Spare The Spreadsheets
Give staff data they can actually use by adopting a business intelligence system.
By Adam Kirby, Associate Editor -- HOTELS Magazine, 5/1/2007
Although data-analyzing business intelligence software is yesterday's news in much of the corporate world, they remain an underused commodity within the hotel industry, despite the fact that few other sectors have more varied customer data to extrapolate and understand. Hotels have long kept detailed information on guests, but historically that data has been entered into massive spreadsheets that nobody ever read, let alone learned from. Business intelligence applications take those pages of dusty data and use it to gain a much-needed competitive advantage by finding patterns in customer demographics and tendencies. The big brands, particularly in North America, figured this out a few years ago, and now smaller hotel companies are beginning to catch on.Independent hospitality consultant Jon Inge says business intelligence tools have become "essential" to making sense of the reams and reams of guest profile data hotels are collecting. Unless the data collected is consistent-in terms of categories, currencies and the like-across departments and properties, it will not be meaningful. Given the relative standardization of product across the hotel landscape, understanding individual guests and providing the service they desire becomes even more important, and without software to make sense of the abundance of data hotels collect each day, a hotel simply cannot compete.
"Hoteliers want to be able to do a better job in creating 'wow' guest experiences," says Dan Connolly, an assistant professor of hospitality information technology at the University of Denver. "Anybody today can provide a hotel room, what differentiates their products is the employees' ability to use the information that hotels collect." As an example, Connolly points to a revelation in the retail industry, in which business intelligence helped grocers realize that men who bought diapers late at night tended to also pick up beer. One can only speculate on the reasons for this, but the trend was clear, and so stores began stocking the two products near each other to entice additional sales. "You want to find ways to put seemingly unrelated data together to find patterns and relationships that you might not find otherwise," and business intelligence is the way to do it, Connolly says.
Not All Look Alike
Business intelligence systems can vary dramatically in terms of complexity and capability, and a swath of seemingly unrelated software can reasonably claim to be business intelligence. Marketing automation programs, like those from Clairvoyix, enable hoteliers to create lists of guests based on factors like geographic residence or number of previous stays, while Datavision Technologies' flagship application creates automated nightly budget reports that track each department's efficiency. Systems from Statability more closely follow the classic definition of business intelligence, allowing users to slice and dice data and find correlations within customer demographics. New York-based Avero offers technology that automatically transfers raw data from multiple points of sale to a secure Web database. Avero's Slingshot system is designed specifically for multi-unit operators looking to eliminate manual data collection, and Slingshot customers can often expect to see a return on investment within about six months, the company says.
The best business intelligence programs, Connolly says, are able to pull together data and information from dozens of hotel departments and properties to display it in a way that makes sense, that is readily available and that can be easily manipulated in a multitude of ways. Execuvue from Aptech Computer Systems centrally compiles operational data internally, from affiliated properties and from external third-party sources like Smith Travel Research. Users can create and run queries on demand, a crucial feature because the information a hotelier wants today is not necessarily the same as he would want five years from now, as market conditions evolve. Aptech President Jay Troutman calls relevant data intersection "a moving target," and says the more detail that a hotel can computerize in a meaningful format, the better prepared it is for an unexpected event. Hotels that had business intelligence in place prior to 9/11 were able to adjust more quickly to refocus their marketing plans. "If you have good information and you know where to look, you can make decisions very fast," Troutman says. "If you do not have that, you are drowning in data and thirsty for answers."
Many business intelligence programs boast the added benefit of integrated accompanying offsite accounting systems. Web-based, centralized accounting applications like Aptech's Profitvue offer more security and backup than onsite servers or woefully outdated paper files, while also allowing for data consistency across properties and even brands. Consistency in tracking information, of course, makes finding patterns in the data that much easier. Moreover, Web-based data management systems mean one less hassle for stressed night auditors, says the Washington State-based Inge. "Hotels are not known for rigorously backing up their data, but with a centralized system that's done automatically," he says.
Business intelligence remains a somewhat novel concept in much of the European hotel sector, though basic data management applications, particularly Hyperion systems, are relatively common, says Mike Wrigley, a consultant with the UK-based Boss IT group. However, while it is not a hospitalityspecific system, the Vision Reporting spreadsheet application from Systems Union is becoming popular with some larger European management companies, Wrigley says. "As far as the big boys are concerned, they are doing business intelligence exercises, but none seem to be that happy unless they are going with Systems Union's Vision platform," he says. Unlike some newer business intelligence solutions, though, Vision requires extensive training, as its data is not easily manipulated. Also gaining traction in the UK hotel marketplace, Wrigley says, is the software suite offered by Visual One Systems, which was recently acquired by Agilysys. Using The Past To Predict
Software companies have begun marketing systems that to go way beyond simply finding hidden data correlations. Artificial intelligence (AI) technology gives computers the ability to identify past patterns and "learn" from them, to make short-term predictions about business levels.
One of the most advanced hospitality AI applications comes from Carnus Systems, which is beta testing its AI Scheduler at a handful of North American Fairmont and Hyatt properties. The Web-based Scheduler complements Carnus' 2-year-old Forecaster program, for food and beverage departments. Combined, Forecaster and Scheduler process dozens of factors- including occupancy rates, weather, time of day, even what sorts of conferences are in town- to predict how much F&B business the hotel can expect at any given time. The system then automatically creates a staff schedule based on its predictions, taking into account real-world employee issues like seniority, experience, time-off requests and manager preferences.
While comparatively basic revenue management systems can predict with respectable accuracy things like occupancy rates simply by tracking a handful of related factors, finding such linear correlations in the area of F&B has proven tougher. Although hotel general managers often quote the accepted standard of 30% occupancy-to-restaurant covers, occupancy is rarely a good predictor of F&B traffic, says Tim D'Auria, director of data analytics for Carnus. And while weather plays a role, tiny changes in temperature or humidity can affect F&B traffic dramatically, D'Auria says.
There is no limit on the number of variables that can be input. "There has never before been a forecasting product that has worked well in food and beverage because there are a lot of complexities that play a role in whether an individual client will decide to dine in the restaurant at a specific time," D'Auria says. "Some groups do not, by nature, dine out at a restaurant because they have a limited budget, while other people will dine lavishly." In other words, if a hotel is booked solid for a nearby youth hockey tournament, those guests might have different spending habits than, say, a conference of real estate investors. The Carnus software, which on average costs about US$15,000 for an annual subscription, takes all that into account.
Another player in labor forecasting is UniFocus, which markets the Watson RM Labor Management System used by more than 25 hotel management groups. Like Carnus, UniFocus uses AI technology to create matrices for the staffing needs of front office, sales, F&B and housekeeping. Watson also has the ability to automate labor scheduling, taking into consideration personnel qualifications, budgetary realities and union contracts. The use of a labor forecaster can actually reduce staff hours by as much as 20%, by eliminating redundant work hours, says UniFocus President Mark Heymann. "There is an ongoing defined shortage of labor, and you have got to find better ways to use the labor you have to be more efficient," Heymann says. Incidentally, UniFocus also recently acquired labor forecaster Labor- Sage, whose technology integrates with event order systems to schedule staff and supplies based on projected event needs. The software will be bundled with the Watson system to help streamline hotel conference and banquet needs.
Hotel del Coronado in California began using the Watson system in January and General Manager Todd Shallan figures it frees up about six hours per week for department managers to tend to customers, time that otherwise would be spent scheduling. Shallan lobbied for labor scheduling software at past hotel posts, but he never worked with it before. The technology is worth its weight in gold, he says. "It is not cheap, but now that I see it up and running, it is a real shame nobody before ever spent what it took to get it. It is going to pay for itself within the first year."
View All Blogs
