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How to apply hotel business intelligence to marketing

How to apply hotel business intelligence to marketing
How to apply hotel business intelligence to marketing
August 12th, 2018

How to apply hotel business intelligence to marketing

Big data and business intelligence (BI) have been getting substantial media coverage recently, so much so that they have become new “buzzwords” in the business sector. While many people use these two terms interchangeably, they, in fact, mean two entirely different things.

Big data and BI definition

Big data is the act of generating, capturing and usually processing enormous amounts of data on an ongoing basis. Business intelligence, on the other hand, refers to software and systems that import data streams of any size and use them to generate informational displays that point towards specific decisions. This process is known as “analytics” because it analyzes and digests data streams in a way that is both actionable and easier to understand.

Let us use a simple analogy to illustrate these two concepts: Big data is like having a massive kitchen cupboard, in which we keep billions of different ingredients from getting lost, spoiled or disorganized. Analytics is using these ingredients to create a beautiful, well-rounded, delicious meal, which on the surface gives the impression of being simple.

As a result of these two concepts getting confused, hoteliers tend to think that they need significant data-sized streams to use business intelligence analytics. The reality is that any amount of data can be enough to take advantage of BI software.

Business intelligence 101

The aim of BI is to gather data from various sources, mainly from the systems that are used to run the business (like the property management system or the revenue management software), but also from external sources such as competitive analysis, market data, economic factors and industry trends. Business intelligence technology is then used to process the data and present this information to decision-makers to help them understand their businesses more closely – both historical performance and future activity – via dashboards, reports and graphs or charts. Today, these systems are mostly cloud-based and available as web applications. They were purpose-built just for analysis and decision support to enable business leaders to find ways to increase sales and/or reduce operating costs; therefore, BI platforms provide fast and widespread access to accurate information.

BI applied to the hotel industry

Hoteliers and general managers use different systems to run their businesses: property management software, central reservations systems, revenue management software, sales and catering systems, etcetera. However, their primary function is not analysis and decision support. There is a more significant problem affecting hotel businesses – from independent hotels to corporate offices of hotel brands –, and that is the lack of critical, timely information on the most fundamental aspects of their business. Most hoteliers attempt to solve this deficiency through manual reporting, which relegates some of the brightest minds in the industry to the role of information producers. With BI, the production of reports and analytics is automatic; therefore, the brightest employees can become informed consumers, utilizing this technology to make informed decisions that will influence the hotel’s bottom-line.

The use of business intelligence is still not commonplace in the hospitality industry. There is a need to get BI into the hands of decision-makers at all levels, not just top-level management. It should take center stage and be an essential part of the day-to-day life of a hotel business executive. For instance, BI can equip your marketing department with current, accurate and detailed information on booking patterns in your hotel.

Let us discuss just a few BI marketing applications.


How to apply BI insights to hotel marketing

  • A better understanding of campaign performance: We can use BI analytics to analyze a campaign’s performance in depth, which can guide hotel marketers when planning the next campaign or help them tweak one that is live to achieve maximum effectiveness. Information such as selling channel, room type, geographic origin, length of stay, ancillary spend and lead time can be combined and processed to answer essential questions, such as: which bookings produced the most revenue at the lowest acquisition cost? Armed with these insights, marketers can fine-tune future promotional activities.
  • Analysis of booking pace: Booking pace is the measure of on-the-books business for a future period compared to an equivalent timeframe, usually the year before. When BI is applied to this metric, hotel marketers can gain valuable insights. For example, analyzing booking pace by room type can reveal when marketing efforts should be considered for pricier room types, and monitoring this metric by geographic source of origin can help to assess the performance of location-specific promotional activities.
  • Recognition of lead times to plan accordingly: It is common knowledge that guests from farther away tend to book further in advance (due to their need to make travel arrangements). Therefore, marketers should time seasonal campaigns so that promotional activities target each source market at the peak of their unique booking window. BI provides the means to know these booking windows in detail, provided the hotel has implemented processes to capture guest addresses consistently.

BI analytics can aid hotel marketing in many different ways. As business intelligence becomes more widely used in the hotel industry, its potential impact on other areas, such as Operations or CRM, is also enormous. It is worth mentioning that technology alone is not enough – successful BI implementation requires bright individuals with excellent analytical skills as well as adequate processes in place to turn big data streams into valuable, actionable insights that achieve real results in the real world.

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