BI for Hospitality
Success in the increasingly competitive hospitality industry is dependent on prompt knowledge of what’s going on in the operation. The need to know customer information: who they are, what they buy, and how likely they are to come back again, can be elusive. Additionally, the time-sensitive nature of business metrics makes it difficult to answer certain questions such as: What are daily sales results on an individual property? What are the average expense per day? What are labor costs? What is the daily cash position? The sheer volume and time-sensitive nature of events in the hospitality industry can be overwhelming. Hence information becomes the essential ingredient to success in the hospitality industry.
A Business Intelligence solution enables analysis by exception and gives decision-makers of multi-location organizations a robust way to decipher and analyze information gathered at each level. BI tool helps aggregate, process and visualize data from disparate sources, multiple applications, allows decision-makers to quickly identify and address trends or potential problems. BI enables decision-makers to move from speculative decision-making to fact-based decision-making based on knowledge.
Business intelligence is simply the people, processes, and technologies that turn data into information. It is the key strategic opportunity for successful hospitality corporations.
Information Challenges in Hospitality Industry:
- Enormous amounts of data in multiple, disparate systems makes single enterprise wide view becomes challenge
- Revenue management is dynamic and constantly changing resulting complexity in pricing optimization and forecasting strategies
- Tremendous challenge in meeting customers’ expectations and preferences due to constant pressure of capturing, analyzing, and creating the right message / offer using the right medium and at the right time
Why BI:
- Essential tool for protecting market share
- Identifying unproductive rate strategies
- Uncovering new revenue opportunities
- Beat the competition
- Dynamic MIS & ad-hoc Reports to understand your current market position
- Illuminate future performance trends
- Compile detailed picture of competitive environment (who is traveling & from where)
Benefits of BI:
- Profile Guest & Business Segments by any combination of criteria. Break out, analyze and compare these segments on demographics, stay patterns, etc.
- Identify your best guests & uncover those with the highest potential for additional nights or services
- Perform Drill Down & Side-By-Side Analysis or filter on any variable with no limitations to “dimensions” and no cubes to rebuild
- Compare alternative target segments or multiple characteristics side-by-side, even if they overlap
- Track Performance across time: Guests, Return Rate, Length of Stay, Frequency, Recency, Room Rate, upgrades, etc. Track by: Division, Product Line, Guest
Segment, Booking Source/Channel, Geography/Property…any variable on file
- Identify Challenges & Opportunities to quickly spot where your business or guest segments are excelling or under-performing. Monitor changes and easily drill down to see the factors driving this performance
- Access Executive Dashboards tailored for at-a-glance & measuring performance, right at the fingertips of managers across your organization
Application of BI in Hospitality:
- Across the industry: From hotel and revenue management, point of sale systems to regulatory agencies, asset managers, credit card and mortgage companies
- Throughout the enterprise: Front, middle, and back office operations including hotel revenue management, POS, and CMS systems
- Via various applications: Revenue management, patron worth and profitability, guest satisfaction, market analytics, customer segmentation, campaign management
Increase efficiency, enhance revenue, retain customers, consolidate businesses, improve productivity, lower operating costs
- Operations Analysis: Manage revenue and understand price optimization trending & analyze room maintenance and inventory allocation, food, and beverage controls
- Financial Analysis: Determine long term value of customer segments & track performance of venues such as room bookings, dining, entertainment, and retail outlets, to determine the percentage contribution to total revenue
- Marketing Analysis: Offer products and services that match customer preferences, target different cross-sell and up-sell offers based on prior purchase behavior & determine reinvestment levels & offer benefits according to customer value and profit
BI Usage: BI can be used in many areas like discounting to respond to market conditions instead of blindly following panic rate cuts. For example, in corporate business, will reducing a rate result in increased room nights? Or will it simply dilute revenue? Does the company have the volume to offset the rate decrease? Other areas could be:
- Analyze hotel’s arrival patterns
- Look at the bookings history for the travel agents including information on booking sources, rates, and length-of-stay patterns
- Use the length-of-stay pattern information to understand any negative effects that minimum length-of-stay restrictions may be having on your business
- Mine the agencies that have highest room night volume or analyze dealers who have provided no reservations to your specific property
- Consider day-of-week (DOW) patterns & drill down to understand weekend-only stays, peak nights, lowest days, weekday stays, and arrivals
- Monitor future patterns & pace, which lets you understand the impact of current revenue management strategies on future bookings and measure the effectiveness of pricing changes on market share
BI empowers organizations in Hospitality industry to:
- Increase Revenue per available room (RevPAR) and customer profitability
- Measure and predict guest lifetime value
- Understand guest behavior, trends and travel needs
- Increase share of wallet for loyalty members
- Accurately forecast group & transient demand & establish rate and availability controls
- Develop price optimization models
- Optimize usage and scheduling of resources
Advantages of using a BI in Hospitality Industry:
- Monitor performance with different criteria
- Identify and get insights into weaker units for corrective measures
- Analyze data by time, product, category, region and unit
- Help design special promotion campaign and evaluate performance output
- Cultivate loyalty amongst customer by analyzing customer behaviors and developing customer profiling
- Identify potential properties for acquisition
- Self-served ad hoc querying and business intelligence reporting tool for end users to assess their role in success
- Top management can consolidate data from different spheres of the globe and get a single and simple view of complex financial metrics
Who gets What?
- Property GMs receive audited performance data & employee details once a day
- Regional controllers may have a customized daily scheduled reports emailed
- Revenue managers get weekly property performance data
- Investors can opt to receive property or entity performance everyday by e-mail
- Asset managers can have property-group flash, labor data and P/L output delivered in the form of a color coded KPIs in their dashboard daily
Oraganizations in Hospitality can generate value from BI by:
- Eliminating Manual Spreadsheets: Do not depend on plethora of spreadsheets that are manually managed by different functional areas of your company. Additionally, the proliferation of these spreadsheets leads to multiple versions of key indicators. Pre-deliver standard reports with 1KEY, automating the process & ensuring accuracy of the data for a measurable decrease in cost & increase in productivity
- Remove Resource Constraints in IT: Customized reports and data exports from one or multiple systems drains the resources of your IT department, and it can result in a waiting game as IT prioritizes which requests to fulfill. In contrast, 1KEY Cube puts the data directly in the hands of the user, allowing each department to create made-to-order reports without the assistance of IT
- Provide Complex Reports for Ad-hoc Analytics: For most organizations, predicting customer attrition or revenue is a process of single dimensional reporting, internal knowledge and gut business instinct. With 1KEY, you can make an informed management decision and know how to maximize revenue and enhance guest services
Benefits of BI for Hospitality:
- Save Time by staying connected to businesses & reduce the time to action by spending less time gathering information and more time on improving performances
- Enhance Communication by providing 360 degree insight into operation & share data across the organization. Improve speed & quality of decision-making, enabling rapid delivery of intelligent, relevant information to key decision-makers in organization
- Quickly and easily identify strengths or weaknesses and make proactive and better business decisions
- Grow the Top and Bottom Line with tighter control of KPI that shall enable the operation to decrease costs and increase revenue
- Improve Operations and business processes related to revenue generation, customer satisfaction/retention, cross-selling opportunities, room inventory management and new market opportunities
Posted on February 1st, 2010 by Vikram Kole
Filed under: Business Intelligence
Really , Business Intelligence (BI) has many advantages in Hospitality industry like:
-Monitor performance with different criteria.
-Identify and get insights into weaker units for corrective measures.
-Analyse data by time, product, category, region and unit.
-Help design special promotion campaign and evaluate performance output.
-Cultivate loyalty amongst customer by analysing customer behaviours and developing customer profiling supported by special benefit programs
A nice article on Business Intelligence (BI) for Hospitality.
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