If you’ve been around the hospitality industry for any length of time, you will have heard the term “business intelligence” tossed around by tech experts and, if you’re like most hoteliers, the term still conjures up some vague idea of a bunch of data in charts and graphs. Sound familiar?
NB: This is an article from HotelIQ, one of our Expert Partners
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That’s a common problem and, to be honest, it’s not your fault for not understanding the value of business intelligence solutions because there are so many different types of BI solutions, which offer different information, value, ROI, etc. that it’s hard to explain, in simple terms, what BI is and why most BI solutions today are doing it wrong.
Lucky for you, I’m here, ready to do exactly that! So, let’s get started…
In simple terms, business intelligence solutions collect, analyze and present your property’s data in an easy-to-understand way so that you can more effectively monitor performance, identify trends and anomalies, track key metrics, and make better decisions, based on real-time data.
In short, BI solutions give you the property information that you need to run your hotel more efficiently, identify new revenue opportunities and/or identify potential problems with your property’s strategy that is resulting in revenue losses.
Sounds pretty useful, right? Theoretically, you’re right but there are some issues that prevent many BI solutions from fulfilling these promises to hoteliers.
(Not So) Easy-to-Understand
Business intelligence solutions offer a HUGE amount of data – way more than the average person can learn or comprehend – so the role of the BI solution is to make the data “legible” for the user. Unfortunately, although many vendors say their solutions are “easy-to-use,” they don’t account for the lack of tech-savvy on the part of many users. A solution is only as good as the abilities of the person using it, so BI solutions must offer a truly intuitive user experience for it to produce ROI for the hotel.
Another issue is the fact that different people read, learn and comprehend information in different ways. For example, some people prefer visual representations of data, so they can better understand charts and graphs; others, prefer numbers and Excel spreadsheets, so a good BI solution should provide effective ways for all users to get the information that they need, easily, in the form that works best for them. Again, this is a place where many BI solutions fail.
While it’s one thing to collect data that’s sitting across transaction systems, it’s another thing to organize it in a meaningful way to make it easier to extract insights from it. For example, any system can aggregate the data and provide a total of bookings made during a given time period; however, very few break down each reservation into its component parts and enable multi-dimensional views of the bookings by source markets, booking channels, lead time, etc. – and this makes a big difference in your ROI on the solution.
Data, Not Decisions
Many BI solutions offer a huge amount of data and then it is the hotelier’s responsibility to use that data to determine what the best “next steps” are themselves, once again, adding back the possibility of human error. Most BI solutions don’t give actionable insights that show the user where there are opportunities for making changes to their strategy to positively influence either revenue or internal efficiencies.
Here’s why…many BI solutions don’t include analytics, which is the most important part of a BI solution. Analytics uses data and statistical methods to gain insights and make decisions; in other words, analytics is the part of the BI solution that gives you actionable insights (a.k.a. decisions), rather than just data.
There are different types of analytics:
- Descriptive analytics describes what has happened in the past.
- Diagnostic analytics helps hotels understand why something happened.
- Predictive analytics identifies the likelihood of future events.
- Prescriptive analytics suggests actions to take based on the insights.
All these types of analytics combined is what differentiates a highly effective BI solution, which provides a much higher ROI, when compared to the basic BI solutions.
Data Democratization (a.k.a. Making Data Accessible to Everyone)
The technical definition of data democratization is the “ongoing process of enabling everybody in an organization, irrespective of their technical know-how, to work with data comfortably, to feel confident talking about it, and as a result, make data-informed decisions and build customer experiences powered by data;” in short, data democratization is a fancy way of saying that BI solutions must make data accessible to everyone to maximize your team’s ability to collaborate using consistent data and insights.
For hotels, the BI solutions should be accessible to, easily understood and used regularly by all internal departments, including revenue management, sales and marketing, as well as executive management. By giving all internal departments equal access to consistent property data, it is easier for them to collaborate to identify new revenue opportunities and develop strategies that benefit the hotel’s overall profitability. So, if you’re in the market for a BI solution (or if you need help accessing and understanding your property’s performance), then look for a BI solution, which combines business intelligence, analytics AND seamless collaboration; in the end, your bank account will thank you for it!
Read more articles from HotelIQ