Hyper-Personalization in Hospitality – a Step beyond Customization

Individual approach is crucial to acquiring and keeping customers for any business, but we are witnessing a movement towards a new level of personalization in the hospitality industry. In this article, you can find answers to questions like:

 

• What are the benefits of hyper-personalization?
• What technologies support the latest personalization trends in the hospitality industry?
• How should organizations strike a balance between tailored services and the customers’ privacy?

 

As a travel and hospitality tech company with 20+ years of experience, the latest technology, and human resources, Onix can also assist with your personalization strategy implementation.

 

While recovering after the pandemic, the travel and hospitality industries must continue transforming, adapting to changes, and addressing challenges. 

 

For example, hotel prices will keep growing, amongst inflation and high demand. Guests want to maximize their stay in every way, but instead, hotels make them pay more without increasing the value of a stay due to rising operational costs.

 

In this situation, hotels that add value otherwise, e.g., through saving travelers’ time or enriching their experience, will be the ones to remember, revisit, and recommend. 

 

Positioning businesses to win requires meeting customers’ unique needs much earlier in the customer journey and making guests feel like they are getting more for their money.

 

Whether you’re a boutique inn or a global hotel chain, guest-centric marketing and services are key to success. Read on to learn how you may win the hospitality personalization game in 2024.

 

 

What Is Hyper-Personalization in Hospitality Contexts?

Personalization refers to tailoring communications, content, offers, and services based on information like the customer’s name, gender, or location. Customers associate it with feeling special, but it also saves time and simplifies decision-making.

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Tailoring offerings and outreach to the right individual at the right moment may increase revenue by 10-15% and marketing-spend efficiency by 10-30%. The more a company improves customer knowledge and intimacy, the higher its returns may be. Focusing on the relationship and long-term value also increases upward migration, retention, and loyalty.

 

According to the 2023 State of Personalization report by Twilio, 

 

• 62% of businesses cite personalization’s ability to help retain current customers
• 69% are increasing their investment in personalization
• 92% of companies use artificial intelligence (AI) to drive personalization

 

Unfortunately, most businesses are still personalizing at the segment level while customer expectations have moved beyond that. Enter hyper-personalization that takes this approach several notches higher.

 

Deloitte defines it as harnessing real-time data to generate insights to deliver services, products, and pricing that are context-specific and relevant to customers’ manifested and latent needs.

 

In the hospitality industry, hyper-personalization revolves around delivering personalized experiences to identified micro-segments and even understanding each guest’s lifestyle, behaviors, purchasing habits, nuanced preferences, requirements, and evolving needs using a unified guest profile and trip context.

 

(Compared to traditional market segments, micro-segments are smaller groups of customers categorized according to unique identity, behavioral patterns, and other factors.)

For example, a personalized email may address a guest by their name and suggest their favorite room type. Hyper-personalized communication requires knowing their usual wake-up time, favorite brand of champagne and toiletries, preferred room temperature, etc. 

 

This knowledge, along with predictions of their wishes and other factors, enables hoteliers to tailor one-to-one interactions between a guest and the hotel at every touchpoint of the customer journey according to the guest’s real-time actions, such as:

 

• deliver tailored marketing messages, highly relevant content, and personalized recommendations to individual customers across various platforms
• offer products that precisely match their needs at individualized prices
• send schedules of potentially interesting local events ahead of their stay
• customize their stay and cater to their preferences and wishes while at the hotel, making them feel like the center of attention

 

… and more. A personal greeting, an invitation to a special event, or awareness of food preferences or allergies are all ways to demonstrate that a hotelier cares for every guest. Let’s take a look at some of the technology and client-facing solutions that can help hotels impress their guests and keep them coming back for more.

 

Technologies Facilitating Hyper-Personalization in Hospitality Business Processes

To provide the right service to the customers in their travel context, hoteliers basically should capture two things:

 

1. data on the customer’s past actions and preferences
2. real-time data to provide the context of a particular trip, i.e. when and with whom they’re traveling, for how long, for what purpose, etc.

 

Then, using this information, they should develop services to meet different groups of needs.

 

The following technology advancements and software can help complete this mission.

 

Big Data Analytics

The journey toward hyper-personalization in hospitality marketing begins by collecting and analyzing extensive and diverse customer data, identifying the target audience, and constructing comprehensive customer profiles.

 

Then, they should utilize technology and automation to scale and streamline personalization efforts and craft marketing strategies to cater to customers continuously.

 

Luckily, hotels are sitting on a goldmine of information. They aggregate it from

 

• Social media interactions
• Emails
• Website visits and past bookings through reservation systems
• Mobile apps
• Digital analytics
• Transactional data
• Consumer surveys
• Guest reviews and other feedback
• Customer preference data
• Loyalty programs
• Call center / front desk
• Chatbot data 

 

Hoteliers must use all this data to personalize all aspects of the guest journey and digital and physical experiences.

 

For example, Onix once developed an analytics solution for a competitive analysis agency. The system was capable of analyzing all customer reviews on Tripadvisor regarding hotels in a specified area. It could segment the reviewers, e.g., by age, geography, and income level, and even discern the reviewers’ emotions using semantic analysis of the comments.

 

These insights enabled the agency’s clients to understand what particular types of guests liked and disliked about their competitors to adjust their offers and services accordingly.

 

Outreach hyper-personalization also requires hoteliers to work with new sorts of data, from voice to visual. The trick is in processing and analyzing this data on a massive scale to reveal actionable insights into customer booking behaviors, individual preferences, needs, and desires (particularly of high-value customers).

 

Read also: The Tech Advantage: Trends Reshaping Hospitality and Guest Engagement

 

A centralized customer-data platform (CDP) is essential to unifying paid and owned data. Unlike traditional customer relationship management (CRM) systems, CDPs provide machine learning (ML) automation to cleanse data, connect a single customer across devices, cookies, and ad networks, and enable real-time marketing campaign execution across touchpoints and channels. 

 

 

For example, data and analytics help hotels identify opportunities. They leverage customer segments and microsegments and identify behavioral, transactional, and engagement trends.

 

This information enables them to deliver the right content through tailored emails, recommendations on the website, mobile app, chatbot, or personalized social media interactions at the right points in a customer’s journey.

 

Recurring interactions create more data, helping brands generate more actionable insights and design ever-more relevant experiences.

 

Advanced analytics also power at-scale content creation and AI-driven decision-making, enabling hotels to respond to customer signals in real-time.

 

For example, a hotel’s website or mobile app can display personalized recommendations based on a customer’s browsing history and booking behavior. Suppose a user frequently books suites with ocean views, dines at the hotel’s restaurant, and enjoys spa services.

 

The app would automatically highlight these room options, curate a personalized offer including a spa package or a fine-dining experience, and offer an exclusive deal – all in real-time.

 

AI-driven recommendations based on a traveler’s previous stays and preferences will likely become commonplace in the coming years.

 

 

Predictive analytics and models also use historical data and external information about the weather or local events to anticipate guest behaviors. For example, they can determine what content and messages to serve and what activities a guest might enjoy at the hotel. 

 

The consolidation of the various customer profile data sources facilitates building a unified profile that encompasses behavioral data, historical interactions, preferences, predictive analytics, and personalized end-user touch points. Deeper insights into guest behavior and preferences help develop innovative solutions and strengthen the brand-customer relationship.

 

Revenue management software (RMS) can also help hotels get to know guests better, both as micro-segments and as individuals, and even predict the behavior of each category.

 

Comprehensive customer profiles will help personalize each aspect of the guest’s stay, starting from early check-in to specially crafted events and activities based on the guest’s interests. For example, guests with young children may appreciate a complimentary membership to the hotel’s kids’ club, which might result in customer loyalty and repeat business.

 

Hyper-personalization should extend beyond the stay. The easiest way is to ask for honest feedback: customers care for businesses that care for their opinions. Moreover, the analysis of their feedback, reviews, likes, and dislikes can facilitate further adjustments and improvement of the hotel’s services.

 

One of Onix’s clients, a Japanese company, actively uses data to enhance user experience and grow bookings on their hotel search and booking platform. Some of the solutions they use are:

 

1. Individual preferences

At the registration, travelers can detail their preferences: choose their favorite hotel chains, select the amenities that matter for them and those they can do without, and add places they would like to visit.

 

The system analyzes these details and data from integrated platforms to obtain up-to-date information about properties matching each traveler’s specific interests and needs.

 

For example, if they indicated an interest in museums, the system would recommend hotels in the vicinity of such establishments. After the user has registered and defined their main preferences during Personalized Recommendations, the system uses this information to adapt the search process and interface elements to their preferences.

 

For example, if they are looking for hotels in a certain region or city, the interface can offer a map of the selected location and nearby places with recommended hotels that match their choices.

 

If a user adds new places or changes their preferences, the interface will automatically adapt to display relevant and personalized recommendations.

 

2. Location-based filtering

Hotels in areas previously visited by the user are prioritized in the search results, as are hotels with higher review scores and extensive feedback. The platform also allows searching and filtering hotels based on their proximity to specific metro stations.

 

It calculates distances and displays relevant results, helping travelers make decisions based on their preferred transportation options. Location-based promotions and discounts on the home page can also be customized according to a user’s preferences.

 

3. Amenities filtering

The application also filters hotels based on a user’s desirable amenities, such as swimming pools, parking, free Wi-Fi, or complimentary breakfast.

 

4. Saved searches and preferences

The platform not only allows users to save their preferred search criteria and hotel preferences but also keeps them in the user’s account, stores them locally, and incorporates them into query parameters.

 

The saved preferences are readily available even if a user switches devices or accesses the platform from different locations.

 

A unique feature also enables them to share their saved search criteria and preferences with other users and benefit from their insights and recommendations.

 

Moreover, they can reset filters for their friends or acquaintances, providing a dynamic and interactive element to the hotel search process. Users can also share dynamic URLs reflecting the saved search criteria with others, allowing them to view and experience the same filtered search results.

 

5. Booking history

The platform remembers hotels previously booked by the user and suggests similar options, ensuring a personalized experience for returning customers. 

 

For example, if they tend to choose hotels near tourist attractions, the system can highlight promotions in those areas. It also intelligently prioritizes hotels in familiar areas, understanding that travelers may prefer specific neighborhoods or business districts. Based on their past interactions with the platform, it also suggests options that have garnered positive feedback from similar users.

 

6. Special offers and discounts

Based on previous reservations and user preferences, the system generates individual offers and discounts. The interface can highlight special promotions for those hotels that meet the user’s preferences and recommendations.

 

For example, if they often choose hotels in a certain price category or specified amenities, the system can suggest special offers for similar properties. The system can highlight discounts and offers on the home page or on the user’s account page.

 

7. Price and rating relevance

Besides filtering based on a user’s preferred price range and desired ratings, the platform employs dynamic pricing algorithms considering seasonal variations, special events, and booking lead times.

 

It presents users with prices reflecting current discounts, enabling them to make informed decisions and save money during specific seasons or promotional periods.

 

8. Post-booking communications

After a user completes a booking, the platform suggests similar hotels in a follow-up email. These recommendations consider the user's preferences and the characteristics of the booked hotel, encouraging users to explore more options within their preferred parameters.

 

Moreover, notifications inform users about new hotels or promotions similar to their favorites or previously viewed options.

 

9. Favorites and visits history

The user profile section lets users access a list of previously viewed hotels, which is handy for users who revisit specific locations.

 

10. Integration with a loyalty program

The platform is integrated with the Rakuten loyalty program, allowing travelers to utilize Rakuten Points coupons for additional discounts on their hotel bookings.

 

11. Feedback loop

The platform encourages users to provide insights into their experiences and meticulously collects user feedback and behavior data. This approach ensures that the platform remains aligned with evolving traveler preferences and industry trends and improves continuously.

 

The combination of Vue.js and Ruby on Rails enables the seamless integration of these personalized features into the application.

 

Artificial Intelligence (AI) and Machine Learning (ML)

AI and ML algorithms are essential to processing customer data and other information and delivering personalized experiences at scale.

 

For example, AI can automate various aspects of the hyper-personalized approach, such as customer segmentation, content creation, and recommendation delivery.

 

 

Booking websites tend to overwhelm customers with offers that visitors won’t even read. Hyper-personalization, on the contrary, should spare customers the trouble of choosing from dozens of similar offers. Deal-seeking travelers will be particularly receptive to timely offers based on previously viewed products, categories, and basket behavior.

 

AI can determine which offers or services will most likely appeal to a particular micro-segment of travelers, enabling hotels to tailor their marketing campaigns accordingly. It also ensures that marketing decisions are data-driven, precise, and responsive to changing customer behaviors.

 

ML models power recommendation engines that consider behaviors, preferences, and the current context of each customer to generate uniquely tailored content and deliver hyper-personalized experiences via homepages, emails, push notifications, and other channels.

 

For example, as part of a modernization strategy for the same Japanese client of Onix, their booking engine now employs advanced ML algorithms and geospatial intelligence. The result redefined user experiences in accommodations booking. Namely:

 

• The integration with mapping technologies lets modernized systems curate hotel suggestions that resonate with each location’s unique atmosphere.

 

• The booking engine allows filtering and searching for accommodations based on specific amenities, empowering travelers to tailor their experience to their unique needs.

 

• Going beyond conventional search parameters, the booking engine allows travelers to explore hotels based on their proximity to railway stations.

 

• The system dynamically profiles users based on user-hotel interactions, constantly learning and adapting to individual preferences. This intelligent profiling ensures that recommendations evolve with the user.

 

• The booking engine also incorporates dynamic pricing mechanisms. The systems continuously analyze real-time market conditions, seasonal trends, and user demand to give travelers transparent and competitive pricing.

 

Hotels embracing hyper-personalization should go beyond dynamic pricing and offer pricing that also considers a traveler’s needs, goals, and spending patterns.

 

Based on historical and real-time data, such as the length of stay, whether it’s a business person or a family traveling with children, etc., hotels can sell the same room at different rates, highlighting characteristics the guest desires most.

 

Attribute-based shopping (ABS) also drives hyper-personalization. This model allows travelers to select amenities and desired room features (e.g., a lower floor, a balcony with a view, etc.) to buy as part of their room experience.

 

In 2023, the Hilton hotel group was piloting software that would enable guests to include add-ons as part of packages at the booking stage. They tested several different AI-powered packages, including ones allowing guests to arrange parking, pre-book meals at reasonably short notice, and organize late check-outs.

 

Eventually, Hilton may make some of these add-ons bookable via partner distribution platforms like Booking.com and Expedia. 

 

Read also: Travel APIs: Types, Benefits, Best APIs, and How to Choose Them

 

Airbnb already applies a search algorithm that considers 100+ parameters to help users find the best accommodation option but aspires for even more personalized recommendations. In the words of their CEO Brian Chesky, Airbnb intends to become “the ultimate AI concierge pointing you to places, community, homes, experiences, and many more things.”

 

Learn more: How to Develop an App Like Airbnb? [Complete Guide]

 

By May 2024, we may expect Airbnb to be entirely reinvented, with AI at the center. One of the first planned AI infusions is in customer service.

 

Instead of an inexperienced customer service rep searching through hundreds of pages of Airbnb policies, an AI program could analyze a customer complaint and instantly pull the right policy, helping the human work much faster and impress customers.

 

 

Hotels can also leverage AI to enhance guest experiences on the premises. For example:

 

• Looking at a guest's past activities, hotels can recommend relevant itineraries, spa services, and local events and attractions.
• AI can analyze a guest's dining history to suggest meals tailored to their tastes or dietary restrictions.
• AI can provide hotel employees with contextually relevant information they need in real-time. 

 

Hyper-personalization should also be grounded in empathy. Unfortunately, it’s challenging for businesses to understand the patrons’ emotions and states without face-to-face interaction, and hospitality businesses can hardly do so at scale.

 

Luckily, ML is becoming increasingly better at reading and reacting to emotional cues. More sophisticated algorithms facilitate the interpretation of textual, visual, and auditory data to detect and assess emotions.

 

For example, Amazon’s Echo can detect a sick person by recognizing voice tones indicative of nasal congestion. Affectiva, an MIT Media Lab spin-off, uses ML to develop emotion-recognition algorithms that can map facial expressions like anger, fear, or joy.

 

Imagine a voice user interface that identifies a guest with a cold and notifies the room service so they bring complimentary hot tea and cough drops. Or a door entry system that places a guest’s mood when scanning their face and instantly turns on their favorite music in the room or offers movies that match that mood.

 

Advancements in AI and ML might make such scenarios a reality sooner rather than later.    

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AI can also inform the design of loyalty programs, offering rewards that align with each guest's specific behaviors and preferences.

 

Chatbots present one of the best ways to employ AI for more personalized booking and guest experiences. Let’s take a look at this technology and other tools to help you keep up with the latest personalization trends in the hospitality industry.

 

Solutions for Hyper-Personalization in Hospitality Environments

 

Chatbots and Virtual Assistants

ChatGPT, a chatbot using the GPT-4 language model developed by OpenAI, is good at imitating conversations with customers and can act as a search engine that accurately interprets a particular user’s wants.

 

Read also: How to Build an App with ChatGPT

 

Despite ChatGPT’s amazing capabilities, hospitality companies should not expect it to become a “one-size-fits-all” solution, e.g., as a digital concierge. One of the problems is that ChatGPT draws on all sources on the web indiscriminately, which means that its responses may contain inaccurate or outdated information.

 

Only a custom-trained ML model can deliver the desired results for a particular business and specific customers.

 

Learn more: How to Build a GPT Model: Prerequisites and Essential Steps

 

Whether ChatGPT or another AI-driven chatbot, this customer-facing AI application will undoubtedly feature heavily in the hospitality industry quite soon.

 

Chatbots can work as hotel booking assistants, answering questions, providing personalized recommendations, and assisting with reservations. They are fast, active 24/7, can be multilingual, and learn with each interaction, constantly improving their capabilities. A hospitality company can integrate a chatbot with its booking engine, CRM system, Messenger, etc.

 

Chatbots have proven effective at boosting direct reservations, reducing costs, and offering customers convenience. According to the management platform provider Little Hotelier, AI chatbots can potentially increase direct bookings by 30% and reduce customer service costs by the same percentage. 

 

For example, the Cosmopolitan of Las Vegas broke new ground for chatbots in the hospitality industry when it launched Rose, an AI-based SMS concierge, in 2017. Through real-time messaging, this “resident mischief-maker” recommends the best restaurants and off-menu cocktails, delivers loyalty program members their status and available offers, arranges amenity delivery, and more.

 

Upon launch, the chatbot was able to answer 80% of questions automatically, and guests who communicated with Rose were reportedly 33% more satisfied with their stay and spent 30% more than those who didn’t.

 

The UK-based Lake District Hotels chain decided to implement a chatbot partially to free up the reservation team’s capacity after an influx of guest queries and bookings in the second half of 2021.

 

In the first six months of its operation, the chatbot helped reduce phone calls by 70% and brought over £50K in direct bookings, prompting the chain to apply the solution to dining reservations as well.

 

Learn more: How to Create a Chatbot: The Ultimate Development Guide

 

Voice Assistants

Voice is one of the most natural and convenient ways to interact with technology. Voice-based controls can make hotels more inclusive for people of all generations.

 

Voice-activated services can provide a personalized way for guests to interact with a hotel, make reservations, check information, get tailored recommendations or promotions, and more.

 

Moreover, voice assistants can create new revenue streams. Hotels can use them to upsell room services or cross-sell services at the hotel's restaurants, spas, or other facilities. In-room devices can also facilitate voice searches, deliver greeting messages from sponsors, announce events on the premises, run local vendors’ ads, and promote tourist attractions.

 

For instance, InterContinental Kaohsiung in Taiwan installed a multilingual voice assistant in 253 rooms when it opened in 2021. In just four months after opening, the hotel gathered 160K+ voice interactions with the guests. In 5 months, it managed to decrease the overall customer service handling time by 500 hours. 

 

Guests talk to the voice assistant on average 20 times per night. They often ask about city attractions, restaurants, and night markets, so the hotel partnered with local service providers to display promotions or exclusive deals to the guests.

 

The guests’ queries are visualized in dashboards and summaries of the guest engagement. This data helps the management create more accurate customer profiles, understand their customers’ priorities, and run follow-up analyses to optimize their offerings further.

 

Also in 2021, Legoland Hotels in New York and California implemented a voice solution on Google Nest Hub devices. The system allowed them to automate greetings, recommendations, queries, and room service requests.

 

The software provider claims that each device is used 7 times per evening on average, and, with 6x usage versus traditional room phones, accounts for 30% of all service requests.

 

Additionally, the voice assistant can wake a guest in the morning, tell their kids bedtime stories in Legoland characters’ voices, and more.

 

Voice search via smartphones, connected TVs, or voice assistants like Apple’s Siri, Amazon Alexa, or Google Assistant have been anticipated to transform hotel booking. Hotels should consider optimizing websites and launching marketing campaigns for voice searches.

 

Hotel Property Management Systems (PMS) & Other Solutions 

Defining the unique features of each accommodation is a significant step towards hyper-personalization. Hotels can present the same room in different ways to different customers. For example, a business traveler will view a balcony as a good place to sit with a laptop, and a leisure traveler will think about sunbathing.

 

Unfortunately, hotels usually break their inventory into room types that give travelers a general idea of the accommodation. Terms like standard, deluxe, or suite tell very little about their unique features, such as the floor, the view, the actual bed size, etc.

 

Those features are not integrated into the data structures of PMSs and central reservation systems (CRSs). Oversimplified categories preclude the automatic generation of highly personalized advertising messages and recommendations.

 

Custom property management software development can solve this problem and empower a company to facilitate search by more parameters and create unique products and offers to match the individual needs of more travelers.

 

Learn more: Hotel Property Management Systems: Must-Have Features & Benefits

 

AI can also help generate property descriptions, analyzing best samples at competitor sites, customer reviews, and pictures of a specific property to identify amenities for the description.

 

Customer Relationship Management (CRM) Systems & Other Software

Truly personalized communication and experiences require that businesses create a 360-degree view of the customer and organize customers into segments and microsegments. This requires integrating data from booking systems, social media, customer service, PMSs, hotel point-of-sale systems (POSs), and other touchpoints.

 

Meanwhile, siloed data is listed among the major challenges to personalization in travel and hospitality.

 

Luckily, hospitality businesses can use technological platforms, such as CRM and customer experience management (CEM) systems. 

 

CRM systems that aggregate guest data across fragmented sources and centralize interactions can enable hoteliers to provide personalized services and offers. They can also track customer activities, spot upsell and cross-sell opportunities, run tailored marketing campaigns, and evaluate the performance of personalization efforts.

 

CEM software can use big data to create tailored one-to-one interactions between the guest and the hotel at scale. Insights into customers’ browsing or buying habits help hotels tailor their offers and promotions and automatically provide services a guest is searching for.

 

For example, Onix’s client MisterB&B is connected with Vero, a customer engagement platform (CEP) that facilitates advanced customer segmentation and offers content creation and design tools that promote personalization along with A/B testing capabilities to see what content and timing works best with different segments.

 

It also uses the most accurate data to customize every email and push notification. The CEP enables MisterB&B to send perfectly timed messages to customers based on their activities on the booking platform.

 

 

Software also helps manage loyalty programs that reward guests for past purchases, promoting repeat business and long-term relationships between brands and customers.

 

Marriott, the world’s largest hotel chain, also runs the largest loyalty program. Marriott Bonvoy counts around 180 million members. To personalize communication with each of them, the chain hired IBM data scientists who mapped customer data across all its brands to power the Marriott Bonvoy app.

 

Loyal guests can access exclusive rates, advanced features, and personalized recommendations. Every time they interact with the app or redeem points, the acquired new data helps generate even more relevant promotions.

 

The role of brand mobile apps in personalization deserves a separate chapter.

 

Learn more: The Ultimate Guide to Developing a Mobile Booking App

  

Mobile Apps, Geolocation Services & Beacon Technology

Next-generation person-to-person interactions require that hotel employees be able to rely on insights from advanced analytics and customer profiles to provide personalized services. These insights can be delivered via mobile apps.

 

Contactless, self-service, and mobile-based solutions are an enduring trend from the pandemic that can help personalize guest experiences. Besides allowing the guests a choice and convenience, mobile reservations and contactless check-in/out can also help reduce the front desk workload, enabling staff to be more attentive to face-to-face guests. 

Source

 

Read also: Single Payments Platforms Driving Digitalization in the Hospitality Sector

 

A broader use of facial recognition, location recognition, and biometric sensors could greatly facilitate hotels’ personalization efforts.

 

For example, a hotel may implement a system using RFID tags embedded into guests’ keycards. Readers installed throughout the premises would receive the ID number from a keycard and communicate it to the nearest employee station. This will help the staff discover more about the guest and personalize the service according to their preferences.

 

88% of travelers plan to learn about local culture and seek out local experiences. Hotels are well-placed to help their guests with these. GPS technology and brand apps can be used to track a guest's location and preferences and trigger push notifications with suggestions and offers when customers approach an establishment. These messages will be relevant because they’ll arrive in real-time and will be based on a user’s immediate surroundings and interests.

 

Beacons placed around hotel properties and partner establishments can interact with guests' smartphones to provide location-based information and offers, enhancing their experience.

 

Hotels can also partner with local businesses to increase guest engagement and enrich their on-site experiences. Local wineries can organize tastings at the bar; chefs can teach cooking regional dishes; artisans can hold workshops, and so forth. These activities can be publicized or booked via a hotel app and voice assistants.

 

 

Content Management Systems (CMSs)

A hyper-personalized approach requires that a hospitality business’s content also speaks directly to each micro-segment, increasing conversions and enhancing customer satisfaction.

 

This means that its CMS should tailor emails, website copy, blog posts, social media posts, and other marketing messages to particular customers’ interests and preferences and deliver them based on their behavior and other data.

Personalization involves creating variants of content, such as different versions of a webpage or marketing email, for different micro-segments, defining which segment should receive which version, and testing the variants through A/B or multivariate testing, or other optimization techniques.

 

One popular method is rule-based personalization. A set of rules or criteria specify how each user category should receive content based on their behavior, location, device, or other qualities. For example, a rule-based system on a hotel’s website can suggest rooms and services based on a user's browsing and purchase history.

 

Modern CMS software facilitates personalization at scale. It can integrate a business’s marketing automation, CRM, or CDP to track user behavior and centralize customer data, creating a 360-degree view of its customers. 

 

Such systems can aggregate content from a business’s product information management (PIM), digital asset management (DAM), or even other CMS software. A single system, from one interface, can consistently deliver all types of content to each customer across all digital channels, including virtual reality (VR) and augmented reality (AR).

 

The same software will help determine the best-performing campaigns and areas for improvement.

 

Headless personalization becomes possible with new CMSs. Marketers and content authors can generate personalized variants based on specific customers’ traits in the editor, and the IT team would query the content by specifying these traits in their API request.

 

Generative AI engines speed up the creation of textual and visual content tailored to every micro-segment, and automatic content translation support in CMS solutions helps personalize it further.

 

Read also: Generative AI: GPT-4 vs. GPT-3 Detailed Comparison

 

Virtual Reality (VR)

Marriott Hotels launched the first-of-its-kind VR-based guest service back in 2015. Their “VRoom Service” allowed guests to order inspiring VR experiences to their rooms. This involved delivering a Samsung Gear VR headset, accompanying headphones, and easy-to-use instructions to the rooms where they were available on loan for up to 24 hours. 

 

Read also: 5 Best Virtual Reality (VR) Platforms for Game Development

 

VR is still considered a new technology in the hospitality industry, but businesses will surely be considering the capabilities of VR and metaverse – immersive 3D environments where people interact with each other’s avatars and surroundings – soon.

 

The global metaverse in travel and tourism market is projected to grow at a CAGR of 26.6% and reach USD 220.8 billion by 2028.

 

VR technology will likely play a more significant role in hotel sales and marketing. According to the 2022 report by Oracle and Skift, notably called “Hospitality in 2025: Automated, Intelligent… and More Personal,” over one-third of travelers would be interested in virtually exploring a hotel before booking.

 

 

Hoteliers can create 3D content like 360-degree photos and videos of rooms, restaurants, café terraces, and hotel beachfront locations, complete 3D models of properties, and even games to encourage travelers to visit their hotels. This content can be linked to product information retrieved dynamically from their CMS and facilitate purchases right from the virtual reality! 

 

Making the VR content accessible on various devices, without the need for a VR headset,  will be convenient for potential customers and help the message reach broader audiences. Many hotels already offer VR tours on their websites, and almost half of hoteliers said they were developing or would develop VR maps of their properties to accommodate such tours.

 

Learn more: AR and VR Business Opportunities in the Travel Industry

 

For example, in 2019, the boutique GHV hotel in Vicenza, Italy, ordered a new marketing portfolio that included a virtual tour of its key areas.

 

Drop-down menus opened access to 360-degree views of guestrooms, event spaces, restaurants, and wellness areas to reflect the luxury offering. A dynamic Book Now button enabled reservations directly from the tour. The marketing portfolio helped increase bookings by 37%.

 

Virtually replicated properties may also facilitate bookings in the meetings, incentives, conferences, and exhibitions sector. A VR app can connect buyers and hotel sales teams inside a digital twin of a property. Event planners may walk through the property, scrutinize details, and hear a hotel salesperson speak with the help of VR headsets.

 

This approach also facilitates the planning of decor, menus, presentations, etc., reducing the need to travel before the event.

 

According to the same 2022 report, only 7.8% of travelers expected to have VR consoles in their rooms, and only 4% of hoteliers planned to provide them by 2025. However, they should consider the benefits of VR as part of their hyper-personalization strategy. 

 

More and more professionals, including employees of high-profile companies, are working remotely or in hybrid environments, which leads to a growing number of guests combining work and play during their stays.

 

Hotels should capitalize on this dual need. For example, the hotel may include VR headsets in its services so that guests can remotely collaborate with colleagues in virtual environments. These environments may represent the hotel’s best areas, promoting it among the guests’ colleagues and friends.

 

 

The metaverse is also appealing to the hospitality industry. In 2022, Americans expected to spend 3.7 hours daily in the metaverse within five years. Hotels must be prepared to meet their expectations, especially if they target millennials and Gen Z customers.

 

Offering guests VR headsets in their rooms also opens doors to endless leisure and marketing opportunities that can enrich their stay. For example:

 

• VR movies and games can entertain adults and kids, especially when a parent works.
• VR applications can also entertain and educate quests while promoting local museums, galleries, and other attractions.
• Guests can exercise and keep fit right in their room using a VR fitness app.
• Virtual meditation sessions in their rooms can help guests relax, calm down after a day of work, and fall asleep.

 

 

Augmented Reality (AR)

Augmented reality uses graphical or textual overlays on physical environments. Without any extra equipment, guests can point their smartphones at real-world objects, such as QR codes placed across the property, to summon up additional information.

 

Read also: QR Codes for Payments: How to Implement and Why?

 

AR providing interactive mobile-based information about a hotel or other areas of interest is increasingly used as a marketing tool. Hotels can use brand apps with an AR feature to offer entertainment, guidance, or promotions to guests when they are at specific locations.

 

For example, millennial and Gen Z guests might appreciate a game where scanned QR codes unlock challenges throughout the property. Others can use this tool to access restaurant opening times and reviews, interactive tourist information maps, etc., or even create user-generated content.

 

Ecosystems

Imagine a scientist flying from Tokyo to New York to attend a conference; their trip would involve services from many sectors, such as airlines, hotels, restaurants, banking, entertainment, and retail. Although these providers jointly own the traveler experience, each sees and manages only a portion of the total buying experience.

 

 

Creating connections between those points represents an ample opportunity for personalization, as expanding partner ecosystems facilitate more consistent and smooth consumer experiences across all journey stages.

 

As AI becomes more efficient at predicting customer needs, personalization programs can benefit from smoother transitions from one system to the next.

 

Businesses should cooperate to expand the array of products and improve customer service.

 

For instance, a hotel can partner with a local restaurant to provide guests with a dining experience tailored to their dietary restrictions and preferences. This dynamic partnership approach can result in both the hotel and the partners accessing new customer segments.

 

Hoteliers determined to win the personalization game should also collaborate with local healthcare providers to increase the guests’ convenience and address their health concerns in a timely manner.

 

Telemedicine platforms and mobile apps empower hotels to offer their guests access to general practitioners, mental health counselors, and even dental care services right from their rooms.

 

Businesses should utilize various devices to facilitate seamless travel experiences and enhance guest satisfaction. As these devices proliferate, they will need to connect and use platform standards.

 

Despite the apparent benefits, these personalization trends in the hospitality industry raise serious trust and privacy concerns. 

 

Privacy Concerns

Personalization can be implicit (when businesses capture data by tracking a customer’s activities) and explicit (when the customer provides data). Modern travelers are savvier and better informed than ever before. They expect brands to deliver the right information and services every time but not to cross the lines of privacy.

 

With increasingly frequent data breaches, customers grow more reluctant to give away their personal information. Only 51% trust brands to secure and use their data responsibly.

 

In 2022, 73% of travelers were reportedly interested in hotels using AI to analyze their travel data for more relevant advertisements and offers or more personalized customer service.

 

Over 43% stipulated that they were interested only if they willingly provided the data for that purpose.

 

To deliver personalized experiences while earning and retaining their customers’ trust, hoteliers and their partners must be transparent about data usage and adhere to data protection regulations. They should ensure that they use personalization strategies and technologies responsibly and ethically, considering data privacy and guest consent.

 

Proactive management of customer privacy will be vital. Hoteliers should go out of their way to make clear that they take data privacy seriously. They must be transparent about data use, limit the processing of personal data to the necessary minimum, protect data against theft, and allow customers the right to be forgotten.

 

Data governance and privacy considerations must become a part of their marketing efforts. They should also consider each customer’s preferred way to obtain information. 

 

When requesting customer consent for data collection while prioritizing data privacy and security, hoteliers should:

 

• Clearly communicate the purpose of data collection
• Articulate the tangible value customers will receive
• Use precise language
• Allow customers to choose the type of data requested and its purpose
• Offer explicit opt-in mechanisms and granular consent options
• Avoid pre-checked boxes

Customers should be able to check the given consent and see whether the objectives have not changed. Customer records must also be up-to-date and comply with local and international regulations.

 

The Takeaway

Hospitality hyper-personalization is a dynamic, data-driven approach that addresses website visitors and hotel guests as individuals and requires hotels to cater to their unique needs. Despite multiple benefits, only about 20% of digital-first brands can provide a one-to-one level of personalized experiences. The number of traditional hotels achieving this stage is close to zero.

 

In 2024, hyper-personalization is a strategic imperative for businesses striving not only to meet but exceed customer expectations. Companies building and activating this capability at scale can significantly increase customer retention, lifetime value, and revenue, driving brand loyalty and sustainable growth in an increasingly competitive market.

 

True personalization requires granular data, advanced technology, robust instruments, and a general shift in the way hotels market their products to guests and resellers and serve their guests. The following solutions can support your business’s shift towards hyper-personalization:

 

Technology will be at the core of a guest’s personalized experience before a trip, in the hotel room, and afterward. Businesses that want to stay ahead of the curve should explore new technologies and data and prepare to invest.

 

They should also approach hyper-personalization responsibly. Striking the right balance between customization and prioritizing customer privacy is essential.

 

Personalization is an ongoing process comprising continuous iterations and thriving on customer feedback. This involves capturing and analyzing data, monitoring user behavior,  continuously upgrading the data infrastructure, integrating new automation and analytics tools, and adjusting personalization efforts to ensure that they remain effective and relevant.

 

To deliver guest-centric experiences at scale, hoteliers also need new processes and roles. Their marketing teams and IT experts must join forces.

 

A product-management team comprising personalization specialists, data scientists, and engineers should build and refresh the company’s martech roadmap, develop use cases, track pilot performance, standards, and lessons learned, and implement cybersecurity systems to support personalized experiences.

 

These needs will raise demand for AI talent that can collaborate and solve problems with colleagues from across the organization. Onix’s AI/ML team has a track record of building solutions that can promote personalization, such as:

 

• image classification
• language identification
• news categorization
• social media content analysis
• social media sentiment analysis
• conversational engines based on natural language processing and deep learning
• image denoising in info-communication systems
• product type and style recognition
• face recognition and manipulations
• crowd video analysis and behavior pattern recognition
• mapping and geographic information systems

 

… and more. Moreover, our expertise in travel and hospitality software and web and mobile booking systems development makes Onix a perfect partner on your hyper-personalization journey. Whether you want to create a custom solution from scratch or upgrade your existing system, we are here to help!

 

FAQ

 

What are the benefits of hyper-personalization in hospitality and travel sectors?

 In travel and hospitality, personalization helps businesses:

 

• Demonstrate a genuine understanding and care about the guests, which enhances trust, customer retention, and loyalty, which 62% of businesses regard as a top benefit of personalization.

 

• Meet elevated customer expectations, driving higher satisfaction levels and fostering brand loyalty.

 

• Boost customer engagement through content and offers that directly resonate with their preferences and drive repeat business and loyalty over time.

 

• Increase customer lifetime value through improved customer retention, loyalty, and advocacy.

 

• Boost sales and revenue by raising conversion rates (by up to 23%), increasing the likelihood of booking directly with a hotel instead of third-party booking sites (76% of consumers are more inclined to purchase from a company that personalizes their experiences), helping fill gaps in their occupancy calendar, and creating new revenue streams.

 

• Gain a competitive edge over hotels lagging behind in personalizing guest experiences and create a new standard that is difficult to match for others.

 

• Optimize resource allocation, e.g., by accurately targeting customer segments with a high probability of conversion and reducing the personnel workload.

 

What are the challenges to personalization in the hospitality industry?

Some of the challenges include:

 

• Building a business case or justifying ROI. Most brands are only trying to figure out how to get started and allocate sufficient resources to their personalization efforts. As a result, travel brands allocate at most 10% of their marketing budgets to scale personalization.

 

• Focus on personalizing a single channel instead of the entire customer journey (i.e. browsing, booking, customer service, and so forth).

 

• Limited capabilities to orchestrate a personalized experience across the guest journey.

 

• Data-related problems, such as the fragmented landscape, the difficulties of multiple data sources integration, and the problems of inventory codification and end-to-end content execution process.

 

• Customer privacy. As data collection and analysis become more extensive and invasive, hotels’ personalization innovation is likely to trigger concerns among guests.

 

• Low investment in data and technology infrastructures.

 

• Lack of the core platforms required for personalization. Only about one-third of businesses have personalization engines and digital asset management capabilities. 

 

• Limited human resources, including AI and ML talent.

 

What should I consider before investing in hyper-personalization strategies and tools?

Some critical considerations are:

 

• Data collection and analysis

Businesses should invest in tools and technologies that can collect large volumes of customer data and derive actionable insights.

 

• Privacy and ethics

Businesses must ensure they uphold the highest standards of customer data management. They must include privacy and consent management models in their marketing strategy and use technology and tools to manage identity resolution and its use in campaigns in real-time. It’s vital to avoid being invasive while hyper‑personalizing content and offers. 

 

• Customer experience design

Businesses should adopt a customer-centric approach to strategies and focus on understanding current and potential consumer behavior and identifying opportunities for personalization at an individual level at each stage of the customer journey.

 

• Changes to organizational models

Hoteliers must analyze their business and work models’ readiness to integrate the necessary data management technologies and adequately implement them. They must rethink their organizational models and train employees to use new instruments.

 

• AI and ML expertise

Businesses should build or acquire this expertise by hiring professionals, investing in staff training, or partnering with AI and ML service providers.

 

• Continuous improvement

The technology and trends underlying hyper-personalization are evolving rapidly. Businesses must closely follow these changes and continually adapt to them.