Business Intelligence for Small Hotels: 3 Ways They Can Capitalize

Author: Drew C Brucker

Exponential pace.

That phrase can be used to describe the growth and diversification of the hotel industry.

Even though the market tends to focus on larger brands and the OTAs, small properties make up a very important segment.

Smaller hotels have to be especially creative in order to stay competitive.

In an era of online sales, last minute bookings, and meta search engines on the consumer side, how can smaller and/or independent hotels stay competitive even when resources are tight? 

Independent property managers have to be comfortable in a variety of roles.

Hotel chains and large properties may have the ability to hire a dedicated revenue manager, a data analyst, or even an entire team devoted to the creation, management, and analysis of custom reports.

Since independent properties often lack the budget for additional staffing, revenue management tends to get slopped on an existing employee’s plate. That person is forced to ramp up as quickly as possible, all while maintaining their heap of existing duties.

At best, this solution is inefficient. At worst, it’s overwhelming. 

Smaller properties inherently face issues of size when it comes to two extremely valuable resources: available staff and available capital. They may not have a revenue management system in place at all, much less an expert to oversee the program.



The dangers are obvious. Not having a revenue management system in place means missed profit potential, which easily transcends the initial investment in a high quality software solution.

Luckily there are ways that independent properties can use business intelligence (BI) to maximize their profitability.

This article will examine how smaller properties can leverage BI via their revenue management systems to compete with the giants.


Business Intelligence (BI): Don’t Just Analyze the Past, Predict the Future


At the most basic form, business intelligence systems give property management the ability to collate, and analyze internal/external sources of data to better understand where opportunities exist for increased revenue.

An independent property’s internal systems (point of sale, reservations, food and beverage, and so on) are fantastic ways of seeing where the property’s revenue generation has been. But they lack the ability to trace it’s ultimate destination.

It’s also not likely that a small property would have the staff necessary to generate custom reporting that could forecast its revenue outlook. 

Smaller properties would be wise to implement a revenue management system (RMS), which has customizable BI capabilities for their unique market. Their software could then pinpoint strategic areas of opportunity as well as comp set weaknesses.



Business Intelligence (BI) Identifies Points of Value


Profit margins are getting tighter. At least for right now.

Shrinking margins suggest that it’s a challenge for the independents to find ways to beat larger competitors on price.

While independents may not be able to beat room rates by a sufficient amount, there are other areas where maximizing value to their potential guests is possible.

By analyzing costs of auxiliary revenue segments at surrounding properties, BI can identify key areas where independent hotels beat their competitor’s prices.

Many travelers report feeling frustrated by additional charges for what they consider basic amenities. 

For example, most large properties will charge for parking and in-room WiFi. Small hotels typically offer the same amenities free of charge.

By strategically crafting their brand messaging to highlight advantages like these, they will win potential guests.




Smaller Means Agile


If a property isn’t looking at the right metrics, they might as well be throwing it into the recycling bin or giving it to Goodwill. Someone else will get take that revenue.

The hospitality industry is changing so rapidly that forecasts should be updated almost daily to reflect new metrics and factors. 

Multiple new segments and metrics need to be integrated into existing RMS, which makes keeping up incredibly hard. 

The saying about how a large ship is harder to turn could certainly apply to how difficult it is for corporate chains to overhaul their existing systems.

Smaller hotels can implement top of the line solutions faster, and with more agility and efficiency than larger locations. 

Without having to navigate multiple levels of bureaucracy, decision makers for small properties can implement new systems and test their BI enabled systems with ease - staying on top of evolving markets

Rather than focusing on the inherent challenges of smaller brands, they can instead start to look at how they’ll be able to differentiate themselves and even outpace the big chains.

What BI-based solutions does your small property depend on to be competitive?

What would make your reporting and analysis even easier?


7 Point Hospitality Revenue Management Effectiveness Checklist

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