Big data or Relevant data?
This week I was lucky enough to experience 3 of my favourite things all at one time: a fantastic hotel, great hotelier friends and rugby!
I was taking part in Tourism NI’s event and was lucky enough to get to listen to two wonderful speakers – Mr Paul O’Connell – Ireland Rugby International and also Mr Joe Schmit – Ireland Rugby Coach – it was an interesting day to say the least. But one of the things they talked about was the sheer amount of data that they receive during the game from each players heart monitor and GPS. It was fascinating to get an insight into what the coaches and management team learn but oh my goodness, are they ever over-whelmed with data!
Aren’t we as hoteliers as well? Frankly I am a little bored of hearing about our ‘Big Data’ revolution. As a Revenue Manager, all I want is Relevant Data, so what should we really focus on? Here are my key indicators:
- Understand Base Rate – and stop setting rates based on BOB – Too many times over the past few weeks I have heard hotels that frankly should know better, say that they have triggers in place to move their rates when a certain number of rooms have been sold. Why on earth would you do that? Why would you sell a room in July at your lowest rates, when you know you will fill just because you have only 5 rooms confirmed today? For goodness sake, look at ‘base rate’ i.e. the lowest rate you need to sell on any given day and start building on that. On a Saturday in January that might be a Low Rate but for Saturdays in July, even with only a small number of rooms sold, you should start much higher. If you don’t, you are leaving money on the table
- Lead Times – understand how far in advance your business picks up. Of course leisure or resort hotels traditionally pick-up further than corporate hotels, but lead times are shortening in every sector. Understand when your business starts to pick-up and this will give you more confidence in holding out for better rates during high demand
- SPIT – Same Point in Time – Understand where you were sitting for each day in July (as an example) on the 23rd of May last year (SPIT). Are you ahead or behind? What action does this information trigger you to make? But before you panic as you are 50 rooms behind for Saturday 15 July compared to last year, ask yourself what happened last year to achieve so many rooms sold? In fact, a much better analysis is to watch how Saturdays in July usually trend – where do they end up as an average? Take all the Saturdays last year; count up the number of rooms sold and then divide by 4 (the number of Saturdays last year). What does this tell you? Are you still way behind?
- Rate Levels – What rates did you sell last year to achieve your revenue target and how did these evolve over time? This will help you set rates this year. So for example, if you sold mainly leisure rates that achieved a high ADR last year but someone has taken a tour series this year at a much lower rate, what action would this make you take? Does your forecast need adjusted?
- Market Segment Behaviour – if you are manually recording data then I would recommend you note your rooms sold and your revenue for at least the next 90 days and watch how that evolves. Now add in a breakdown by segment. This will quickly help you identify trends by market segment. When do your leisure guests book? What impact are wedding blocks having on your business? When does the corporate market book? A good visual help is to plot these on a graph, this will help you visualise how each segment trends,
- ADR by Segment – if you can get rooms sold and revenue by segment, by day from your PMS or preferably your revenue system then watch how rate behaviour effects each segment. Do your leisure guests stop bookings when you push the rates too high? Are your corporates price sensitive at all?
These 6 pointers are a start and next week, I will give you 6 more. The key to all data is to find what is useful to you. Track only what you can measure and measure only what you can analyse. Do not ask your team to collate mountains of reports that mean nothing. Make your data useful and relevant to you.
Rugby as they say, is a game of two-halves, as is this post 🙂 More next week…
(and for all things revenue, just firstname.lastname@example.org)