HM Executive Roundtable: How to make data-driven decisions for profitability, efficiency

How to make data-driven decisions that drive profitability and efficiency was the focus of the Hotel Management’s recent Executive Roundtable sponsored by Otelier. The event, held during the Hunter Hotel Investment Conference in Atlanta earlier this year, brought together operations and brand executives who shared how they are using data, how they are turning data into analysis and how that data is prompting smarter business decisions.

While the hospitality industry might be slower to adopt technology, hotel executives understand the promise of data and its transformative power in their operations. These executives understand the pivotal role of data in making smarter decisions for their hotels.

Vinay Patel, CEO at Fairbrook Hotels, reflected on the industry's technological evolution, acknowledging the hospitality industry as a whole has been slow to adopt technology—but in the past several years, data has become much more available and in ways that hoteliers can actually use.

“I can get on my phone and look at what's going on at our hotels, whether it be number of rooms last night, to the labor costs we had the other day, to whatever else is out there,” Patel said. “It really has made decision making a lot more efficient—not only for myself as an owner, but for our team members as well, as our managers, to our executive housekeepers, to a front desk agents. It really has made a lot of difference in terms of how we operate these hotels.”

Patel's words resonated with the group, highlighting how data had become a game changer, empowering not only owners like himself but also the entire team—from managers to housekeepers—with valuable insights for efficient hotel management.

Ryan Alpert, executive vice president of sales and commercial strategy at GF Hotels & Resorts, emphasized the shift towards leveraging artificial intelligence and technology to optimize labor decisions, recognizing the pivotal role of data in controlling expenses and staying competitive in the market.

“The recent trend now is utilizing AI to make smarter decisions quicker—and as we all know, speed to market is king right now,” Alpert said.

Representing the brand perspective in the group, Matt Campbell, chief operating officer at My Place Hotels, underscored the omnipresence of data in every decision-making process, shaping strategies and guiding investments. “As technology evolves, it makes it easier ... to shift and adjust the strategy because data exists at every component along the way,” Campbell said.

Patrick O’Neil, chief operating officer at Vision Hospitality Group, added a practical touch to the conversation, emphasizing the importance of not just having data but also ensuring that it was wielded effectively across all levels of the organization.

“There's so much data that people don't know what to do—they're almost paralyzed,” he said. “So we have to understand how to make it clear for everybody to use, when to use it, how to use the tools that you have.”

O’Neil stressed that it isn’t just having the right tools to analyze that data but training the people to use those tools so it can be the most productive for themselves and for the total operation.

“It can start to be a chore rather than tool in your toolbox,” he continued. “If we aren’t training our people so they understand the why the data makes them a better operator or sales leader, then it won’t work.”

Guest Personalization

In the world of hospitality, personalized service and human touch reign supreme, and data can guide decisions.

Joe Viglietta, chief operating officer at Dimension Hospitality, suggested thinking about data usage and guest personalization from the brand perspective. For example, based on data, he might learn that a guest drinks two Diet Dr. Peppers during every stay. Using that knowledge, he could leave two complimentary sodas in the guestroom with a note thanking the guest for their loyalty. “It’s a small gift, but it could very well mean that the guest will come back to that hotel or that brand all of the time.”

Viglietta suggested that brands need to make elevating the guest experience their top data-investment priority. Correlation studies could be helpful so data analysis could reveal the intricate relationships between decisions and outcomes. Such studies can create the holistic impact of data on various facets of hotel performance, from financial metrics to guest satisfaction. 

The integration of guest data into operational decision making can enhance the guest experience. The panel agreed that leveraging AI and data analytics to personalize and streamline operations ultimately can improve efficiency and guest satisfaction. As such, the ultimate goal is to strike a balance between the art and science—where data informs decisions but human intuition and experience also play a crucial role.

Employee Engagement

The conversation turned to employee engagement. Almost everyone agreed that engaged general managers play a crucial role not only with the guest experience but with properly using the data available to them. These GMs are deeply involved in understanding market dynamics, utilizing tools effectively and updating forecasts regularly. Their engagement level can be a key factor in navigating unpredictable situations and making informed decisions, the panel agreed.

Daily forecasting in driving bottom-line performance for GMs as it highlights the importance of consistently updating forecasts based on available data, historical trends and market dynamics, said Richard Jones, senior vice president and COO at HVMG.

“The best GMs that deliver the consistently best bottom-line performance are the ones that forecast every day,” he said. “They just spend 15 to 20 minutes every morning, and since the data is all there, you’ve got the historical trend, pace data, growth and others.” HVMG has adopted daily forecasting as a best practice for both top and bottom line, Jones added.

GMs can optimize performance and ensure the success of their teams—but they also need effective tools and controllable factors to achieve desired outcomes.

“You've got to have that engagement to be able to answer the question, 'Are rates moving in one direction or occupancy moving in one direction?'” Campbell said. “Again, what are you doing with [the data]? How are you changing the plan?”

Accurate, digestible and timely data is also crucial. O’Neil emphasized the value of having reference points, such as benchmarks and comparisons, to gauge performance effectively, and highlighted the need for data to be presented in a format that users can easily comprehend and apply to their decision-making processes.

By aligning incentive programs with controllable factors, such as labor and supplies, individuals can be empowered to succeed, O’Neil said. “Housekeepers can't control [gross operating profit], but they can control housekeeping labor. They can control the supplies that they buy,” he continued. “Because you can now slice and dice the data very easily, you can make the incentive programs for things that they can control. And that lets them win.”

But with all of those controllable and uncontrollable systems, operational success comes down to proper leadership and having GMs delegate to their teams, said Shozib Khan, vice president of hotel performance and analytics at Spire Hospitality. “We have the front-desk system, the [point-of-sale] system, the sales and marketing system, the [business-intelligence] system, the accounting system, the time-and-attendance system and then also the labor-management system,” he said. “We did an inventory across the board and on average, there [are] seven systems that our GMs need to be engaged in. That's not possible.

“What we found is the GMs that are the most successful have teams that are engaged, and they own the systems that they're utilizing at their hotels and maximizing the usage of the systems that are in place.”

Artificial Intelligence

But right now, Khan is waiting for artificial intelligence to come into play with those systems. “I want AI on top of that stack of seven systems and connect[ing] the dots because we need all seven of them,” he continued. “We're not there yet.”

With the vast amount of data generated in hospitality, AI can help analyze this data to provide valuable insights. This could range from predicting guest preferences to optimizing pricing strategies and resource allocation.

Viglietta agreed. "AI can be the key to unlocking the full potential of our data," he said. "It can help us connect the dots, identify trends and make informed decisions that drive business success."

There is potential for AI to transform various aspects of the hospitality industry but the ability to analyze data of all sorts will be a game changer, Otelier CEO Vic Chynoweth surmised. “Data is invaluable but at the same time, it’s got to be the right data at the right time in the right form,” he said. “What’s so unique about the hospitality vertical is that the people who use the data have many other jobs—they aren’t just data experts.”

Ultimately, hoteliers want insightful data, Chynoweth said—so his company is looking at AI to turn data into information. “We can ask [AI] something in regular English, and insights can be revealed,” he noted.

This article was originally published in the June edition of Hotel Management magazine. Subscribe here.