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3 hotel data pain points and how a CDP can help

Last Updated: April 29, 2024|Categories: Blog|Tags: , , |4.8 min read|

Are any of these scenarios familiar?

  • You try to offer your guests personalized experiences, but your efforts are hampered by fragmented guest profiles scattered across departments and/or properties.
  • You attempt to use guest data to tailor your marketing campaigns but suddenly realize you may be violating the latest updates in ever-changing privacy regulations.
  • You can’t seem to figure out how to safeguard sensitive guest information while keeping it at the fingertips of the right team members when they need it.

Managing guest data comes with many challenges, from tools that don’t integrate to evolving security concerns. But amid these challenges there’s a beacon of hope: a Customer Data Platform (CDP). Here we take a closer look at three common data pain points that hoteliers deal with, and how a CDP provides the ideal solution.

What you will see here

Pain point #1: Messy and siloed data

Navigating the labyrinth of messy and siloed data is a perpetual headache for property owners, with data silos driving up costs by as much as 80%. It’s common to have your guest data spread over different platforms, such as your property management system (PMS), spa, golf, and restaurant reservation systems.

Trouble emerges when each department operates in its own silo, essentially hoarding valuable guest information that remains inaccessible to other teams. As a result, each department only deals with fragmented insights, and never operates with a holistic view of guest information. Research from Forrester shows that 75% of automated, personalized customer engagement attempts will fail to meet ROI goals due to inadequate buyer insight.

In addition to fragmented data, dirty or messy data is also an issue, eating up between 15% to 20% of your IT budget. Often your PMS is the culprit. Unless a guest is logged into your website or app, a new guest profile gets created with each new reservation. This can lead to duplicates due to variations in information such as email addresses, nicknames versus full names, work addresses versus home addresses, etc. This overload of profiles distorts guest counts, hurts your ability to use segmentation, and undermines your marketing decisions.

How a CDP helps:

Revinate’s CDP offers robust identity resolution with the ability to automatically cleanse, de-duplicate, synthesize, and merge guest data thanks to powerful AI-driven clustering models. It efficiently and effectively combines data from multiple sources to create a unified guest profile that accounts for customer activity across touchpoints.

Pain point #2: Data security risks

Data security risks loom large in the hospitality industry, presenting a formidable challenge for property owners who strive to protect customer information and uphold regulatory compliance. Data breaches within the hospitality sector come with a hefty price tag, averaging $2.94 million per breach between 2021 and 2022. Beyond financial losses, these breaches also tarnish property reputation and erode customer trust.

Furthermore, the stringent requirements of regulations such as General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) add an additional layer of complexity, with steep penalties for noncompliance. Violations of CCPA can result in civil penalties of up to $7,500 per violation, and non-compliance with GDPR can lead to administrative fines of €20 million or 4% of total global annual turnover for the previous financial year, whichever is larger.

Additional complications arise with the imminent demise of third-party cookies, which have long been used for tracking and targeting guests. Third-party cookies pose risks to customer privacy since they amass vast amounts of personal data without the consent or often even the knowledge of customers. The shift away from third-party data has led to a need for privacy tools offering new identity resolution strategies.

How a CDP helps:

By centralizing and securing guest data, a CDP not only safeguards sensitive information with encryption, but also helps ensure compliance with regulatory mandates. Moreover, rather than relying on third-party data, a CDP plays a crucial role in empowering hotels to leverage zero-party and first-party data effectively. This is data that your customers willingly provide. You gain invaluable insight into guest preferences, behaviors, and interactions – which also helps you address a third major pain point: personalization.

Pain point #3: Personalization challenges

Personalization presents a real conundrum for hoteliers, as you struggle to balance your guests’ desires for tailored experiences and their concerns over the privacy and security of their personal information. Research shows that 81% of guests willingly share basic personal information in exchange for a more customized experience. Yet nearly the same percentage will lose faith and abandon your brand following a data breach.

Studies reveal that eight out of ten companies admit they would benefit from unified customer profiles and hyper-personalization, yet only 25% have the capability to do so. Without sophisticated segmentation tools, many properties will resort to sending generic, mass communications to their entire database. This lack of personalization not only diminishes guest satisfaction but causes you to miss out on opportunities for revenue generation, with effective personalization delivering five to eight times the return on investment.

How a CDP helps:

The personalization power a CDP delivers can be a true game changer. With advanced segmentation capabilities based on customer loyalty, preferences, booking behavior, and more, a CDP enables hotels to deliver highly targeted and relevant communications. According to the Revinate hospitality benchmark report, emails with three segment filters bring in 2.6 times more revenue per recipient than those without.

Harness the power of a CDP

Property owners face numerous obstacles in today’s competitive landscape. And while these pain points may seem daunting, you can have a powerful ally in the form of a CDP. By harnessing its capabilities, you can seamlessly navigate the complexities of guest data management while achieving personalization, regulatory compliance, and revenue growth. Learn more about the Revinate CDP.

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