Hotel 2020:
The personalization paradox

Driving intimacy, consistency and efficiency for profitable growth

Buoyed by signs of global economic recovery and optimistic growth forecasts in developing economies, hotel chains will continue their rapid expansion in the coming decade. At the same time, intense competition in key guest segments, ever-increasing guest expectations and more diverse traveler needs will apply pressure to keep room rates down.

To maintain profit margins, hoteliers will need to renew emphasis on cost reduction and break through the consumer perception of commoditization. Gaining a better understanding of customer needs and preferences – or guest intimacy – can enable the delivery of personalized services that will help increase customer satisfaction, lower service costs and improve guest loyalty. Ultimately, personalization can result in the development of specialized services – delivered according to current preferences – for which guests will be willing to pay a premium.

Further, to break through the consumer perception that hotel brands are all the same, hotel providers must implement solutions that provide unique insight into guest preferences and apply this knowledge to deliver increasingly differentiated and delightful services. Paradoxically, it is standardization that will pave the way not only to control costs, but also to provide the differentiated customer experience guests crave.

In this highly commoditized industry, the opportunity exists for aggressive hotel chains to set themselves apart from their competition through dedicated efforts to personalize guest services, increase guest intimacy and standardize operations. For those hotels that wish to join an elite group of pacesetters, personalization and standardization provide a path to progress.

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About the author

  • Steve Peterson

    Steve Peterson

    Travel and Transportation Lead, IBM Institute for Business Value

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