Staying One Step Ahead of Economic Uncertainty with an Effective Business Intelligence Strategy
Best practice tips on how hoteliers can make the most out of their organization’s performance data to preserve revenue and successfully navigate challenging economic times.
During times of economic uncertainty and anxiety, any company and profession can become prone to making hasty decisions that may lead to drastic consequences for the survival of their business. Yet regardless of the current state of the economic environment or sudden swings in market performance, one solid rule that persists is that companies always have the benefit of being able to rely on their performance data as a way to identify the best response strategy while avoiding costly mistakes. Whether attempting to determine revenue projections, analyze which services are vital to business health versus those that should be scaled back, or seeking to understand how to remain competitive within a declining market, leveraging a company’s priceless accumulation of daily performance data can provide hoteliers with the critical insight needed to make the best strategic decisions possible.
Created by hospitality’s leading experts in business intelligence and data management technology, what follows is a list of best practices that hotel businesses can take in order to make their data work for them in successfully navigating unsettling economic times. From predicting future business and profit to identifying opportunities for much needed revenue or minimizing the consequences of any financial risk, following such steps can mean all the difference in successfully riding out an economic storm. Further still, implementing a business intelligence-based strategy can lay the foundation for companies to come out of an economic downturn with a strong operation that is more competitive and profitable than what existed before.
The Benefits of Forecasting in Deciphering the Unknown
One of the key concerns for hoteliers facing a hostile economic market is that they feel there is no ability to determine the scope of financial fallout or identify any measures that can be put in place to preserve revenue. Yet with each property effectively sitting on a wealth of information originating from performance data-generating systems that include PMS, POS and accounting software, such a belief is not entirely accurate. By analyzing historical guest amenity usage-data for example, hoteliers can identify the core services that their guest demographic finds to be essential, while scaling back on those less popular and recuperating needed revenue without jeopardizing guest satisfaction. By examining historical guest booking rate patterns, hoteliers can further better predict upcoming labor needs during a financial upset, and can therefore plan schedules accordingly to ensure adequate coverage. With hotel businesses responsible for an array of financial commitments regardless of the current state of the economy, from paying vendors to maintaining monthly television cable subscriptions, forecasting and budgeting can also readily provide hoteliers with the much-needed ability to identify exactly where their revenue is going and therefore, prioritize accordingly.
As part of any economic cycle, hoteliers can rest assured that poor market performance will inevitably give way to more promising times. Yet key to determining when to expect such a turn of events, and importantly, how to come into a healthier market stronger and more competitive, is the ability to have effective forecasting and budgeting procedures in place. By analyzing historical guest booking trends on a daily, weekly or month-by-month basis, hoteliers may for example, begin to see a rising pattern in guest booking numbers before any improvement in market performance is known to the wider industry. Such hoteliers can then begin to ramp up their offerings and promotional activities to match ongoing business growth, ensuring that they are on a stronger footing than competing properties when the market finally fully rebounds. As the economy improves, hotels able to analyze trends in guest purchasing can further determine what offerings work best within the new market environment, ensuring their ability to focus existing revenue resources strategically towards obtaining maximum profit potential while maintaining a lower risk of making a poor investment decision.
Ensure Quick Access to Relevant Data Alongside Organizational Transparency
Access to performance data in order to effectively forecast and budget during an economic crisis can be critical in ensuring business survival as previously demonstrated, yet so too is the ability to swiftly locate such information and share it with others across an organization. With hotels generating a multitude of performance-related data on a daily basis, locating relevant information that is vital to implementing an effective response strategy is frequently subject to a tight timeframe due to rapidly evolving market conditions. This is especially true when faced with a declining market with circumstances able to suddenly shift all the more rapidly. To overcome this challenge, hoteliers should analyze how their current data management infrastructure is designed to ensure that performance-related data is easily accessible as soon as it is needed and by whoever specifically requires it. If possible, hotel businesses should attempt to create daily, weekly or monthly performance reports that are customized to only provide information that is consistent with the needs of a specific role, such as department managers, property-wide leadership or those overseeing the performance of multiple hotel locations. Such an approach ensures that each employee is able to promptly identify any issues affecting their area of responsibility without consuming countless hours attempting to locate analytics that can offer crucial insight into what their next steps should be. Instead, staff and business leadership can obtain a vital head start in understanding the ramifications of an underperforming market for their particular role, and can immediately begin focusing on identifying and implementing measures that will mitigate or possibly eliminate negative consequences before the opportunity to do so is lost.
Just as important as providing employees with access to relevant information during a time of financial crisis is the ability for each staff member to instantly communicate and share performance updates across an organization. During a time of economic difficulty and with informed strategic decisions needed to be implemented immediately to prevent additional revenue loss, organizational transparency is essential in making sure that management and leadership all possess the latest performance updates in order to further minimize the amount of time needed to arrive at an agreed upon response. To achieve this ability, hoteliers should evaluate how their data management infrastructure is designed to share performance updates with multiple employees across an organization in real-time. Staff should further be able to instantly share any analysis adjustments or notes with relevant colleagues in order to dramatically curtail the time needed for update briefings. Such a system should additionally be evaluated for its web- and cloud-based capabilities to provide full remote access should an employee be unable to work physically at an on-site location, therefore maintaining minimal disruption to data management and business intelligence processes at all times. These features again ensure that both hotel leadership and employees can always feel confident in their ability to focus on implementing a plan that is based on an accurate depiction of the current business environment regardless of each individual staff member’s current work location , and that offers the routine ability to achieve intended results.
Leverage Sales Pacing Data to Boost Productivity Where it Stands to Make the Biggest Difference
During periods of economic hardship, analyzing a hotel’s sales productivity can provide a vital lifeline into identifying areas where additional revenue can be obtained. Hoteliers should consistently review such information to determine the sales performance of specific departments, locations or sales personnel. By doing so, they can leverage month-over-month statistics to identify, for example, if a specific sales promotion is performing more profitably than others and therefore shift resources to focus on the more successful promotion accordingly. Perhaps a specific department such as a hotel’s on-site restaurant is still able to attract customer business despite existing within an unfavorable market. By reviewing sales pace data, hoteliers can more readily identify such opportunities to maximize potential income and can task sales efforts to concentrate on further enhancing sales for departments that are able to continue serving as a significant source of revenue.
With sales pace data also able to identify the performance and productivity of individual sales personnel, hoteliers facing financial difficulty can additionally identify their star performers and maximize the use of their skills during a time when they are needed the most. They can further determine if a specific sales employee is more proficient in attracting the business of a particular guest demographic, and can task them with the need to prioritize their attention on increasing needed sales within that segment. Hoteliers can also leverage pacing data to identify personnel that are struggling to meet sales needs during an economic upset. In doing so, they can perhaps strategize with such employees in order to determine possible alternative sales avenues that can lead to enhanced revenue results. Furthermore, hoteliers can utilize sales pace analytics to locate which personnel are in need of additional training to ensure that sales departments are always at their strongest regardless of the economic environment.
Always be Prepared for Inevitable Market Instability by Leveraging Your Data as the Ultimate Business-Planning Guide
Today’s hoteliers more than ever understand the importance of being able to predict upcoming market and company trends in order to ensure that their businesses are fully prepared to overcome any suddenly arising risks to operations and revenue. As markets inevitably decline in the face of an array of potential factors, hospitality professionals can understandably feel powerless in their ability to chart a course for how their business can endure, and can as a result, be far more inclined to make hasty and error-prone decisions. Yet as this guide demonstrates, each hotel business already possesses the needed insight to successfully proceed by leveraging valuable operational performance data as a means to identify where their business currently stands, where it is headed and what actions need to be taken in order to preserve organizational stability. What remains is ensuring the ability to access such data in a way that is timely and that can be relied upon to always present a fully accurate depiction of the current hotel business environment, with individual employees able to instantly locate the analytics that matter most to their respective priorities and needs.
Yet by implementing such a business intelligence environment and by seeking out assistance from solution providers when needed during an emergency, such as requesting best practice guidance or support with daily data management needs, hoteliers can ensure that scarce time and labor resources do not prevent their ability to identify and implement strategies that safeguard their business during times of crisis. They can further preserve their ability to make a full recovery once market conditions improve, and can equip their business with the tools needed to ensure strong and consistent business growth into the long-term future.