Leading luxury hotel companies are instilling the importance of leveraging data to make smarter decisions by implementing a holistic data strategy that permeates decision-making across the entire organization.
Data has never been more important to the success of the luxury hotel business, and the time is now to put data at the center of your operations. When you start to build a culture centered around quick access to information for easy analysis, every team member across your organization is better equipped to make the right decisions for your business.
By now, you’ve built a revenue team and perhaps a team dedicated to data analysis. These teams should be applauded for holding rate during some tough years, and then leading the industry’s rebound. Now, it’s time to equip your teams with the necessary tools to truly capitalize on the data available across all departments.
Start by instilling in each of your teams the importance of leveraging data to make smarter decisions. Point to a clear end goal of implementing a holistic data strategy that permeates decision-making across the entire organization.
Here are a few ways you can leverage business intelligence tools across various departments of your luxury hotel organization.
BI in the Revenue Department
large majority of hotels have already adopted some sort of dynamic pricing for their rooms. The next evolution of revenue management is moving beyond rooms, and many luxury hotel companies have adopted total revenue management strategies for a more holistic approach.
The key here is the increasing reliance on data-driven decisions. By analyzing the ever-growing number of datasets available, you’ll gain insights into guest preferences, booking patterns, and market trends. This allows you to optimize pricing strategies, personalize marketing efforts, and enhance the overall guest experience across all touchpoints in your hotels.
While top-line metrics like RevPAR remain widely used benchmarking measurements, there’s been a collective push from luxury hoteliers over the past few years to standardize the use of bottom-line metrics, such as like Gross Operating Profit Per Available Room (GOPPAR), that more accurately portray the health of a hospitality business.
Improved access to ancillary profit data from other departments – food and beverage, spa, conference and event centers, etc. – can be used to build a holistic approach to profit management.
BI in the Operations Department
Often overlooked when discussing the advantage of business intelligence is the effect it can have on more efficient operations.
With access to the right data, hoteliers can optimize staffing levels by analyzing historical occupancy data to predict peak times and adjusting staffing levels accordingly. Leadership can monitor individual and team productivity metrics to identify areas for improvement and recognize high-performing employee efforts.
Business intelligence allows hotels to align staffing levels with customer service requirements and ensure that adequate staff is available to provide excellent customer service during peak times.
During the recent ILHA INSPIRE Conference, Jason Bass, Director of Culture and Programming at the Thompson Buckhead in Atlanta, said he’s increasingly looking to technology as a resource to help team members have a bigger impact on both guests and operations.
“As an industry, we’ve traditionally been very customer centered, but not employee centered,” he said. “We wouldn’t let a guest take three steps to do anything, yet we let our employees take 12 steps to build a report.”
BI in the F&B Department
One area that is ripe for innovation is F&B revenue management, and hotels are adopting the same principles and techniques that apply to room revenue management in their various F&B outlets, including full-service restaurants, bars, coffee shops, and grab-and-go marketplaces. F&B revenue management techniques largely focus on dynamic pricing, or adjusting the prices of menu items based on customer demand; and menu engineering, or adjusting the menu offerings to maximize profits.
For example, at Sea Island Resort on St. Simon’s Island off the coast of Georgia, home to 12 full-service and three quick-service restaurants, Executive Chef Daniel Zeal uses business intelligence tools to ensure Sea Island’s 15 F&B outlets run with the highest profit margins possible.
Zeal keeps a running Profit & Loss report every day on each of the outlets, ingesting labor costs and food costs from various systems automatically. Sea Island leadership is able to monitor everything from revenues to quantity of items sold, all the way down to the individual check. Zeal and his team can see items sold by outlet, by meal period and by server. Thanks to investment in the right resources, Sea Island is driving profitability through business intelligence in the F&B department.
Business Intelligence at Scale
Building your hotel businesses around data is crucial because data provides valuable insights that can inform strategic decisions. By analyzing customer preferences, market trends, and operational performance, hotel companies can make informed choices that contribute to overall success.
Data-driven insights also help in optimizing operational processes, from inventory management to staffing levels, to streamline operations, reduce costs, and improve overall efficiency.
Luxury hotel companies that leverage data effectively gain a competitive edge, allowing them to stay ahead of the competition and adapt quickly to changing market dynamics.