Traditionally, hoteliers have approached operational and strategic management issues manually, relying primarily on experience and trying to figure out the best course of action for each department on their own. With the rapid development of technology in the hospitality industry and the upheaval of industry paradigms over the past couple of years, using the data at hand to manage more efficiently and profitably each area has become a major issue.
In fact, with the right management system (PMS), hoteliers can tactically leverage data to remain competitive, taking action in various operational areas, such as in facility planning and maintenance decisions, or concerning staff management.
Hospitality: data to reduce staff costs
To grasp the importance of these software just think that on average, labor costs represent about 50% of the budget of a hotel and are one of the most significant expenses. Overestimating or underestimating the number of staff needed for a period can have considerable consequences on revenue. Integrated facilities management systems, which, in turn, feed business intelligence into Revenue Management Systems, can mitigate these risks by providing managers with more accurate forecasts of occupancy rates, helping them make better staffing decisions during planning, and reducing the chances of misusing the available workforce.
With the right RMS for your facility, you can analyze your data, often from multiple channels, in a single platform and be guided in making strategic choices in revenue management, cost management and positioning.
Hospitality: data to make forecasts
The data available provides information in other areas as well, such as maintenance and inventory management. If occupancy is expected to increase, managers will be able to adjust supply orders and routine maintenance schedules accordingly, avoiding potential shortages and trying to mitigate issues that could negatively impact the guest experience.
Hospitality: data to define the offering
Another area of data use is related to rate management and revenue optimization. Choosing the right rate for all room types at all times to remain competitive while maximizing revenue is one of the most familiar dilemmas in revenue management. However, the data available to hoteliers can help them make more informed choices. For example, it’s critical to consider variables such as time of year and seasonality, occupancy rates and market trends. Unfortunately, few of the hotel revenue management technology solutions today offer dynamic pricing that is truly based on the use of artificial intelligence or machine learning algorithms for optimized room rate management. What we very often see is rate management implemented through the application of simple business rules.
Using AI algorithms allows you to calculate the best rate for a hotel room by extracting value from multiple data sources simultaneously. What makes dynamic pricing so attractive is its flexibility and ability to help the revenue manager make real-time data-driven pricing decisions, improving the overall performance of the property. In addition, the automation aspect frees hotel staff from having to manually adjust prices in a highly variable market, giving them time to focus on other, more human-focused tasks.
Hospitality: Data to build customer loyalty
Data can also provide insights into guest preferences and purchasing behaviours. Think of the opportunities to increase margins from up-selling, cross-selling and promotional offers. Concerning this, the third area where the use of data is critical in hospitality can be identified: marketing. Basing marketing investments on data makes it possible to improve knowledge of the client, adapt communications according to the interlocutor, and optimize offers for customer clusters, building relationships of trust by understanding and anticipating their needs.
For example, the date and time of the booking provide important information about when you are most likely to influence the potential client’s decision. Or in the days after booking, but before arrival, campaigns can be carried out to encourage the client to purchase additional services or aimed at upselling. Once the stay is over, requesting participation in surveys or writing a review in exchange for promotional offers can increase consumer loyalty and obtain valuable feedback for the company.
Hospitality: Data as the standard
With the right data and a strategic vision, hoteliers can leverage the information assets at their disposal to not only improve their day-to-day operations but also set a new standard for the industry. Globally, trends point to the need for a greater ability to leverage advanced digital platforms, benefit from predictive tools and optimize pricing based on the variable being maximized.
To move from data collection to the insights derived from it (and ultimately to business decisions), raw data undergo a series of steps before it becomes truly actionable. The process begins with gaining access to different data sources, making connections with them, and standardizing the structure of the available information. Then, data preparation, exploratory analysis and visualization will follow. Finally, it is necessary to automatically update these data and related calculations, through procedures capable of functioning stably in a production environment.
Hospitality: Data in real-time and in integrated systems
A property management tool (PSM), linked to a revenue management system that distributes optimized prices on the various sales channels, for example through a channel manager or a GDS, are now necessary tools to allow any type of hotel structure to be on the market, starting from structures with a few rooms, up to large groups of hotels. The performance of these tools depends on many variables: for example, the PMS must be functional to the operational and management activities and linked to the daily routine of the various areas of a structure; while the effectiveness of an RMS depends on the level of accuracy and complexity of the calculation models used, the goodness of the forecasts that can be made and the estimated margin of error.
Therefore, setting the operational and strategic management of a hotel on these tools allows to improve the performance of the individual areas involved and also allows to allocate the available human resources more functionally. However, to achieve this, individual technology providers must be able to adapt to the existing IT infrastructure without disrupting it, to communicate quickly and efficiently with each other, and to be flexible enough to meet the specific needs of the individual company.