How to turn data into money? | By Michael Toedt
When we compare the value of public listed hotel companies with the value of priceline or uber it is obvious, this is a complete different story. The value of Priceline is higher than the value of Marriott, Hilton, AccorHotels, IHG and Wyndham together. But how comes? How can a relatively young company so valuable? Priceline, Expedia or Uber, all these companies have one in common, they use the capabilities of Big Data in any possible manner.
When Microsoft bought LinkedIn in 2016, Microsoft paid US$260 per active user. At that time LinkedIn had about 100 million active users which led to the unbelievable price of 26 Billion US$. The question is, how much would an investor pay for a hotel company with about 100 million guests? Most likely, the guest profiles were not part of the evaluation process, but how comes? The answer is simple, hotels have not created a model to monetize data. For sure data is the new oil, the foundation of the fourth industrial revolution, called Big Data. But data is first of all just a raw material companies have to make useable. In order to make oil valuable it must be refined for instance to get petrol out of it. First after the refining process it can be used. It is the same with data. Data needs to be refined, it needs intelligence to get value out of it. But how to make data valuable, how to transform Big into Smart Data into values? The way is simple to explain, but the way extremely complex: technology wise, organizational wise, people wise and it needs the sponsorship from the top. A Central Data Management strategy means a shift of responsibilities and these needs the support from the CEO first of all. The way of creating value from data can be described in five steps:
How to turn data into money? | By Michael Toedt
Companies who follow these five-step approach will gain a complete different value set. The principle looks simple, but the change process requires a combination of leadership, an aligned team and the right partners. Hotels sit on a treasure of raw material like almost no other industry which waits to get refined. Hotels should start to fight back against the OTA's and use the new possibilities of Big Data.
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