Analytic Reporting Tools – Recommendations for championing the adoption of BI tools across a Hotel Chain using a Benchmarking tool as an example
Written by Sonja Woodman, Independent Travel Tech Writer
Contributors include: Ana Cachón Sánchez, NH Hotel Group
In today’s competitive accommodation market, business intelligence (BI) using real-time data is increasingly important for hoteliers to make pricing, distribution and revenue management decisions. But which tools to use and how to successfully implement them across a hotel group can be challenging. Ultimately they must deliver value to both corporate HQs and individual property managers.
An example of a BI tool benefitting management at both head office and at the individual property is benchmarking a competitive data set. There are a number of well-known product vendors introduced in this article. For this best practice blog, the HEDNA Analytics Working Group spoke to Ana Cachón Sánchez, GDS Sales and Distribution Manager at NH Hotel Group. Ana gave us a helpful overview of the value that benchmarking delivers to the NH Group and how the corporate team support the hotels’ adoption and its use.
Here, we explore some best practice approaches in how the Corporate HQ can help and support individual property managers deploy a competitive benchmarking tool and ensure that they derive long-term value from it. Although this blog focuses on a benchmarking platform, the basic processes for BI adoption and rollout can be applied to other group wide platform implementations, such as revenue management or API traffic analytics.
Benchmarking – An important and typical BI tool for hotels of all sizes
Benchmarking against a competitive set of KPIs, arms hoteliers with an accurate perspective on local market trends and prices. This is especially crucial in cities or popular resorts, where the traveller has many choices and competition is stiff. Information on what rates competitors down the road are using and also which agents are booking them, is essential for hotel managers to effectively manage their own pricing, promotion and channels strategy to maximise their revenue opportunities.
When a hotel belongs to a chain, the Hotel Manager benefits from a range of group wide assets and functions such as brand, reservation system, sales & marketing support, financial support and much more. The chain HQ largely takes responsibility for group-wide systems, such as the investment in business intelligence.
At the property level, local management retains full executive responsibility for the Hotel including financial profitability. This means they take the operational decisions to maximise revenue of an effective inventory and pricing strategy based on demand and competitor analysis. Corporate HQ and property work together to have the right platforms to get the best results.
Hotels, whether part of a chain or independent, are constantly refining pricing strategies to manage the different market segments, seasons and situations facing occupancy levels. Chain HQs tend to set the guidelines for their hotels in terms of pricing structure for the various segments they target (business, leisure, groups). The dynamic nature of demand and availability means room rates need frequent adjustment to get the optimum price per room.
This adjustment is determined by historical data combined with forward looking insights, especially from benchmarking some key competitor performance metrics.
Forward-looking demand data is the actual future reservation data for your hotel compared to aggregated data from a set of your top competing hotels, known as a competitive set. This helps the distribution manager answer many crucial questions such as:
- How does your occupancy compare with the competition?
- Which days of the week best yield revenue?
- From which channels are your competitors getting their bookings?
- How are changing market conditions affecting your performance?
One of the great benefits of benchmarking comes in identifying gaps in your market and opportunities for improvement. Once answered, the distribution manager can begin shaping their marketing, pricing and operational strategies to ensure they are optimized for success. These small tweaks to business processes could lead to sizeable strategic improvements. Understanding the demand patterns in terms of forward booking pace and length of stay is crucial in managing demand against available capacity. A more accurate picture of length of stay demand enables improved pricing and availability decisions to drive revenue enhancement.
Getting BI rolled out and into the right hands.
Evaluating, recommending and supporting third party business intelligence tools such as the benchmarking tool described above is usually conducted by key stakeholders at corporate HQ. Pricing for such a tool is generally negotiated at corporate level, although paid for out of local hotel budgets. Most third party systems and tools rely on an in-house advocate who champions the use of the tool or platform across the Hotel Group. Hotel Managers, even when they are part of a Chain, retain autonomy when it comes to deciding whether to invest in the deployment of an analytics tool or not. In most cases benchmarking is seen as an essential BI tool, but the ROI case needs to stand up.
Here are some Best Practice approaches Chain HQ can take to encourage adoption of a typical BI platform such as benchmarking, so that the property and the Chain benefit from the insights. When rolling out a BI platform, it is important to recognise that organisations are unique, so even when they have some similarities the advice and recommendations offered here should be tailored to their plans for the future.
- Product evaluation and selection
A chain corporate office takes responsibility for evaluating products and selecting them for roll-out to their individual hotels. A subject matter expert should be appointed as the person within the hotel group with responsibility for developing and managing the relationship with the hospitality vendor. This person has ownership for rolling out the solution to individual properties and liaises with the appropriate teams at property level for implementation, training and general support.
- Convince the property team to adopt the tool
Once the decision to adopt the analytics tool is made, the benefits of the tool needs to be explained and its use integrated into the hotel group’s operations. The Group executive should explain the reasons for its adoption such as the expected ROI, the efficiencies predicted to be gained and any other rationale that will help the property team understand the need for the software implementation. If Head Office sees value in a solution, and can demonstrate this value in other properties, then this should be shared and effectively communicated.
- Right resources for implementation
Although most tools, especially the benchmarking ones, are cloud based and accessed via a browser, some tools require adjustments to fit an existing environment. Having the local team involved can help work through what is needed to occur for the software to work with the current operation. Whether it’s an integration with other software systems used in the business or whether a custom feature development is needed, time needs to be allocated to the implementation and subsequent deployment.Choosing the right tool to roll out chain wide, is only part of the story. How it is implemented can also impact adoption and should focus on the end-user.It is useful to design a project implementation template that can be rolled out from property to property while ensuring local needs and market conditions are accommodated. A template helps make the implementation efficient and consistent across the Group.
- Training to maximise tool value
Training the users is key to ensuring that the adoption of a new tool is sustained. There are a number of approaches. A primary user of the system can be trained by the vendor. That person becomes the expert or “Power User” and then trains others in the company or property as needed. Or the vendor can train everyone involved it its use in the same session. Most companies also have extensive training documentation available for use as reference. The head office executive should monitor system usage and can arrange additional training as required or as new staff join.
- Driving adoption and sustained Use
To ensure the best value from use of the tool is derived for the property and for the Hotel Chain, the executive should work with the local team to drive adoption through
- Awareness—they are aware of the product and its features.
- Understanding—they understand why it’s valuable to them.
- Enablement—they learn how to use it and get the insights they need
- Usage—they use it regularly and effectively.
- Communication – they get regular updates, new features, user tips, etc.
- Training workshops to create a community to share ideas and expertise
Periodic training workshops organised by the Group executive can help ensure the local property team continue to make best use of the tool and derive best insights. Involving individuals from different properties creates a community and facilitates best practice ideas sharing.
- Track efficiencies and measure results
As with any system it is important to measure the results. Using Group experience, the Group executive should work with the local property team to establish the best set of metrics to monitor. Continue to track and measure through the year to make sure your investment is paying off and use these real examples to drive further adoption by properties in the group. It’s also always nice to see the benefits and be reminded of how far you’ve come and grown your business.
These best practice steps are designed to help a Chain corporate office prepare and plan for BI analytics adoption at a property level, providing the negotiating and contractual support required, and ensuring that the property benefits from a robust and supportive vendor relationship. The best performing hotels use the best of breed business intelligence tools available to make more informed decisions that maximize their revenues and help them earn their fair share of bookings.
HEDNA Hotel Analytics Working Group
The Hotel Analytics Working Group raises awareness of the opportunities data analysis brings to optimize cost and conversion and thereby empower hoteliers to collect, store, analyze and action their data to make intelligent decisions about their distribution strategies. The group is currently Co-chaired by Matthew Goulden of Triometric, Connie Marianacci of Accor and Nitin Bajah of NTTData. Click here to find out more and how to join as a HEDNA member.