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How Hotel Apps Answer the Challenge of a Post-iOS 14.5 World

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Kamini Patel in Guest Experience

Last updated March 23, 2022

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After one of the most challenging eras in the entire travel and hospitality industry, we’re finally starting to see light at the end of the COVID-19 tunnel, with STR forecasting that demand, ADR and RevPAR will fully recover to 2019 levels by 2023.  But with the pandemic not yet completely in our wake, a fresh challenge is already cresting the next wave, and it’s impacting hotels worldwide: operating in a post-iOS 14.5 world.

“The world’s most valuable resource is no longer oil, but data.” ~ The Economist

 

The Impact of Apple’s iOS 14.5 Update on Your Hotel Business

There are now 1 billion iPhone users across the globe, giving Apple an unprecedented power to influence the way consumers use their mobile devices. With the iOS 14.5 update that took place on April 26, 2021, they’ve wielded that power in a way that significantly impacts your ability to market and grow your hotel business.

With Apple’s new App Tracking Transparency (ATT), users can now choose whether or not they wish to share their data and browsing habits with third parties such as Facebook, Instagram and other platforms. In the recent past, platforms such as Facebook offered great places for hotels to advertise as well as connect with their customers due to the abundant data these platforms collected about people’s demographics and interests.

The trouble is that when you ask someone whether or not they want to be tracked, the majority will say “no.” According to Flurry Analytics, three weeks after the iOS 14.5 upgrade launched, the number of U.S. users who had opted in to allow app tracking averaged less than 6 percent.

As a result of the update, the pool of user data has considerably shrunk, causing hoteliers to become much less efficient in targeting and connecting with their ideal audiences. In addition, as opposed to using actual real-time data, Facebook can now only give hotels access to “modeled” conversions, which use aggregated data to inform them on how their marketing campaigns are performing.

This lack of high-quality data is having a detrimental effect on the digital marketing efforts of hotels. When using the Facebook platform, hotels must now cast a wider net, spending more money to get in front of more people who may or may not be interested in their offerings. The bottom line? Hotel operators who relied on popular platforms such as Facebook are now struggling to promote the right offer to the right audience at the right time.

 

A Developing Trend: The Third-Party Cookie Crumbles

Unfortunately, Apple CEO Tim Cook’s push to add more privacy features to the Apple ecosystem is not a purely isolated incident. It’s a developing trend. For a while now, companies have been able to collect data on people without anyone being fully aware that they were doing so. They accomplish this using third-party tracking cookies.

Companies that don’t have a direct relationship with your customer can plant third-party cookies to track a person’s online behavior across different websites. They collect personal data and segment it based on demographics, psychographics and other key points. These companies serve as intermediaries, and they then sell their valuable third-party data to other companies that use it to enhance their marketing efforts. In 2021, 83 percent of marketers relied on third-party cookies.

But third-party cookies are crumbling.

A Consumer Reports February 2020 survey revealed that 96 percent of U.S. residents believe companies should do more to protect the privacy of their personal data. Firefox and Safari have already phased out third-party cookies, and Google plans to join their ranks in 2023. So now, with third-party data on its way out, hoteliers must learn to implement the power of first-party data.

 

The Value of First-Party Data for Hotels

Research from Think with Google and eConsultancy uncovered a key trend used by top companies: They use first-party data to build stronger customer connections. First-party data is data that belongs to you because you collect it directly from your guests, so it’s unaffected by Apple’s privacy update. This fact – along with the growing shift away from third-party data – means that first-party data holds immense value for hoteliers for several key reasons.

It's Accurate: Because you’re receiving your information directly from your guests, you are assured that the data is accurate and reliable, unlike third-party data that must be aggregated from the data sets of outside sources. Furthermore, since the data comes from your audience, it’s more relevant for your business.

Complete Ownership: First-party data is data that you own. As you continue to nurture your guest relationships, you’ll be able to add new details and refine your data sets, keeping the data up-to-date and precise. It’s a renewable resource that continues to build on itself, delivering benefits that allow you to optimize your marketing and guest experience.

A Hedge Against Privacy Regulations: Global privacy regulations are most definitely shifting in favor of the consumer, and relying on first-party data helps you comply with global data protection laws. Because your guests choose to interact with your hotel, they understand who is collecting their data and why. A holistic first-party data practice at your hotel also gives you more control and transparency over what happens with that data.

 

Hotel Apps: An Ideal Source of First-Party Data

An effective way to access a rich supply of first-party data is by connecting with customers and potential customers via a hotel application. As opposed to relying on intermediaries such as Facebook, an app provides hotel brands with a direct link to guests. Current and prospective guests can conveniently interact with a web-based or native hotel application, allowing you to gather first-party data and build relationships with them before, during and after a stay.

During the pre-stay period, in-app interactions and search queries can provide sources of information about guest and potential guest preferences, family status, and details such as upcoming anniversaries and birthdays. You also have the ability to highlight specific property features, amenities and local attractions, raising your property profile and encouraging direct bookings (another great source of first-party information).

When guests are on-site, you can gather useful information by examining direct chats and mobile messaging along with in-app behavioral data. You can collect information on demographics like age, gender, profession, geographic region, interests, shopping behavior and transactional data.

Post-stay in-app interactions offer opportunities to gain unique feedback through follow-up survey responses. An advanced application also lets you incorporate data from your PMS, POS and CRM so that you can connect all of your first-party data points to build a single, holistic view of each guest journey. You can use this accurate, real-time data to create personalized experiences that garner greater guest loyalty, and targeted marketing promotions that are more likely to convert.


The Benefits of First-Party Data via Hotel Apps

The accurate first-party intelligence that you gather from a good hotel application delivers a number of benefits that help you tailor your messaging, shape the guest experience and improve your overall operation.

Increased Marketing Campaign ROI: A poll commissioned by the Digital Advertising Alliance (DAA) showed that nearly 70 percent of respondents like at least some ads tailored directly to their interests. Instead of having only a vague picture of your customers, the first-party data you receive from your hotel app gives you a granular view of your guests. You can use that data to segment guests by specific attributes and deliver targeted marketing-that-doesn’t-feel-like-marketing messages – achieving higher conversion rates and optimizing campaign ROI.

Optimized Guest Experiences: The direct relationship hotels establish with app users provides opportunities for guest experience optimization. You better understand guest needs and can anticipate requests in ways that take personalization to the next level. With control and ownership of your own data, hotel brands are perfectly positioned to personalize communications and customize experiences based on a guest’s interests, location, purchase history and more.

Greater Trust, Engagement and Loyalty: Nearly 90 percent of your guests prefer using a hotel app to manage their stay. Your in-app interactions – and the data you gather from them – are built on a trusted relationship, as opposed to going behind guests’ backs to cobble together personal information from intermediaries. With consistent in-app communication, you can quickly update your guests’ ever-changing information, adapt offerings to their preferences and help solve their problems, ultimately achieving higher levels of trust, engagement and loyalty.

Retargeting Capabilities: Another benefit of directly interacting with guests through your hotel app is your ability to harness the power of retargeting. Retargeting ads prompt return visits from those people who engaged with your app, maybe clicked around a bit, but left without booking. The average click-through rate (CTR) of a retargeted ad is 10x higher than the CTR of a typical display ad.

 

In Summary

Access to accurate and detailed guest data is table stakes for hotel businesses and should be a requirement for any hospitality software you choose. It’s the accelerant that helps propel you ahead of your competitive set. Due to the iOS 14.5 update and the rapid decline of third-party cookies, you can no longer rely on intermediaries to provide that data. Moving forward, it’s imperative for hoteliers to rethink their data collection strategies.

By employing an advanced hotel application, you gain access to the premium fuel of first-party data – giving you greater control over your data destiny, your marketing efforts and your guest relationships.

 

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Kamini Patel
GM of Operations & Finance @ Runtriz