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IBM Big Data And Analytics Translates Into Big Hotel Room Bookings For Denihan Hospitality Group

Stocks in this article: IBM

"Nearly every organization is looking at how to manage Big Data to stay competitive," said Erick Brethenoux, Director Business Analytics, IBM.  "What Denihan has done is not only look at massive amounts of data and different data sets, but acted on those insights quickly to provide a personalized experience for their clients that makes them want to return.  Denihan has been able to connect their data in a way that helps them create a unique guest experience, be smarter in how they do business, while more effectively using their resources to target growth areas to enter new markets."

How Big Data Enables Big Bookings

In an effort to further their success in the business and leisure travel sectors, Denihan was looking for a way to harness big data at a magnitude that would transform the company's strategic direction.  They wanted a solution that would not only sustain business during periods of vulnerability, such as non-peak seasons, but boost revenue during positive economic times, as well. 

However, to increase revenue, reduce costs and improve customer experiences, they first needed to build an analytics culture within the ranks of their employees. The objective: place user-friendly analytics tools into the hands of its guest facing employees, including hotel management and corporate support teams. This has enabled Denihan to:

  • Increase Revenues – Denihan's revenue management team is now able to anticipate the most beneficial type of business to book at a given time and understand precisely how far in advance it would do so.  They can also estimate what the room rate trend will be, through what channel it will be booked, and for what length of stay. This kind of information allowed one of Denihan's New York City properties to outperform at double the room rate during a recent United Nations Assembly Week, one of the most profitable times of the year for New York City hotels.  Such ready reporting is available daily, providing a 40% productivity boost for their teams whose counterparts in many hotels can spend up to half a day finding and collating data. 
  • Better Manage Expenses – Having detailed insight into all expense categories and occupied room metrics, Denihan realized a significant cost savings allowing more resources to be put towards innovative renovations and product offerings that enhance the guest experience.  The company is also able to analyze data such as payroll trends and employee overtime in the context of forecasted vs. actual occupancy.
  • Guide Strategic Direction – The key to guest retention and advocacy is understanding and delivering on customer preferences.  Guests surveys that obtain feedback on why guests choose their hotels, why they return, and how they make their booking decisions not only gives strategic insight into guest behavior, but provide valuable attitudinal knowledge for longer term planning.  And, by quickly tapping into daily individual stay guest comments, management is able to easily identify what guests like about a stay and where they might wish to see improvement.  For example, outside noise was the number one challenge across the company's 11 New York City hotels.  In response, Denihan management launched a "Put NYC on Mute" campaign, providing earplugs in nightstand drawers in all guestrooms, an action that has greatly improved guest feedback.

Analytics provides a win-win for both Denihan and its guests.  Through a win-back program that encourages valuable guests to return, the company has produced over 30 times the revenue it invested, while greatly increasing the loyalty of those customers.  Additionally, Denihan can now target the right offer to the right customer based on past customer data and feedback, and the predicted value they can bring in the future.  For example, a guest who has spent $40,000 in the past would receive a different offer than one who had spent $1,000.  While Denihan wants both to return, the offer becomes both customized and measureable.

Denihan has an aggressive growth strategy with plans to double the size of its hotel portfolio in the next three to four years.  With plans to take their analytics capabilities  to a new level with predictive analytics, the company remains confident that enhanced analytics will allow it to increase profitability even further, supporting Denihan's position as a sought after hotel development partner.

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