Business Intelligence Applied to Hotel Marketing
By Kevin Coleman, Partner and Chief Operating Officer at Intelligent Hospitality
Business Intelligence (BI) is starting to catch on in the hospitality sector, and with good reason – using technology to transform data into actionable information yields big dividends when properly focused on a business need. How about the realm of hotel marketing and closing the gap between campaign design and performance? Arming our hotel marketing departments with current, accurate and detailed information on booking patterns in our hotels and on the performance of promotions goes a long way towards ensuring that they can do their jobs more effectively. Here we look at a few of many possible suggestions on how to best apply hotel business intelligence to the marketing function.
Understand campaign performance in detail
So how did last summer's promotion fare in our hotel(s)? Beyond the usual simple tallyof roomnights and revenue, what we can learn by deeply analyzing the production of a campaign can guide us in the planning of our next one, or even help us tweak a currently running campaign for maximum effectiveness. Business intelligence provides for the granular analysis that is required to analyze production by: selling channel, room type, geographic origin, length of stay, ancillary spend, lead time, membership program status or any combination of such factors. For instance, which bookings produced the highest net contribution, bringing us the most revenue (highest ancillary spend, premium room categories, longest length of stay) at the lowest acquisition cost (booking through direct channels)? Do these bookings share commonalities such as where the guest resides (geographic origin), how far in advance they book (lead time) or if they are part of our loyalty program (membership status)? Surely a hotel marketer would revel in such detail and be able to apply these learnings to future promotional activities.
Recognize source market lead times and plan accordingly
It stands to reason that a hotel's mix of business at any given point in time is made up
To ensure maximum return on investment, we should time seasonal campaigns (thosepromoting a given season or time period) such that promotional activities reach a crescendo in each source market at the peak of their unique booking window. This is an easy and sensible way to stretch marketing budgets - and this differentiation can be achieved through all selling channels, online and offline. Business intelligence provides the means to definitively know these booking windows in detail, provided of course that the hotel(s) in question have the business processes in place to consistently capture complete and accurate addresses on guest folios (and for this please refer to my earlier HotelNewsNow column, "Business Intelligence Begins with Data").
Monitor booking pace by non-traditional attributes
Another clear use case of hotel business intelligence in support of marketing is in theutilization of booking pace analysis to determine need periods. Booking pace is the measure of on-the-books business for a future period, as compared to an equivalent time frame, usually the prior year. While most hotels do already monitor booking pace using some type of manual analysis (for instance, Excel workbooks populated with keypunched data or a PMS data extract), seldom does this analysis venture beyond overall house-level figures or possibly market segment-level detail. The sheer data- intensive nature of the calculation prevents any further granularity in a manual reporting environment.
When business intelligence is applied to booking pace, however, some interesting andvaluable insight can be gained for hotel marketers. For instance, analyzing booking pace by sales channel can reveal relative declines in volume booked from any one channel (for instance, OTA or the hotel's web site) – and can expose this in advance while there is still time to impact results for the period in question.
Similarly, close scrutiny of booking pace by room type can reveal when promotionalactivity should be considered for premium room types such as Suites or Club rooms. And monitoring booking pace by geographic source of origin (related to the point above on understanding the lead time of source markets) can help to gauge the effectiveness of location-specific marketing efforts and/or identify markets where activity is warranted.
Clearly, there are myriad different ways in which business intelligence can support hotelmarketing. The few examples above could be considered a "jumping in" point for those interested in learning how to apply this powerful technology to marketing their own hotels or hotel brands. As BI becomes more commonplace in the hospitality industry, no doubt we will see more and more hotels and hotel companies create ever-more- sophisticated use cases.
Partner & Chief Operating Officer
Phone: +1 (404) 641-7420
About Intelligent Hospitality, LLC
Founded in November 2010 by hotel industry and business intelligence leaders, Intelligent Hospitality is out to change hotel reporting and analytics one mind at a time. With a goal to help hoteliers improve their market performance and evolve decision-making in the hotel industry, we've developed HotelIQ Business Intelligence ®. Supporting hotel sales, marketing and revenue strategy and decision making around the world, HotelIQ is a cloud-based one-of-a-kind business intelligence platform for hotels, hotel management companies, brands, real estate investors and anyone else vested in the performance of hotel assets. Intelligent Hospitality is headquartered in Atlanta, Georgia, USA. For more information, please visit: www.intelligent-hospitality.com.