Customers want to feel special. They expect a personalized experience, and 76% become frustrated when they don’t get it. To grant this wish, businesses across customer-facing industries are transforming their service and marketing strategies.
Failure to offer personalization may have financial consequences. According to Boston Consulting Group, companies that practice personalization see 3% to 6% higher compound annual revenue growth than those that don’t.
Demand for personalization in the tourism and hospitality industry is probably among the highest. Lots of consumers are looking for leisure and vacation experiences, and they want to be pampered and catered to, leading hospitality businesses to design new personalization techniques. And with 61% of customers willing to pay more for personalized experiences, this approach seems justified.
The changing landscape of hospitality
While the hospitality industry is one of the oldest, dating back to ancient Rome, it eagerly absorbs new trends to meet evolving customer needs. Today, people are no longer just looking for a bed and, maybe, breakfast. They want unique, authentic, and extremely personalized experiences, expecting hotels to treat them as individuals and offer tailored services.
While designing innovative personalization techniques, hotels and resorts need to consider the main factors affecting the hospitality industry today.
Rising demand for online booking
Do you remember the last time you had to call or email a hotel to reserve a room? Today, you can complete your entire booking journey through a website or mobile app, from choosing the room through paying. In 2023, 850 million people used a travel app.
While online bookings are convenient for travelers, they present certain challenges for hotels. As their direct contact with guests is minimized, hotels need to make an extra effort to personalize experiences using website functions and communication channels. Another challenge is presented by booking platforms, which can limit personalization potential.
Popularity of social media
People tend to believe reviews by other customers more than claims by companies or service providers. In choosing a place to stay, travelers are more likely to rely on reviews on social media and other platforms rather than on hotel websites. Statista observed that in 2022, for European customers, online reviews were more important than a hotel’s star rating.
For guests, online hotel reviews have a stronger influence than star classification
This trend requires hotel management to be more active and engaging on social media, posting informative content and holding authentic conversations with users to address their personal concerns. After all, great social media content is the first business card presented to any hotel guest.
Sustainability and environmental awareness
Environmental protection is a hot issue, with companies across industries striving to minimize their environmental impact. Hospitality is no exception, with customers expecting hotels to pursue eco-friendly policies. Moreover, the European Climate Law and other measures aimed at monitoring emissions and reducing our CO2 footprint promise to set standards for all industries across the globe.
Hotels and resorts can make each person’s stay comfortable and eco-friendly at the same time by taking steps such as lettings guests decide how often to change their towels and creating smart rooms that control lights, heating, and AC based on occupancy and guests’ preferences.
Technology integration
Advanced technology is steadily expanding its influence on our lives, making multiple processes simpler, faster, and more convenient. For the hospitality industry, technology opens lots of opportunities to create outstanding experiences and tailor services to guests’ preferences.
Contactless check-in and keyless locks are already the norm, while smart and voice-operated room controls are not yet widespread but are gaining traction. Assisted by high-tech solutions, hotels provide personalized recommendations, set custom routines for each guest, and adjust maintenance flows to accommodate travelers. Behind the scenes, artificial intelligence and big data are helping hotel management to analyze guest behavior and better anticipate requests.
Key elements of personalization in the hospitality industry
Know what your customers want most and what your company does best. Focus on where those two meet.
Data collection and analysis
Today, personalization is mostly about collecting and processing data. Luckily, modern technology helps greatly in this area.
In the hospitality industry, businesses can benefit both from personal guest data collected during reservations and other interactions with the hotel and anonymous data harvested from room preferences, amenity settings, website and mobile app visits, and social media mentions.
Today, there are many ways to collect hotel guests’ data, from website analytics to smart devices installed across hotel premises. Every visitor’s step both online and offline can yield valuable information that can later be translated into unique insights, helping hotels to better target customers.
Personalized booking experiences
Personalization begins long before guests set foot inside the hotel. You can start at the booking stage by configuring your website to provide tailored experiences with a focus on micro-segmentation, which requires the necessary IT components helping hotels to identify precise segments in the customer base. Afterwards, personalization continues throughout a guest’s entire stay – and even further. Using artificial intelligence integrated in a property management system, a hotel can offer targeted recommendations based either on data of past stays or a guest’s preferences selected while booking the room.
For example, the booking process may include prompts to provide room preferences, the purpose of the visit, dietary specifics, and specify group members (adults, young people, or children). Based on this information, the hotel can offer custom services during their guests’ stay.
Customized in-stay experiences
Using information about guest preferences, hotels can provide curated services during the stay to take personalization even further.
To enable tailored services, hospitality businesses need to maintain a comprehensive guest database with all information that might be relevant. This can be achieved with effective integration of all hotel systems – booking, property management, maintenance, smart room, mobile application – into a coherent CRM that forms complete guest profiles.
7 ways to introduce personalization in the hospitality industry
You can use several techniques to enhance personalization in a hospitality business. Let’s look at the most popular.
Guest profiles
Modern technology allows for collecting various types of information about guests and their preferences, allowing hotels to form complete guest profiles that help them to provide curated services.
For example, a room reservation already tells the hotel whether guests are using their venue for business or leisure, whether they prefer to dine on-premises or elsewhere, and whether they have children with them. Another batch of useful information comes from room settings – temperature, bed types, routines, etc.
Curated services
Based on guest profiles, hotels can tailor the services they provide, including:
- Custom menus
- Entertainment and other activities
- Tours and transportation
- Wellness and fitness programs
Loyalty programs
With loyalty programs, you give your guests the option to choose their personal benefits. They can use collected points towards exclusive perks, such as late check-ins or check-outs, room upgrades, or extra booking flexibility. In addition to boosting personalization, loyalty programs increase guest engagement and motivate guests to choose your hotel for their next trip.
While loyalty programs used to be a feature of large chains, today, smaller hospitality businesses are also adopting loyalty solutions to increase customer engagement. With dedicated SaaS loyalty platforms such as Capillary, it’s much easier to launch a program designed to turn visitors into loyal customers.
Local networking
A hotel may offer various services to improve guest satisfaction; however, no hotel can cater to all the needs guests might have. It is always a good idea to form partnerships with other local businesses to offer an almost 360-degree service – taxi companies, restaurants, entertainment facilities, spas, etc.
Establishing relations with neighboring businesses can give everyone a chance to expand their customer base by offering a wider range of services.
Tailored recommendations
By comparing guests’ interests and preferences with a schedule of local events, you can draw attention to activities that guests may find appealing. If there is a show or an exhibition during their stay, suggest it to your guests.
This way, you can help visitors put together their schedule while saving them time with a list of curated recommendations that match their profiles.
Special events and moments
Pay attention to your guests’ important dates and special occasions. For example, you are sure to get birth dates on the booking form. Why not use that information to send a birthday greeting?
If guests use your property to celebrate a special event – a wedding or an anniversary – make sure to go the extra mile and offer a gift – a cake, a free night, or a daily spa package. Such things are always noted and form good memories, which, in turn, increase loyalty.
Customer feedback
Making your guests’ voices heard is also an element of hotel personalization. Ask guests what they liked and what they didn’t and, most importantly, ask them to suggest improvements.
When you act on their feedback, guests feel even more valued and recognized. Make sure to acknowledge their opinions and inform them about actions you have taken following their suggestions.
How technology helps to personalize hotel experiences
Marketers in customer-facing industries have been using technology to personalize customer experiences for a long time. According to Statista, the global personalization software market is forecast to exceed 5 billion US dollars by 2030.
Global personalization software market size, in billion US dollars
The hospitality industry makes use of not only software but also other technologies to make the most of customer data and create hyper-personalized hotel experiences. Let’s look at hotel personalization examples showcasing the use of cutting-edge technologies in the hospitality industry.
Artificial intelligence and machine learning
Hotels eagerly adopt AI-driven tools to leverage their power to improve customer experiences and boost personalization. AI assists marketers in analyzing customer data to create comprehensive profiles, identify patterns, and highlight key details.
In addition, hotels implement AI-powered chatbots, which are getting increasingly popular. Such chatbots serve as personal assistants to guests, providing information and recommendations tailored to their preferences.
As one of the prominent hospitality personalization examples, let’s look at the Cosmopolitan of Las Vegas, which offers guests the services of Rose, a 24/7 digital concierge that can help them with various matters from making restaurant reservations to planning city trips. Guests can text Rose for assistance, and she is always there to help.
Data analytics
Data can be an excellent driver of personalization techniques. For hotels, multiple sources of guest data can be used to perfect their tailored services: booking systems, interactions with the hotel website and mobile application, social networks, online reviews and mentions.
However, making the most of gathered data takes sophisticated technology to process that data and translate it into personalization-driving insights. For that purpose, hotels use complex analytical software to consume data from both internal and external sources and turn it into guest profiles and effective interaction techniques.
A good example of leveraging data to enhance personalization is Mariott Bonvoy, the loyalty program of Marriott International. The global chain of hotels and resorts has been leveraging the potential of data for decades, and now Marriott has partnered with IBM to power its cloud-based customer-centric platform focused on providing outstandingly personalized guest service. The loyalty program yields a wealth of information about guests’ preferences and expectations, allowing the hospitality chain to fine-tune its tailored services.
Internet of Things
The development of edge computing and connected technologies gave the hospitality industry a unique chance to provide super-personalized services, letting their guests control room settings as they wish. With smart lights, thermostats, and sensors, hotel guests can customize amenities according to their preferences. A smart room will then remember the settings to maintain a comfortable environment.
For an example of IoT technologies used for hotel room personalization, check out the new initiative by Accor Hotels. The chain is developing a smart room concept combining connected and wearable technologies to form all-around tailored experiences. From lights and heating to a custom selection of aromas, everything can be set up to turn a hotel room into a one-of-a-kind place to enjoy while away from home.
Challenges and considerations
While personalization of guest experiences can be a great growth driver for hotels, it comes with some challenges that businesses need to consider.
Over-personalization
Consumers don’t always want the personalization that you’re delivering.
At the initial stages of customer interaction, be careful not to overstep the personalization boundaries and scare off customers by knowing too much about them. Even if you have collected some data that helps you provide customized services, do so in a discreet way.
At a later stage, when the customer has completed the purchase, you can move to more personalized communication, pulling in the data you gather during the purchase process.
Privacy concerns
Since personalization in hotels involves collecting and processing customer data, some customers might be wary about it. To avoid negative experiences, make sure you adhere to all applicable data protection requirements and implement the necessary security mechanisms to protect your customers’ data.
Technology challenges
Some personalization techniques require implementation of cutting-edge technology, which may present multiple difficulties for hotels, especially those using traditional management systems:
- Integration with legacy systems
- Lack of qualified IT personnel
- Insufficient skills of hotel staff
To achieve success with leveraging technology to personalize guest experiences, hotels may benefit from reaching out to professional IT companies that can help them plan and implement their digital transformation. At the same time, IT experts can train hotel staff to work with technology solutions to automate their tasks and boost personalization.
Variety of data sources
In the hospitality industry, data comes from both inside and outside: hotels’ own booking and property management systems, direct interactions with customers, social networks, mass media, etc. In distributed hotel and resort chains, the variety of data sources is even wider, as each location might have its own systems.
To process this flood of data and transform it into actionable insights, it may be a good idea to invest in a comprehensive data processing platform for aggregating and managing data in various formats. As a result, the hotel will get a much clearer vision of their guests and be able to plan personalization activities much better.
Hospitality solutions by Intellias
Intellias places a significant emphasis on personalization as one of the leading marketing strategies to boost competitiveness in today’s customer-centric world. In developing technology solutions for our clients, we always make an effort to enable great customer experiences and help the client on their way to business growth.
We use the same approach in delivering travel technology solutions for our clients, making advanced solutions work towards shaping highly personalized services.
Travel booking engine
For a European travel tech company, we delivered a cloud-based travel search, comparison, and booking solution, allowing customers to build itineraries according to their personal preferences. The platform enabled integration with both local and international service providers, expanding the company’s presence and broadening its offering to customers.
With multi-country coverage of more than 100,000 destinations, the new solution increases the business’s appeal, giving customers multiple opportunities to find the perfect vacation for their goals and budget.
Integrated transportation booking platform
We worked with a European technology services provider to create a transportation booking portal providing customers with a choice of various transport types and allowing them to find the most convenient, comfortable, and budget-friendly option for their trip.
The solution we created is supported by a robust cloud-based infrastructure, giving it the necessary scalability and dynamic resource provisioning. As a result, the client can accommodate future growth and expansion into new markets.
Advanced data analytics capabilities enable intuitive search and booking flows for customers, helping them schedule and book multi-modal journeys across multiple countries.
Creating experiences that become good memories: personalization matters
The time has come for businesses to listen: customers expect a personalized approach created specifically for them. When it comes to hotel stays, each guest has specific requests – from dietary preferences and family amenities to room settings and curated activities. When a hotel becomes a true home away from home, people want to come back.
Today’s technology such as Internet of Things, AI/ML, and data analytics, gives the hospitality industry plenty of opportunities to cater to the needs and requests of their guests. With the right personalization, technology can strengthen a hotel’s reputation with returning guests and bring new guests looking for experiences that matter to them.
Contact us for personalization-driving technology solutions.
