How to delve into data to take decision-making to new heights
There are several aspects of a revenue manager’s role that can benefit immensely from proper data management and analytics. But getting closer to this requires a pragmatic approach, especially when it comes to organisational challenges and turning data into actionable business intelligence. EyeforTravel’s Ritesh Gupta finds out more.
Revenue management (RM) executives are keenly following developments pertaining to data management, especially ones related to what it takes to enhance their decision-making. Be it for the role of analytics in their up-selling strategy, tapping rate oppotunities or demand forecasting, RM professionals realise that all these business functions can be enhanced by sound data management.
RM teams are trying to improve how they analyse data and this requires a methodical approach to what is available. In fact, it seems there is no looking back from here as all of this directly impacts critical decision-making.
Strong foundations, hard work
‘Immense’ is how Ash Kapur, vice president - revenue management & distribution, Starwood Capital Group, sums up the role of data management in areas such as demand forecasting and tapping rate opportunities. “Data should be the platform for everything. Today, hotels store data in different platforms that don’t necessarily exchange info (or all info) on a real-time basis,” he says.
Kapur points to two of the common challenges that various disciplines, including RM and distribution, face today. For one it takes a lot to set up an organisation around data and eventually understand the language of data. Secondly, if big data isn’t exactly normal business intelligence, then the aptitude and expertise required can be difficult to find.
This is a challenge, but the travel industry must stay focused. In an upcoming article with Adam Turnbull, director of distribution operations, Rail Europe (who will be speaking at The Smart Travel Technology Show in Boston Oct 22-23) has the following recommendations:
· Have foundational data management working well (a genuine need!) before jumping into big data. A lot of articles purport to be about big data are actually about things like data integration: bringing data from disparate systems together. Those are the kinds of challenges for which big data tools and techniques are not a panacea, and they have to be addressed first.
· Identify the business objectives. What specific business metrics do you want to move, what is your hypothesis for what will move them, and what data do you have that can help you with that?
· Start identifying and cultivating talent in the organisation who are able to understand and analyse the data well.
· Get governance principles decided: know who is responsible for data, its quality and availability -- for making sure that the accurate data is delivered in a timely manner for decision-making -- who is responsible for compliance and, if relevant, privacy.
The hard work pays off
Sound data management is essential and useful, and can help RM executives in a range of ways. Some of these are:
1. Up-selling: The focus is on strengthening data-driven pricing and merchandising to optimise RevPAR. Revenue managers have started relying on analytics to serve appropriate offers at various stages of a traveller’s journey, right from the moment a booking is finalised till a guest checks-out. On the role of analytics in up-selling strategy, for Kapur it is unfortunate that what we see today is again very transactional (initiatives) with perhaps just a small amount of customisation. “I only say this because in my experience the customisation is very generic and not fully integrated to a CRM,” he says. Kapur also finds the ways offers appear, questionable. “Ideally, why should offers begin when I make a booking? Why don’t offers begin when I start the shopping process?”
2. Demand forecasting: Data management is always needed to play its part in demand forecasting. Having current and reliable data at your fingertips is imperative to having a good understanding of what will happen in the market and how your hotel should position itself.
3. Rate Opportunities: Data helps in finalising need periods and hot dates. It paves the way for benchmarking of a hotel company’s rates against other players.
4. New systems/ solutions: RM executives have already done or are strongly considering the introduction of an automated forecasting/RM system. The ever-increasing power of analytics in computing is playing its part. Also, automated systems simplify data crunching as the process is automated. This frees up the hotelier’s time and enables one to focus on long-term business strategies or accomplish other tasks that required involvement or attention.
The crystal ball
Going forward, RM executives should focus on integrating multiple data streams into a single integrated framework. This way much sought after customer centric revenue management will become a reality. Also, if approached methodically, then it can be executed in a consistent manner rather than implementing it on a one-off basis and losing any potential benefits. This also supports a reliable structure for looking at the business, in terms of segmentation, and trying to optimise revenue performance.
Ash Kapur, vice president - revenue management & distribution, Starwood Capital Group, will be speaking at the Travel Distribution Summit, North America which will take place in Chicago, September 23-24.