Data in the Hotel Industry – All a Matter of Perspective

Data in the Hotel Industry – All a Matter of Perspective

Data in the Hotel Industry – All a Matter of Perspective

I was honored to join the management team from CVENT a few weeks ago during their CONNECT 2017 conference.

Christine Lawson, SVP of Sales for Loews Hotels, Brad Kent, CMO of the Dallas Convention and Visitors Bureau and Don Kelly, SVP at CVENT, and I delivered a keynote presentation called “The Power of Transformative Insights.”

 

CVT-CONNECT-2017-Keynote-Presentation111.pdf (33 downloads)

 

In a breakout session, Don Kelly and I also presented  “Confessions of Data Scientist” to CVENTs’ top customers who were part of the conferences Leadership Track.

The key themes that emerged from both sessions were:

1. Don’t get mad at the player – change the game.

Leaders in all divisions of a hotel are overwhelmed with data and have little time and few resources to put new insights into action.  This is the main reason the promise of “Big Data” is mostly hype.

Changing what’s measured will promote better alignment between all areas of a hotel organization, thus producing better financial performance.  These changes must come from the C Suite.

For example, look at the retail industry that is dealing with massive change in consumer behavior.  Why is Same Store Sales still their governing success metric?  Why not something far more reflective of future strategies like Revenue Per Customer?

For the hotel industry, similarly, why is Revenue Per Available Room , a real estate-centric measure, the industry standard? In an age when the battle for the consumer defines value (high public market capitalizations of the OTAs, asset light business model of big chains), our industry should similarly embrace Revenue Per Customer.  In my portion of the Keynote, I showed some eye-opening data on which big hotel group does the best job monetizing customers in their loyalty program.

2. Leaders must ask the question, then find the answer.

Data is best when pursued, not received.

Observing data itself will not produce insights yielding new actions.  Rather, leaders across all areas of a hotel, have the responsibility to actively pursue simple answers to simple questions – using data as an input.  Examples of these types of questions are:

  • Which revenue channel is the most profitable and what do the customers look like who produce the most revenue in that channel?
  • If the hotel received 10% more in group room revenue on the top and bottom 10% patterns every year, how much incremental operating profit would that create?

Then, once answered, the questions behind these questions will show what types of new data are required to deliver the benefits.  Questions like – how do we get more revenue from the most loyal customers in our most profitable channel?  How much should we spend to acquire new customers who “look like” those most profitable customers?  What types of group business should we pursue to get 10% more in rooms revenue from our most productive pattern?

Here is a good example for a product we helped innovate with our partners at IDeaS which answers simple questions for revenue managers and marketers.

http://ideas.com/nsight

nSight-for-IDeaS-Webinar-Deck-2-Minute-ROI-V2PDF.pdf (25 downloads)

 

 

Rich Maradik is founder and CEO of nSight for Travel, a leader in helping hotel Revenue Management and Marketing organizations improve profitability from transient customers.