DATA CAN GIVE HOTELIERS A COMPETITIVE ADVANTAGE (but do they know how to use it?)
“Data is the new oil” is the most clichéd comment we see in many presentations today. However, the reality is that few know how to grab this opportunity.
Hotels gather a huge amount of data on many aspects of the business. This data sits on different platforms, on different servers and in different formats. Trying to put it all together to make sense out of it is far beyond the capabilities of most hoteliers. But if this were possible, then the hotelier who used this would have a huge business advantage over the competition.
So, let me touch on some areas where hotels are collecting considerable amounts of data. Management teams often try to extract actionable intelligence from this data by asking relevant questions. I have tried to capture some of the questions below against each head. “The goal is to turn data into information, and information into insight.” — Carly Fiorina, former executive president and chair of Hewlett-Packard Co.
Property Management Systems: Most PMS have several modules which include Rooms, Housekeeping, F&B, Material Management, Finance, Stores, HR, etc. Each module can generate a wealth of business intelligence if it was possible to pull it all into a user-friendly dashboard.
Rooms: (All the below questions can help to price your offerings better. If you do not have this data, you are losing money in your pricing)
o What day of the week do I get the most bookings?
o What is my PACE against last year’s trend?
o What price do I input based on the above 2 questions?
o What is my ARR against last year, against room categories
o Which companies have shown a drop in bookings over the last 3 years? (I can then ask the next question — Why? And build an action plan with my sales teams accordingly)
o What is my forecast for a given period based on last 3 year trend?
· F&B:
o Outlet wise revenue, covers and APC against last year
o Outlet wise food cost over the last 3 years
o Menu analysis/engineering of top and bottom selling items
· Finance:
o GOP and EBITDA
o Trend of account receivables and aging
o Cash flow trends
o Trend of payables and aging
o Cost per occupied room
o Expired items and purchase trends
o Stock in hand and lead time measures for different items.
CRM systems such as Salesforce.com, etc:
· List of National accounts and frequency of visits by sales teams
· Productivity of National Accounts and 3-year trends
· Travel agent productivity and effectiveness of account managers
Brand Website: Google analytics
· How many customers are coming daily to my website? If there are cities generating low traffic, it might help our marketing teams to redirect expenditure.
· What pages are they looking at and at what point are they dropping out?(This is critical data to understand how effective your website is in generating business)
· Are my marketing programmes generating traffic and how is it impacting my sales funnel. (Marketing without lead generation has now been relegated to the middle ages, which is why print medium is struggling.)
· How many call-to-action buttons are being utilized? (It is surprising to see the number of websites with not a single CTA button)
· Where are the visitors coming from? Are we doing remarketing.
· Is there a sudden spike in visitors and is it because of a city event or a promo that was rolled out? Are our rates in line with the increased traffic?
· What is our conversion percentage and re-look at all points in the funnel for any shortcomings.
Customer satisfaction measurement systems — Medallia, QMS, etc
· How can we map our customer feedback to our loyalty programme and National accounts to evaluate our impact on a particular organization. (This can be an early warning system to gauge if a company may move away from our brand)
Loyalty Systems
· Which hotels are my members using to accumulate points?
· Which hotels are my members using to redeem points?
Global Distribution Systems
· RFP account booking trends last 3 years
· Travel agent booking trends last 3 years
· PACE
· Which promo or retail plan is being booked and why?
· If you are subscribed to 360, then how are you faring against the competition. If not, you are flying in the dark.
Online Travel Agents:
· Booking patterns for OTA VS hotel
· Rate trend for days of the week and room category
· PACE
· Yield for each booking
As you can see from the above sample list, each of the systems used collects immense data that, if properly analyzed, could offer insights into the business that will help people handling them to make better decisions to improve the business.
In the past, we had a few revenue management systems that entered India. However, they entered at price points that only the large chains could afford. Also, it required a level of training and manpower that was out of the reach of smaller hotels or hotel chains. They also focused more on the room aspect of the business and not on the F&B and cost aspect of the business.
Over the last few years, we are seeing attempts being made in India to develop products that address this huge opportunity to access this humongous amount of data and present it to managers in simple dashboards that permit quick decision making.
In 2014 Microsoft came out with a product called Power BI that, after several years of refinement, is able to import data live from all types of databases. While limited usage is free, the enterprise usage is not out of reach of small hotels. As their introduction says –” Power BI is a business analytics solution that lets you visualize your data and share insights across your organization, or embed them in your app or website. Connect to hundreds of data sources and bring your data to life with live dashboards and reports.” There are other similar BI products available in the market and one can choose the product most suited to your needs. The idea is to look at data holistically.
Since most hoteliers will not have the technical abilities to manage the software, there are companies in India that will do the data visualization for you. After that, it is just a few clicks away to slice and dice the data to get the insights one requires to drive the business.
What is interesting is that this approach of Power BI gives insights to the user in the front line. As usage goes up, more questions get asked and the user can query the database in natural language i.e: he does not need to know any programming language or machine language. Hence, it today’s world, the question you should ask yourself is: Do I need a Revenue Manager or a Data Analyst?
Another opportunity is for small to medium chain hotels (the larger chains are already using BI). A good BI tool has the ability to give the corporate office an insight into all aspects of the business at the hotel level. In many cases the corporate office has to depend only on reports sent by the hotel which can leave a big gap in managing the hotel at a micro level.
However, there is a catch. In order to utilize this data advantage, it needs a buy-in of the leadership of the company and a culture of looking closely at all data when taking decisions. If this is not driven from the top, no software will work. Have a look at this link to understand how to develop this culture and related challenges: https://hbr.org/2020/02/10-steps-to-creating-a-data-driven-culture
I would like to close with some quotes on the importance of a Data Driven Culture in any organization:
“If we have data, let’s look at data. If all we have are opinions, let’s go with mine.” — Jim Barksdale, former Netscape CEO
“Most of the world will make decisions by either guessing or using their gut. They will be either lucky or wrong.” — Suhail Doshi, chief executive officer, Mixpanel.
As someone once said “I am willing to change my mind on anything, as long as you can show me the data”
“Without big data analytics, companies are blind and deaf, wandering out onto the web like deer on a freeway.” — Geoffrey Moore, author and consultant.
“Things get done only if the data we gather can inform and inspire those in a position to make [a] difference.” — Mike Schmoker, former school administrator, English teacher and football coach, author.
“You can have data without information, but you cannot have information without data.” — Daniel Keys Moran, an American computer programmer and science fiction writer.
