Big data encompasses an unmanageable number of concepts and theories, so many that it does not have a specific, tangible definition. Now, big data is so big, so convoluted, that the compound word is benign.
Business intelligence — on the other hand — has tools, variables and parameters we hoteliers can use to assess client needs and expectations; the strengths and weaknesses of a hotel marketing plan; and the requisites needed to bolster business.
There are three business intelligence concepts a hotelier should become familiar with before attempting to implement others: market data, trend analysis and predictive modeling.
The foundation of business intelligence, market data, is the raw, uninterrupted information regarding a hotel business. Market data — when assessed through the spectrums of formulas and algorithms — lead to conclusions regarding business decisions, decisions such as rates and prices; marketing spending and means selection; business development and improvement plans; future trends; and market predictions.
Market data does not necessarily required software and algorithms. Rudimentary market data can be compiled using something as simple as a hotel’s accounting numbers and guest logs. But, to compare the strengths and weaknesses of your hotel against those of others, more powerful methodologies and tools are required: trend analysis and predictive marketing for example.
Trend analysis is the act of utilizing market data to determine which sectors of the hotel industry are moving in what direction. An example of trend analysis is researching which marketing outlets garner the most customers.
A trend analysis question might be: are travel websites like Travelocity and TripAdvisor a necessary evil, or can a hotel generate an equal amount of business using social media outlets like Facebook and Twitter? The implication being, the commissions travel websites take from hotels may not be worth the cost, that there may be other — less expensive — options.
Trend analysis allows hoteliers to keep up with the latest, most lucrative business models in the hotel industry and avoid continuing to maintain practices that are not worth the time, effort or funding.
Using predictive analytics, hoteliers can determine the probability of future trends in the industry. While the formulas and analytics of predictive modeling are complex, there are firms that can do — almost — everything for a hotelier. The difficult part of predictive modeling is finding the market data. As a result, there are firms that provide data mining services, crunch the data and provide predictive models so hoteliers can make educated decisions with regard to business and strategy.
But, it is important to remember that data mining firms — while they have the technology to find the data and the tools and software to generate a predictive model, — specialize in mining and crunching.
In other words, it is up to the hotelier to determine which questions should be asked.
For example, even laymen understand that conferences and conventions may help fill up a hotel. But a more important factoid to know would be: when and how’s coming to town and for how long? Or, is a hotel just as likely to increase its revenue by aligning its rates to its competition regardless of whether there’s a special event in town?
Specifics the Key to All Hotel Business Intelligence
While the examples used to explain marketing data, trend analysis and predictive modeling are simple and straight-forward, the real value in these business intelligence tools is in the fact that they can be used to discover extremely specific market fads, trends and proven practices. For example, consider the conference/convention example again.
A hotelier can ask for specifics such as which hotels are to full occupancy, which ones are charging more within their competitive sets, how’s charging the least, how long does a guest stays and much more…
The questions hoteliers can ask and have answered using hotel business intelligence is virtually limitless.