Data and AI for Luxury Hospitality Leadership

Advant was asked to host a workshop at the PURE 2024 conference in Morocco to help unpack that thoroughly modern problem.

Alex Liu, the head of Advant's data science and AI division, shared with top hoteliers in attendance an expert's take on data and AI, delivering three critical lessons gleaned from his background quant trading in financial markets, and recast for hospitality with the help of Sangjay Choegyal.

The power of data and AI in hospitality

Why does data matter?

Data analysis provides several key benefits:

• Data justifies actions: data builds trust and validates decisions.
• Data helps you gain a competitive edge: through understanding customer behaviours, anticipating demand, and tracking market trends.
• Data allows you to measure and refine: by continuously improving operations through benchmarking and optimisation.

The current state of data

Most hotels are at the reporting stage of data. Reporting collects and organises data. It tells you what happened. But analytics digs deeper, to tell you why something happened and what you can do to improve. Expertise can take those mountains of data you already have and extract real insights that lead to action: insights that shape your strategy and refine your decisions.

Data overwhelms

We have an endless onslaught of data. A 50-room hotel receives 930 customers a month: that's at least 5,580 data points, from name, gender, age, nationality and history to room choice and spending patterns. Without analysis that information is swiftly overwhelming, and increasingly ignored.

Enter AI

With the amount of data we have access to now, only AI is equipped to tackle it. AI can help:

• Manage and organise data: handle large datasets efficiently.
• Identify patterns and connections: uncover hidden insights that humans might miss.
• Provide predictive analysis: forecast future trends and outcomes.

The AI catch

AI is a predictive engine, not a reasoning engine. We've all seen AI get things wrong, producing nonsense at times. AI needs regular attention from humans with reason, feeding it good, clean data, to be able to shape strategy.

Advant's three-step framework to mastering the market

The hotels that harness the power will find patterns and insights that would take humans a lifetime to find. Advant tackles it in three steps:

• Step 1. Devising a data-backed strategy: utilising AI to analyse data and identify opportunities.
• Step 2. Planning and executing the strategy: implementing the insights and recommendations.
• Step 3. Monitoring and refinements: continuously evaluating performance and making adjustments.

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Step 1: Devise a data-backed strategy

A top-down, bottom-up approach

Data strategy is a two-pronged approach: top-down and bottom-up. Top-down focuses on the big picture, identifying market trends and patterns. It's efficient for strategic insights. Bottom-up dives deep into raw data, like customer reviews and flight schedules. It's more complex, but it can uncover hidden opportunities.

Hospitality professionals are very familiar with top-down data: travel stats and industry reports.

The bottom-up advantage

Bottom-up analysis is about the details. With AI, you can access and analyse vast amounts of data from sources like OTAs, hotel websites, and customer reviews. While each piece might seem small, together they tell a powerful story. AI can analyse this data using proprietary software, revealing insights that are often missed in a top-down approach. This is where you find hidden gems: the nuances that can make a significant difference.

Using AI in data visualisation

Humans are visual creatures. Charts and graphs help us recognise patterns in data. This is why visualisation is crucial in data analysis: it turns raw data into something understandable and actionable. AI can create visualisations in seconds, saving time and effort, and allowing for dynamic and engaging storytelling, like animating the evolution of tourism trends.

• Line charts: track trends over time, like the impact of COVID on tourism.
• Heat maps: highlight high and low scores in a matrix, such as hotel ratings.
• Bubble charts: overlay multiple dimensions of data for a comprehensive view, like market analysis.

One AI animation tells the story of how Bali tourism evolved over four years. First you see that during Covid only Indonesians were travelling, averaging two to three nights at around $200 per night. As we come out of Covid, Australians quickly break out of the pack in both size and spending, at four nights average and $400+ per night. Then, as the war in Ukraine broke out, Russians suddenly start to stay longer, five to six nights at $400 a night, followed by Ukrainians. By 2024, nationalities start to normalise, with Australians the top spenders in the region.

Understanding new markets

To understand a potential new market, again go both top-down and bottom-up.

• Top-down: destination arrival data shows us broader visitor trends.
• Bottom-up: competitor review nationality data reveals exactly where our competitors' customers are coming from.

From the top, we see that Australia is the largest single source market. From the bottom up, one competitor has a disproportionately large German audience, an area worth exploring further. This can help direct a marketing budget.

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Step 2: Planning and executing the strategy

Execution is key

A well-planned strategy is essential for successful execution. Clear timelines, effective tools, and transparent communication ensure that everyone is aligned and accountable.

An integrated approach

Effective data strategy involves integrating insights from various sources and channels. This ensures that all marketing and operational efforts work together towards a common goal.

By combining top-down and bottom-up approaches, leveraging AI for data analysis and visualisation, and executing strategies effectively, you can gain a deeper understanding of your market, identify growth opportunities, and make data-driven decisions that drive business success.

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Step 3: Monitoring and refinement

You have asked the right questions, collected bottom-up data, and used those insights to build a strategy. But that's just one part of the process, a one-time effort of research and planning.

The real magic happens when we make this process dynamic. Tracking, monitoring, and refinement allow us to continuously oversee every detail of our efforts, analyse performance data in real time, and adapt as the market and customer behaviours evolve. It's a living, breathing process, evolving as you receive your daily influx of data.

The systems underneath

At the core of any hotel operation is the PMS and CRM. These systems need to be compatible and self-updating. With a well-set-up PMS and CRM, all your proprietary data stays complete and yours for years to come. That's crucial for ensuring long-term success.

To track customer behaviour data you need to set up the right tools on your website and booking engines, such as Meta Pixels, Google Analytics, and backend trackers.

Publicly available data on your market and competitors is a massive amount of data, too much for any human to track effectively. There are plenty of providers out there that monitor rates, but that's only one piece of the puzzle. In silos, these data sets can be misleading.

Vantage Point

Advant has developed a system called Vantage Point that tracks a wide range of data sets, including competitor rates, their clients, average value and length of stay, flight data to destinations, source market holidays, and local events. It also monitors the performance of your marketing efforts, from PPC advertising to customer journey tracking and content performance.

With Vantage Point, all the data Advant gathers (competitor rates, customer behaviour, market trends) flows back into one central point. Every day, new data streams in, and this system constantly monitors, tracks, and refines. It's efficient, smart, and always improving.