Executive Summary

This report analyzes how the data mining can be implemented in the hospitality industry and some of the limitations and challenges the hospitality industry needs to face. More and More Company Start Using Data Mining Nowadays the number of companies which implement data mining concepts in their businesses has been increasing. Data mining helps a company to gain deeper understanding about both potential and existing consumers, to formulate business strategy accordingly, and to achieve competitive parity or competitive advantage over its rivals in the competitive market. In this report, Harrahs Hotel is a good real life example of how data mining can be effectively implemented in different business segments. By systematically designing and implementing data mining technology called WINet in companys operations, Harrahs Hotel managed to obtain meaningful knowledge of consumers and outperform other competitors in hospitality industry. How to Implement Data Mining Implementing data mining in business is not as difficult as expected. There are four major data mining applications being discussed in this report: Classification, Clustering, Deviation Detection, and Forecasting. These four applications are playing important roles in forming a feasible and effective data mining system. They serve as a main guidance to develop subsequent data mining elements in the whole conceptual tree of data mining. Company is recommended to employ these applications in the process of designing a data mining system. The following data mining techniques are discussed in this report: 1. Customer Information Retrieval and Micromarketing 2. Automatic design of websites and updating of webpages 3. Email Filtering, Email Customer Service, and Inquiry Routing All of these three techniques can help the company to attract potential customers and increase satisfactory level of existing customers. Company is recommended to employ professional personnel to implement these data mining techniques and applications in business operations. Some of the Limitations and Challenges There are some limitations and challenges that can interrupt the companys development of data mining in business. Company is recommended to emphasize on these limitations and challenges seriously to avoid any negative factors that can adversely affect the companys performance. The following problems are discussed in this report:

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Data mining analyzes only data collected from existing customers. Databases used in the data mining are often hotel-brand specific. Data mining may not segment customers by psychological traits. Data mining does not provide information about customers thought processes. Data mining has privacy issues. Conclusion

Data mining technology can be a useful tool for hospitality companies that want to understand and predict consumers behavior. Companies can make well-informed marketing decisions including who should be contacted, to whom to offer incentives, and what type of relationship to establish. If a company successfully overcomes the limitations and challenges in implementing data mining in the business, there is a high possibility that the company will be performing well in the hospitality industry.