What insights can be gained from BI platforms

Rainmaker BI

This article is part final part of a three-part series on revenue management. Here is part one and here is part two.

Since business-intelligence platforms are much more comprehensive in information, they can offer insights previously not available to hoteliers. At an executive level, estate-wide KPIs, quartile reports and exception reports all deliver insights that revenue managers can pass along to their teams and show where effort should be focused.

They can show channel profitability: As channels have become more numerous and complex, it’s harder to keep this under control. BI enables users to aggregate up to the channel level, enabling an easy analysis of marketing investment versus production. Since the BI analysis can be performed at the individual rate-code level, revenue managers can perform a complete analysis of historical performance and show whether accounts are producing. Accounts may be producing high volumes of room nights and or even revenue but only deliver on sold-out nights.

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BI can show promotional effectiveness as well. “Promotions only work if they stimulate additional bookings,” said Tom Ray, director of business intelligence for The Rainmaker Group. “The risk is that promotions can cannibalize demand.”

In one example, Ray used, a group of hotels found that its 14-day advance purchase product was being booked 14 days prior to arrival, meaning existing bookers were trading down. Moving the term to three weeks out solved the problem.

Another insight that could be gained through business intelligence is source market analysis. Revenue managers can compare year-over-year pick-up by source market. This can be a huge benefit to independent hotels that have to invest marketing funds directly and don’t have access to a chain’s macroeconomic reach. Ray explained an example where a resort hotel was looking like it would miss its forecast. It turned out to be caused by a year-over-year drop in production from Russia. This trend was tied back to economic activities in Russia so the hotel’s marketing dollars were deployed elsewhere.

“Guided analyses are a good way to bring all these together—starting with the global view and drilling down and through the data until the action needed to be taken is found,” said Sanjay Nagalia, COO at IDeaS. “Determining which properties, DOW patterns, market segment groups, and room types with a few clicks creates a very powerful and insightful toolset.”

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