A study of 170 travel and hospitality executives revealed an area where their organizations were lacking was effective use of data. It can be overwhelming to package all the metrics you collect into actionable insights that truly benefit your business. But with the right systems in place, your data can become a key pillar for identifying patterns and trends in your business – helping you not only recognize and expand upon positive directions, but providing the ability to course correct when necessary toward more lucrative opportunities.
It Starts with Demand
Your business hinges upon your ability to clearly understand and anticipate demand. By statistical analysis of past and present data, local and worldwide economic conditions, seasonal factors, events, and consumer behavior, you’ll begin to paint a picture of your hotel’s “unconstrained” demand – the number of bookings that might occur if your hotel had an infinite number of rooms available. Over time, a solid grasp of trends in your unconstrained demand helps you develop more accurate forecasts, and optimize your business mix, distribution channels, and pricing. In short, it’s crucial for improving your overall business success.
Tracking Trends Helps Optimize Business & Channel Mixes
Deep analysis of your demand trends helps you manage segmentation and identify those segments with higher daily spend values. Understanding these segments allows you to focus your time and resources where they’ll have the biggest impact on your profitability. Tracking quality demand data and advanced analytics also help you optimize your distribution channel performance by determining which channels are producing the greatest revenues for your hotel.
Tracking Trends Helps Improve Forecasting
Relying on your intuition, or even educated guesses based upon your experience, does not make for the most accurate revenue management forecasting. By keeping detailed records of historical data and monitoring trends, you can accurately project into the future and maximize your hotel’s profitability.
Pricing: Let the peaks and valleys of your demand by market segment guide your pricing strategy. Hotels that accurately predict demand and seasonal events affecting occupancy can yield rates in ways that consistently fill rooms at the highest possible prices. Take a hotel located in a popular tourist destination which sees spikes in unconstrained demand from January through March. Knowledge of this increase in competition for hotel rooms allows the hotel to boost rates to take full advantage of the anticipated influx of customers.
Marketing: Business travelers may prioritize reliable, high-speed internet, while a family may seek child-friendly amenities and spacious accommodations. The path of data “breadcrumbs” left by guests through each stage of the booking process helps you identify patterns in customer shopping behavior which you can use to tailor your future marketing efforts. Track trends in transactional activity, use of loyalty programs, and customer feedback to launch relevant promotions most likely to convert.
Groups: Trend data and a cutting-edge revenue management system (RMS) allows hoteliers to identify the optimal mix of transient and group business as well. Moreover, an RMS with the capability of forecasting group business helps hoteliers better optimize transient pricing by factoring in both transient and group displacement – potentially experiencing a 2 to 3 percent lift in group revenues depending on group volume.
Your trends are not going to appear overnight. Identifying them requires time. Patient tracking and analysis of data specific to your hotel. And while it’s always beneficial to be aware of what your competition is doing, don’t let that cause you to take your eye off the ball. Track your data, put your plan and the right systems in place, then patiently wait for your results to pan out.
Want to learn more about Leveraging Business Intelligence to Improve Hotel Performance? Download the eBook!