The Hotel Matrix: How Information Shapes Success in Hospitality

January 11, 2017

Remember that scene at the end of The Matrix where Neo sees the entire world in binary code? Armed with the understanding that everything is information, he can suddenly do whatever he wants. Not even the secret agents can compete with his ability to access and interpret data.


I know more than one hotelier who would love to have this kind of processing power. Not to leap between buildings and punch through walls, but to see what’s really going on in the hospitality matrix. Bookings, reviews, brand loyalty, guest psychology.


Let’s face it: The world of hospitality is dominated by information. Various sources (including StatisticBrain, Digital Harvest and Statista) say that approximately 50-60% of all travel reservations are now made online. It’s difficult to pinpoint the number exactly, but it’s almost certainly a majority, and it’s growing. (It wasn’t that long ago that this figure was only around 10% and the pundits said it would never grow much more than that!)


It’s also certain that bookings don’t happen accidentally. Back in 2015, Expedia reported that travelers browse an average of 38 web sites before making a decision. People are soaking up a lot of information before they punch in those credit card details.


TripAdvisor—which boasts around 390 million unique visitors every month, and is one of the world’s largest collectors of online travel data—is well aware of this. That’s why they chose to leverage their vast collection of information  and  introduce “metasearch” functions back in 2013. This allowed users to search in entirely new ways, like signing in with Facebook to see where friends have stayed.


With information, it’s a question of leverage. OTAs/review sites (like Expedia and TripAdvisor) are constantly trying to perfect the red pill—the formula that takes end-users down the rabbit hole and shows them what’s really going on—in order to drive revenue toward their companies and stay relevant.




But what about hotels? Where is our red pill?


As hotel professionals, we know that our own ability to compete is likewise linked to big data. At the Skift Forum in New York last September, AirBnb’s Global Head of Hospitality commented at length on just how far behind hotels are in terms of data science. We may not like to hear this from AirBnb, but it’s difficult to deny. Properties that are able to distill and interpret information can anticipate what happens next. Like Neo, they know which way to move.


The question is, how is this done? How can we manufacture our own red pill? Unless you’re a global hotel chain with profoundly deep pockets, or happen to know a computer genius willing to do you a very big favour, your options are limited to:


  • Gradual adoption of smarter technology and more creative use of data

  • Greater attention toward personalization for guests, from promotional offers to the on-site experience

  • Being a disciplined student of how data drives bookings and brand loyalty

  • Demanding better apps and software from developers


This last point is particularly important. The strength of companies like TripAdvisor is their ability to integrate and interpret data across multiple channels and in dynamic ways. Hotels—especially small chains and individual properties—fall behind because they rely on “silos” of data, usually contained within property management and central reservation systems. These systems do a poor job of integrating data from external sources and providing managers and marketers with a deeper perception of what’s going on. As Seth Godin said in a recent blog, “businesses thrive or suffer because of active choices made by programmers and the people they work for”. It is not the algorithms fault – we get what we ask for!



Beauty in simplicity


It’s worth pointing out that complexity is something of a paradox when it comes to mining and interpreting big data in the hospitality industry. In a world flooded with information, guests and hotels actually want fewer options that save time and create meaningful connections. Whether you’re trying a new app that calculates guest acquisition costs or working with a full-scale hotel marketing agency, it’s important not to be dazzled by charts and graphs. The ways in which we collect and use data should not simply look impressive, like so much code tumbling down the screen. They should allow hotel managers and their guests to see things more clearly and act more decisively—lest we forget that machines were built to help us, and not the other way around.





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