning and AI are best used as a way to better understand guests on an individual level and address their needs accordingly. As an example, this can go for what type of rooms they are more likely to want, what type of prices they are ready to pay and/or what kind of amenities are right for them. However, the best argument for adopting AI technology is time efficiency: where it would take humans hours to personally check with guests figure out their preferences, the right AI feature can do it just as well and effortlessly. With the reasoning behind it now out of the way, let’s dive into what kind of AI-Based technology would be the right fit for your hotel.
Perhaps one of the most obvious pieces of technology integrating Artificial Intelligence is the Chat Bot. A more efficient successor to the Chat Box, the Chat Bot is a software that conducts conversations, online or on-site, automatically based on guests’ questions and/or behavior. By powering it with Machine Learning, the Chat Bot will, granted a bit of time and iteration, learn to adapt and to respond better to guests’ queries. Eventually, implementing a chat bot is an easy way to drive more conversion on your website without the hassle of having an employee answering each individual chat request.
A Chat Bot can save your team a lot of time while increasing website conversion
Regarding more specifically the booking experience, what better way to better understand the budget of your guests than to ask them? Negotiation-Based pricing is nothing new in the hotel industry; to this day people still call hotels hoping to get a better deal by booking in direct. However, this practice has historically been very time-consuming and inefficient (what is the optimal percentage discount?). Just as we saw with the dichotomy Chat Box/ Chat Bot, Artificial Intelligence can lift these similar drawbacks by smartly automating the whole process. Indeed, by using a smart negotiation solution on your hotel website, you invite guests to offer their price for a stay. In response to the offer, the system, powered by artificial intelligence, can either accept the price or enter a negotiation process in order to determine the optimal rate for both the guest and the hotel. This kind of booking experience takes personalization to a whole other level by customizing automatically the pricing of each individual guest.
As we saw, personalization has become a key strategic factor for many hotels. Aligning perfectly with the travel habits of the new generations, personalization helped hotels capture these young travelers by putting the human back at the center of their strategy. Even though a lot has been done in recent years to better customize individual stays, the digital experience is still relatively unexplored. By diving into the current products, we saw a wide range of features available on the market, from simple website enhancement to cutting-edge technology. In the end, we established that the most important differentiation factor in the current hotel environment was AI-based features (such as the ChatBot) aiming to customize online guest experience.
In the coming years, we predict that personalization will still be an integral part of hotels’ strategy. However, it will have to evolve to include recent breakout technologies such as Artificial Intelligence. This is exactly why it is important, as a hotelier, to get ahead of the curve by adopting AI technology as soon as possible. By doing so, you will easily differentiate your hotel and stand out from the concurrence today but, more importantly, even, this will serve as a bridge to get ready for when AI inexorably evolve and expand to the whole hotel ecosystem.