“In God We Trust, Rest All Come With Data” – these were the words engraved in my mind while attending my first ever lecture on Strategic Management and believe you me these words have held their ground in every aspect of my professional life and the Revenue Planning Process.
As remarked by Albert Goodman (1995) – “our fascination with 'facts' is persistent and universal. They seem to offer continual reassurance: whatever the foibles of human opinion, some things at least are beyond argument. We all know that up is up, left is left, and the sun rises in the east”. Thomas H. Davenport the author of the acclaimed book “Thinking for a Living” explains that some companies have built their very business on their ability to collect, analyze and act on data.
An organization’s quest to create the greatest competitive advantage lies in the successful deployment of business analytics. On the same subject Davenport (2005) believes that organizations are competing on analytics not just because they can but also because they should since he considers analytics to be the last remaining points of differentiation.
An analytical competitor knows what product their customers want but they also know what prices those customers will pay, how many times each will buy in a lifetime and what triggers will make people buy more. Wal-Mart uses vast amounts of data and category analysis to dominate retail. Sands Las Vegas has changed the basis of competition in the gaming industry from building mega casinos to analytics around customer loyalty and service. Amazon and Booking.com aren't just e-commerce platforms; they are extremely analytical and follow a "test and learn" approach to business changes.
In this respect, Booking.com, Sands and Amazon have dominated their fields by vast deployment of analytics across a wide variety of their activities – Revenue Enhancement and Planning being one. Infact, the basic foundation of Revenue Management rests on the ability to take informed decisions based on objective analysis of data. Pricing, forecasting, yield management decisions - all emerge out of a systematic process of data collection and analysis.
Take the case of a hotel that is experiencing a downward trend in its average rate resulting in a depletion of revenues. What questions would you want to ask to determine whether, and how, it can do better? Can we identify what the hotel’s “problems” are? What trends come out of the data and what additional information do we need to better understand the problem and identify a solution? Answering these questions can be often time consuming and involve a great amount of wasteful analysis unless a systematic process is adopted. To add method to this madness I have found the six steps of data collection and analysis extremely helpful.
The six steps are like a cycle wherein the last step gives way to the first and the entire cycle is initiated all over again; but this time to determine the success/failure or the extent of the success/failure of the solution.
It often amazes me that there is so much chatter about the importance of Revenue Management but apart from a handful of global chains and independents, much of the hotel industry still relies on manual and excel based tools to collect, collate and organise data. It makes me wonder if the purpose of Revenue Management is truly understood? How do we expect our Revenue Leaders to hypothesize and answer questions when they are spending their energy in time manual, time-consuming, unproductive and often wasteful analysis.
Today technology is much cheaper and affordable than 10 years ago and in my experience an investment in such solutions offer 10:1 return.
Large volumes of data by itself is meaningless. Hoteliers need to focus on "Smart Data"; data that can be transformed into actionable insights. This is accomplished through sophisticated data processing and analyses that are continually evolving. Large amounts of data today can be processed in a matter of seconds. Freed from the need to produce labor-intensive manual hotel reporting, hoteliers can increase the speed-to-market of their strategies and gain a competitive advantage.
By analyzing business on the books in addition to historical performance, tools today are able to make predictions based on historical and future patterns; allowing hoteliers to take advantage of opportunities while they still exist.
Rev-Mantra has developed a proprietary methodology that helps hoteliers convert such vast amount of data to more meaningful insights and in doing so we also partner with Intelligent-Hospitality and their award-wining Data Analytics and visualization tool – HotelIQ. If this blog post resonates with you, feel free to reach out and have a conversation with us!
About the Author
In a career spanning 20+ years in the hospitality industry Puneet Mahindroo, Founder and CEO, Rev-Mantra Pte. Ltd., has worked in various hotel and corporate level roles in Marketing, Revenue Management and Distribution. He has been responsible for implementation of several strategic projects; ranging from Performance Marketing, Sales Systems, Automated Revenue Management System, Revenue Management Education, Pricing Reforms and implementation of Distribution Platforms; for brands such as Four Seasons, InterContinental Hotel Group and Taj Hotels Resorts and Palaces.
Puneet is also involved in various industry wide initiatives. He serves as the Asia Pacific Chair to the HSMAI Revenue Management Advisory Board and in the past successfully completed 2 terms as the Asia Pacific Chair on the Board of Directors of Hotel Electronic Distribution Networking Association (HEDNA). He also served as a member of the Leading Hotels of the World International Rooms, Revenue Management and Distribution Advisory Board.
Puneet is passionate about education and training and has been external/visiting faculty of Revenue Management to leading business schools such as Indian Institute of Management, Ahmedabad, SP Jain, Dubai and also involved with the Cornell University on projects and roundtables.
About Rev-Mantra Pte. Ltd.
Rev-Mantra management consulting services focus on our clients' most critical issues and opportunities: strategy, marketing (offline/online), distribution, sales representation and analytics across service industry and geographies. We bring deep, functional expertise, but are known for our holistic perspective: we capture value across boundaries and between the silos of any organization. We have proven a multiplier effect from optimizing the sum of the parts, not just the individual pieces.
About Hotel IQIntelligent-Hospitality are hoteliers and business strategists who understand how to apply the right technology in the right context to help advance your decision-making culture and improve results. This is hotel Business Intelligence, and this is what they do. Intelligent-Hoapitality work with like-minded hotels, hotel management companies, brands, real estate investors – and anyone else vested in the performance of hotel assets – to experience how Business Intelligence and analytics can transform their view of what hotel reporting can do.