The Next Frontier in Revenue Management
Big Data seems to have been the buzzword in most industries for the last five years. But unlike many other industries that have integrated Big Data as a key component of their operations, the hotel industry is lagging very far behind, writes Jean Francois Mourier.
In my opinion, this is a big – and costly – mistake to make! You might be asking yourself: “How can my hotel leverage the power of Big Data?”
But before I explain how your property can use Big Data to generate significant increases in occupancy, Average Daily Rate (ADR) and RevPAR, let’s go back to the basics. (Note that italicised terms have been hyper-linked for more information on the subject matter – Editor).
What is Big Data?
Google defines Big Data as “extremely large data sets that may be analysed computationally to reveal patterns, trends and associations, especially relating to human behaviour and interactions”. Wikipedia defines Big Data as: “a broad term for data sets so large or complex that they are difficult to process using traditional data processing applications. Challenges include [the] analysis, capture, curation, search, sharing, storage, transfer, visualization, and information privacy.”
What does all of that mean?
Basically, Big Data is a large amount of data (it is not specific to a certain type of data) that is unable to be analysed by traditional methods – either manual or technological. Because the data is so complex and has so many elements, it needs highly advanced technology to effectively capture and analyse the data, in order to provide a valid conclusion or usable information.
The hotel industry is the perfect one for the implementation of Big Data analytics. Due to the huge number of competing hotels in most destinations, the never-ending list of online travel agencies (OTAs), historical rate data and the fact that most properties change rates at least once daily (in fact, rates should be updated in real-time, but unfortunately for most hoteliers, time constraints and limited access to advanced technology don’t allow for it), there is a plethora of data available to hoteliers that can be leveraged to more effectively price their rooms.
By taking all of those factors into consideration – as well as observing and analysing regions and each hotel’s patterns, a property’s rates can change as the market conditions do, ensuring that the rate offered (via the online channels) is always the best rate, at the right time, to ensure the highest number of bookings and the highest revenue from each. Only a very, very complex technology can execute this type of analysis and continue to update the rates in real-time. By updating rates in real time, hotels will experience a significant increase in occupancy, ADR and RevPAR.
At the end of the day, information is power – but only if you can access it or use it properly. Is your property leveraging Big Data to ensure that you are always offering the best rate, at the best time, updated in real time – and experiencing the huge financial benefits of doing so? If your answer is no, there is are tried and tested solutions out there.
For more information visit www.revparguru.com
About the author. Jean Francois Mourier is the CEO of REVPAR GURU, a company that provides hotels around the world with an alternative revenue management software solution, designed to deliver maximum bookings and profits.