Tailoring Data Strategies to the Segment

Different hotel segments approach data very differently. Intuitively, a budget hotel and a five-star luxury resort have distinct definitions of success and therefore track different metrics. What’s meaningful for a luxury brand might be irrelevant for a budget brand, and vice versa.

Different Segments, Different Data Priorities

In hospitality, one size does not fit all when it comes to data. A budget chain operating simple inns off the highway won’t measure success the same way as a luxury hotel catering to VIPs. For instance, a luxury resort may obsess over guest satisfaction details and ancillary revenue, whereas a budget motel is laser-focused on occupancy and cost control. This highlights why each segment requires a tailored data strategy – copying KPIs or tools across segments can lead to misleading insights or more importantly misaligned priorities.

Consider revenue mix: in a luxury hotel, room sales might only make up 60-70% of total revenue, with the rest coming from food & beverage, spa, events. In a budget hotel, rooms are often nearly 100% of the revenue (there’s no fine-dining restaurant or upscale spa on-site, but they might offer an early/late check in/out option). Which means that a luxury brand must track a wider array of metrics to capture this full picture, while a budget brand doubles down on the basics of selling beds for the night.

RevPAR and Beyond

RevPAR is a fundamental metric across the board, but how it’s used can differ. Budget hotels and luxury hotels both calculate RevPAR, yet they interpret and supplement it differently:

• Budget Hotels: RevPAR for a budget property largely reflects how well it’s filling rooms at a given rate. Since ancillary revenues are minimal, RevPAR is a direct gauge of success. Budget operators tend to push occupancy and maintain competitive average daily rates (ADR) to maximise RevPAR. A high occupancy is critical – each empty room is lost revenue that can’t be made up elsewhere. For example, mid-market and budget hotels often aim for very high occupancy rates (e.g. 70–80% or more), whereas a luxury hotel might be satisfied with a bit lower occupancy if rates and spend are high. Budget brands also keep a close eye on ADR to ensure they’re driving volume without dropping rates too low. Additionally, cost-conscious metrics like Cost Per Occupied Room (CPOR) are key.

• Luxury Hotels: A luxury property also cares about RevPAR, but it’s just the beginning. Because a luxury hotel earns significant revenue beyond rooms (restaurants, bars, spa treatments, events, etc.), they look at Total RevPAR (TRevPAR) to get the full picture. TRevPAR includes all spending by guests, not just the room rate. Luxury hoteliers track this to see how well they’re monetizing each guest’s stay across all outlets. They also pay attention to GOPPAR (Gross Operating Profit per available room), which factors in expenses to gauge profitability. GOPPAR is especially useful for luxury hotels with high service levels (and thus higher costs) to ensure that strong revenues translate into actual profits. Moreover, luxury brands might analyse revenue per square meter of event space or outlet, and metrics like RevPASM/RevPASH (revenue per available space or seat hour in restaurants) to optimise every facet of the property’s revenue generation. They also look at guest-valued metrics – for example, tracking the total spend per guest (rooms + dining + spa, etc.) or the lifetime value of a loyal guest. These granular metrics are less relevant in a budget context but vital for luxury operators who want to maximize each guest’s value.

  
  

Focusing only on RevPAR can be misleading for a full-service hotel. A HotStats analysis illustrated a case where a hotel had a strong RevPAR of $200 with full occupancy, but guests spent little beyond the room; after accounting for costs, GOPPAR was only $50 – far lower than RevPAR suggested. The conclusion was as expected: ancillary revenue and cost control matter. Luxury hotels proactively drive upsells and manage expenses to avoid the “full house, empty wallet” scenario. By contrast, a budget hotel with limited extras might indeed equate high RevPAR directly with success, since there aren’t significant other revenues or costly services to factor in.

Luxury brands will also often measure TRevPAR and GOPPAR side by side to balance revenue growth with profitability, whereas a budget brand might be more straightforward: e.g. “Did we hit our occupancy and ADR targets this month, and did we keep expenses in line?” Mandarin Oriental Hotel Group, for instance, integrates data on guests’ F&B and other spending into unified profiles to understand and increase each guest’s total value. On the flip side, a super-budget chain like Premier Inn focuses on keeping rates low and volume high while minimizing customer acquisition cost, not even offering their rooms on OTA's.

Personalisation vs. Efficiency

While guest experience is central to both Luxury and Budget hotels, their needs and data points are defined very differently:

Luxury Hotels: These properties pour a lot of resources into guest preference tracking and personalisation. Every interaction is a data point – from the pillows a guest prefers to their favourite wine. Over time, luxury brands build rich guest profiles via CRM and CDP systems, so they can recognise and serve repeat guests in a highly individualised way. Four Seasons, for example, uses data analytics so that a frequent guest might arrive to find “their preferred type of pillow, favorite snacks, and even personalized room settings” already prepared. In practice, that could mean the room is set to 16°C because the guest likes it cool, almond milk for their coffee because they requested it last time, etc. This level of detail is possible only by capturing and acting on preference data. They also leverage guest profiles to personalise “everything from welcome amenities to in-room dining experiences”, a strategy that makes guests feel truly valued.

Luxury hotels also prioritise service quality and recovery data. They often track metrics like guest complaint resolution time and satisfaction scores. A hallmark of luxury service is a quick recovery when things go wrong. The Ritz-Carlton famously empowers employees to spend up to $2,000 per guest to immediately fix any service issue and “wow” the guest in the recovery. While that’s an extreme example, it highlights how seriously luxury brands treat service failures. Data on service lapses, guest feedback, and recovery outcomes feed into training and process changes. Luxury operators also monitor labor efficiency in a nuanced way: rather than simply minimising labor like we would see in budget segments or short stays, they aim for the right staff at the right time. They might analyse housekeeping hours per occupied room, concierge requests fulfilled, spa therapist utilisation, and more, to ensure each department runs efficiently without sacrificing service quality. Which is why we see KPIs in a housekeeping department include rooms cleaned per hour and cleanliness scores, while front office track check-in time and upgrade rates The goal is to fine-tune operations so that the guest experiences a seamless and attentive service. Luxury brands will even invest in systems to measure and improve these areas, creating a feedback loop of excellence.

Budget Hotels: A budget hotel’s focus is almost the exact opposite: they aim to maximise efficiency and automation, even if that means a more self-service experience for guests. These hotels prioritise data that helps streamline operations and reduce labor. For example, they measure check-in and check-out metrics keenly, e.g. what percentage of guests use self-service check-in kiosks or mobile check-in, and how long the average check-in takes. Short queues and quick check-ins are a selling point for limited-service hotels, so they gather data to spot bottlenecks. Budget properties also look at staff-to-room ratios and productivity stats. With far fewer employees on site, each staff member covers more ground. It’s not uncommon for a single employee to handle front desk, phones, and even some light cleaning at a small hotel overnight. As an industry benchmark, budget hotels might operate with under 1 employee per room (often much less) while a luxury hotel might have 2 or more employees per room. Management in budget hotels will monitor metrics like rooms cleaned per staff per shift, or guests served per employee, to ensure they’re hitting those lean targets.

Automation data is another focus. Many economy chains have introduced things like mobile keys or automated kiosks to handle tasks that used to require staff. They’ll track usage rates of these technologies, for instance, what percent of guests actually use the mobile key versus picking up a physical card, or how many check-ins are completed via the app. High adoption means they can potentially further reduce staffing or reallocate employees to other tasks. European budget brands are leading in this area: B&B Hotels advertises a “100% digital journey” for guests, including online check-in, self-service kiosks, and even an e-concierge app. That only shows that these hotels gather data at each digital touchpoint to gauge the effectiveness of their tech-driven service model. The emphasis is on consistency and speed over bespoke service. Guest preferences are still noted, as everyone wants a clean and quiet room, but you won’t find a detailed profile with pillow types in a budget hotel’s system. Instead, you might find statistics like average cleaning time per room, or the percentage of maintenance requests resolved within 1 hour. Operational metrics that speak to efficiency and quick turnover.

Tech Adoption and Data Maturity

These differences in focus naturally extend to the tech stack that hotels employ:

• Budget Segment Tech: Budget hotel chains often lean towards automation and cost-efficiency tools. They adopt technology that can either lower labor costs or optimise pricing automatically. Common examples include mobile check-in and check-out systems, keyless entry locks, automated revenue management software, and centralised property management systems that cover multiple hotels. The tech stack is usually lean and standardised across the brand. This keeps costs down and maintenance simple. A brand like easyHotel shows this clearly: they brought in an advanced revenue management system (Duetto) to algorithmically adjust prices, ensuring they remain ultra-competitive on room rates) and they emphasise a simple online booking experience. Recently adding online check-ins to their app. Many budget chains don’t invest in fancy on-property tech gadgets or bespoke analytics; instead, they might have a central BI at headquarters that aggregates the basic KPI's for all their hotels in one place. European budget chains are known for this pragmatic tech approach. Motel One (a German-based budget design hotel chain) operates with a centralised system and a 'no-frills approach' to on-site amenities. Their focus is providing a stylish room and good Wi-Fi at a great price. These brands tend to be fast followers in tech: if a new solution clearly reduces costs or improves efficiency, they’ll adopt it across all properties. But you won’t see them experimenting with unproven tech for the sake of innovation alone; the tech must drive a clear ROI. Which is often the reason that hospitality as a sector is slow to adopt new technologies. In terms of data maturity, budget hotels often rely on centralised reporting rather than large in-house analytics teams. The data they get is more aggregated and focused on operations and finances, not so much granular guest insights.

• Luxury Segment Tech: Luxury hotels, in contrast, invest in high-touch technology. Meaning tools that enhance personalisation, service delivery, and deep analysis. They typically have sophisticated CRM systems and sometimes custom-developed applications. For example, Mandarin Oriental built a new custom guest data platform and mobile app as part of its “Fans of M.O.” recognition program, consolidating data from bookings, spa visits, dining, etc., into one profile. This lets their staff see a guest’s preferences and history at a glance, enabling personalised service across all properties. The group’s new colleague-facing app gives employees real-time access to guest profiles and preferences, powered by that integrated data. Which only shows how luxury brands use tech to elevate the human touch. Similarly, Four Seasons has been at the forefront of using tech without losing its service focus. They introduced a Four Seasons app and chat service for guests, but deliberately kept it a hybrid, with real staff responding, not just AI, to maintain genuine service. However, behind the scenes, Four Seasons focussed heavily on analytics. The company has reportedly been optimising its CRM platform and using AI-driven personalisation to recommend amenities or experiences to guest. Luxury brands also deploy Business Intelligence tools to dissect performance data at a high level, they might have dashboards for segmentation of guests, market mix, sentiment analysis from guest feedback, etc. These hotels are often early adopters of new hospitality tech if it promises a better guest experience. Whether it’s experimenting with AI concierges, implementing smart room controls, or using data science to predict guest preferences, luxury hotels are generally more technologically and analytically mature, supported by larger IT and analytics budgets. Importantly, they tailor tech to augment the personal, luxury experience, not replace it. As Skift mentioned in one article, Four Seasons has “no plans to automate human interaction” – instead, it invests in tech elsewhere like analytics and CRM to support its service mission.

We see a clear pattern arise: budget hotels use tech to substitute or simplify labor, whereas luxury hotels use tech to empower staff and personalise service. One might install a kiosk so there’s no need for a concierge; where the other might install a cutting-edge CRM so the concierge has every bit of guest info at their fingertips. This contrast in tech adoption underscores how each segment’s business model drives its data strategy. Luxury pursues intimate customer knowledge, while budget pursues efficient, repeatable processes.

The Importance of a Tailored Data Strategy

As we’ve seen, budget and luxury hotels operate in different universes of guest expectations and service levels. So it’s only natural that their data strategies must be tailored to fit their segment. A KPI or tool that works for one can be useless for another. If a budget hotel tried to copy a luxury resort’s dashboard, it might obsess over metrics like spa revenue per guest or sentiment analysis that have little impact on its core business. Likewise, if a luxury hotel cut and paste a budget brand’s lean strategy, it might find itself under-investing in the very areas that create its superior guest experience.

The most successful hotel companies recognise that data strategy is not one-size-fits-all. They define what success means for their segment and choose metrics accordingly. Luxury brands focus on total guest value, personalisation, and quality, because those drive loyalty and premium rates. Budget brands focus on volume, efficiency, and simplicity, because those drive profitability in a low-margin model. Each segment can certainly learn from the other, but trying to copy set up of a different segment is a recipe for trouble.

Whether you’re an analyst or a hotel operator, the key takeaway is to tailor your data strategy to your product and audience. In hospitality, that means acknowledging the gulf between budget and luxury needs. Use the metrics that matter for your business model, invest in tech that aligns with your service, and don’t be distracted by industry buzzwords.