Data Economics

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YDC Data Monetization Index for Hotels and Resorts

February 25, 2022

Summary

Hotels and Resorts companies have a Data Monetization Index (DMI) in the range of 26.06% to 122.43% with an average of 70.63%. The DMI calculation for hotels like Hilton, Marriott, Intercontinental hotels is based exclusively on the data valuation of their respective loyalty customer data and relies on publicly-available data sources only. 

A higher DMI is generally preferable across companies and industries. By way of reference, internet companies have a higher DMI because most of their enterprise value is derived from data. For example, Google’s DMI is 93 percent because it generates most of its revenues from advertising based on user interaction data.

Data Monetization Index (DMI)

The YDC team recently published a DMI for major hotel & resort companies in the United States (see Table 1). The data valuation for Hilton, Marriott and InterContinental hotels includes the valuation of their more than 103 million, 120 million and 100 million loyalty members respectively.

The DMI is the value of a company’s data relative to Enterprise Value. Enterprise Value is a key metric used in the investment community and is calculated as equity value plus long-term debt minus cash. The Loyalty Data Valuation methodology uses Customer Lifetime Value (CLV), customer counts, loyalty membership, revenues, gross margin, average daily rate, visit frequency, churn rate, customer tenure and discount rates from publicly-available data sources only. 

CompanyEnterprise ValueData ValuationDMI
Hilton Worldwide Holdings Inc.$50,330,000,000$30,666,551,70560.93%
Marriott International, Inc.$66,920,000,000$48,928,401,88373.11%
InterContinental Hotels Group PLC$14,920,000,000$18,266,178,420122.43%
Airbnb, Inc.$92,640,000,000$24,139,305,82026.06%
Table 1: DMI for Hilton, Marriott, InterContinental Hotels and Airbnb

Based on our analysis, the DMI for InterContinental Hotels is over 100% indicating that the value of the company’s data is higher than its Enterprise Value. We believe that InterContinental Hotels has an untapped data value of $8.2 billion (see Table 2). 

Average DMI for Hilton and Marriott67.02%
DMI for InterContinental Hotels122.43%
Difference between Average DMI and DMI for InterContinental Hotels (B – A)55.40%
Enterprise Value for InterContinental Hotels$14,920,000,000
Untapped Data Value for InterContinental Hotels (C x D)$8,266,367,276
Table 2: Untapped Data Value for InterContinental Hotels

Obviously, a number of factors will impact these estimates including a more precise calculation of Customer Lifetime Value (CLV), loyalty membership, and the companies’ stance on data privacy.

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