The Proper Way to Use Data in the Information Age
By Jesse Ostrum Vice President of Revenue Management, Vantage Hospitality | October 26, 2014
In this current day and age, there is a multitude of information available to those involved in Revenue Management for the Hospitality Industry. We have so many acronyms that can be used to show how well hotels and portfolios of hotels are performing…ADR, RevPAR, TRevPAR, and GOPPAR. Beyond the balance sheet, there are also many additional Key Performance Indicators (KPI) that target reservation flow, customer growth and sources of business...Contribution %, Repeat Guest %, Market Segment Penetration, etc. With so much data available to us, the question quickly becomes – Are we using the data to guide the company through an ever-changing and diverse environment or are we using the information to support a direction we have already pre-determined to move?
Obviously the goal is to install a culture of Revenue Management that allows us to move in the direction the information takes us rather than use it to prop up a pre-conceived strategy, but this is easier said than done. How do you ensure that people throughout your organization or property are not using information to simply justify already existing decisions? The answer is actually straightforward…provide access to information to all your people at all levels of the company and educate them on why you value their opinions. Every department from sales to operations to groups to housekeeping to revenue management to marketing will be better able to operate effectively and in concert when given free access to information and instructed on why their part of the equation is important. What if the front desk staff had access to data that allowed them to recognize that the free upgrades they were providing throughout the year were worth $100,000 of incremental revenue to the hotel and operated in a culture that provided them freedom to develop a solution? What if the marketing department had access to data that allowed them to recognize that repeat guests typically stayed one night longer than first-time guests and had the voice to recommend a change in who they targeted with their marketing to take advantage of this insight? What if the DOS and operations team had access to data that allowed them to correlate positive reviews from groups and events with staffing patterns and then impact the future staffing schedules?
Do all your departments currently have access to a free flow of information or do they only receive some data, or do some departments and personnel have no access whatsoever? Allowing free-flowing access to information across departments can lead to game-changing connections, if everyone is properly educated and supported with an end goal of improving revenue, service and operations.
How many times are budgets, strategies and goals handed out without direct input from those who must accomplish them? Top down and bottom up development must both coexist to provide the best platform for information to guide you toward optimum performance. Schedule time to step back and re-evaluate strategies and goals each quarter. Review not just with each department, but have the departments review the goals and challenges with each other. Different viewpoints and work focuses will allow for data patterns to be better recognized and for operational knowledge to be infused with long-term strategies.
Learn lessons from both your front line people and their managers. Just as local market information should guide sales and advertising strategies in a way that national campaigns cannot, departmental insights should help guide revenue strategies in a way that annual budgets and RevPAR cannot. Who better to zero in on customer needs and desires than the people and departments that interact with them hundreds of times each day? Educate everyone on the importance of information and their place within the success of the business, don't mandate that they only view their small portion inside the box you think they should be in. Limiting information flow and restricting certain data to certain departments creates silos and the systematic development of data ownership. This separation and ownership allows each department to "dig in" and be more concerned that their numbers look good and that their departmental plans are working than if the hotel or company is performing at an optimum level.
Ok, enough about how using different viewpoints and free-flowing information makes for a better company and well-integrated team which works together to optimize success. I think that most everyone truly understands and believes that an educated and engaged staff with top-down buy-in and access to information is a great thing, but then why doesn't this exist at all hotels and hotel companies? The truth is that the pressure to produce with fewer and fewer personnel is so strong that we rarely take the time to review the information we have in any new or meaningful way. Most times there are a few set personnel whose job it is to capture the data and a few more to analyze it and a few more to whom it is distributed…each one with increasing time pressures and ongoing responsibilities. It is always easier in these circumstances to look at information the same way we looked at it last week and last month and last quarter. It is therefore not so surprising then that RM meetings seem to have the same feel each week and that marketing rarely speaks to operations about the results they achieved this quarter. At the end of the day it is simply easier and less time consuming to continue doing things the way we have always done them rather than get more people involved and explain how you think and listen to how they think…and this is where leadership and culture come into play.