Do hotels need business intelligence? The immediate answer is no. Many hoteliers do not want to change and happily run their operations to satisfy owners and maintain profitability without changing how decisions are made.
NB: This is an article from Demand Calendar
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Unless there’s direct pressure from the owner to increase ROI or a desire from the hotelier to exceed current profit limits, business intelligence might seem unnecessary.
This blog is only for hoteliers who want to grow revenue and increase profits. Here are three reasons why adopting BI will actively help hoteliers grow revenue and profitability:
- Identifying the Most Profitable Guests: Leveraging data to pinpoint which guest segments drive higher revenue and deliver more substantial profit margins.
- Becoming More Future-Focused: Transitioning from a reactive, market-paced approach to proactive, forward-thinking strategies.
- Tracking Flowthrough to Increase Profit: Using real-time insights to optimize every aspect of operations, ensuring maximum financial performance.
For those who want to evolve beyond keeping pace with the market, a BI tool is necessary for strategic decision-making and sustainable growth.
Identifying Guest Segments
Data Quality and Collection
The foundation for any practical analysis is high-quality data. Identifying the most profitable guest segments without accurate, up-to-date data is impossible. Hotels are notoriously time-poor, and maintaining precise data in the PMS or other systems can be overwhelming. Often, hoteliers revert to relying on instincts because keeping data current seems too burdensome. Yet, by automating data collection processes and integrating systems, hotels can capture key variables such as the reason for travel, guest origin, booking channel, length of stay, booking window, and spending habits. The more detailed and accurate the data, the richer the analysis.
Segment Analysis
With robust data, the next step is to divide the guest base into distinct groups. Suppose the hotel has collected the reason for the visit, guest origin, booking channels, and spending patterns. In that case, these variables can be refined into micro-segments by cross-analyzing several variables, providing a granular view of guest behavior.
By establishing a strong data foundation and systematically analyzing guest segments, hotels can leverage business intelligence to move beyond instinct and drive targeted strategies that significantly enhance revenue and profitability.
Become More Future-Focused
Hoteliers who rely solely on reactive management miss the chance to stay ahead of market trends. Instead of waiting for challenges to manifest, a future-focused approach leverages business intelligence to anticipate changes and position the hotel for success.
Proactive Versus Reactive Management
Many hoteliers remain in a reactive mode simply because they are overwhelmed with day-to-day operational demands. They are so busy putting out fires and solving immediate issues that there is little time left for strategic planning. This approach addresses today’s problems today and tomorrow’s problems tomorrow. It is exhausting and also leaves little room for long-term growth.
Forecasting Trends
Business intelligence tools enable hoteliers to keep an up-to-date forecast to quickly determine seasonal demand fluctuations and broader market shifts. By analyzing historical data alongside real-time inputs, hotels can predict busy periods, adjust pricing strategies, and prepare for unexpected market changes.
Strategic Planning
With its forward-looking perspective, BI empowers hoteliers to allocate resources more efficiently. Whether optimizing staffing during peak seasons or launching targeted promotions during slower periods, strategic planning based on robust data ensures that every decision is aligned with future market conditions.
