We’re back from a busy week in Toronto talking all things Artificial Intelligence and Data Analysis!
At the Revenue Optimization Conference, held as part of HSMAI’s Commercial Strategy Week in conjunction with HITEC, the vibe focused on how an influx of readily available data is leading to modern approaches to revenue strategy.
In a panel discussion titled, “Beyond the Rs: Revenue Strategy is More than Rooms Revenue, Rates, and RevPAR,” Jenna Villalobos, Senior VP of Commercial Strategy at Outrigger Hospitality Group, and Kathleen Cullen, Senior VP at PTG Consulting, shared a wealth of best practices for moving from a revenue management approach to a more holistic revenue strategy.
Villalobos and Cullen suggested one of the biggest challenges to modernizing your commercial strategy is getting all the key stakeholders – management, ownership, asset management – aligned. Beyond that, challenges include:
- An overreliance on Excel spreadsheets
- The inability to adapt to new strategies versus doing it the way it has always been done
- A lack of understanding of the importance of all the systems needed to implement an effective revenue strategy.
“There’s too much emphasis on Excel. I really hope we never have to take time again writing pivot tables. Let the systems serve up the information you need,” Villalobos said.
“Someone that is great at Excel does not always make a great revenue strategist,” Cullen added. “They need to be able to look beyond the traditional revenue streams, understand what data is needed across the organization, from digital to revenue to sales, and understand how all those functions operate together to drive revenue.”
Another frustration for both Villalobos and Cullen is the constant focus on performing to a budget that was set months ago. Instead, the goal should shift to outperforming the market in its current state, they both agreed.
“Many of us do these budgets 16 months in advance for the month… and we’re incentivized on that,” Villalobos said.
On the opportunity side, Cullen said there’s much more data available today for owners and operators to make more profitable decisions. New KPIs like Net Profitability – understanding the flowthough of revenue from different sources to the bottom line, after expenses – should help boost profitability.
“We can get a better understanding of everything that it is costing you to get that business, including costs that don’t always show up on the P&L,” Cullen said. “For example, you can better determine what your revenue would have been if the rate wasn’t booked through an OTA.”
Finally, the pair suggested revenue leaders today must do more than just present the data, but be able to explain both the “why” and the “what it means.”
“We call it giving traffic and weather, and that doesn’t tell us anything,” Villalobos said. “If we just show a huge screen of data, it’s not going to mean anything.”
From Analysis to Insights
On that exact note, Taneka Coates, Director of Global Revenue Management Analytics at Marriott International, led a presentation titled, “Translating Complex Analysis Into Data-Driven Insights” that unpacked how to move from reporting to analysis.
“You can have tons of data, but you’re looking for that one data point – that one actionable insight – and it can take a while to get there,” she said. “This is the type of analysis that informs strategic decisions.”
Coates outlined the key questions that need asked when setting up a data analysis project:
- Who is your audience? Who are your stakeholders and who’s asking for the analysis?
- What is the business question we’re trying to answer?
- Where is this data going to lead us? How is it going to shape how we operate in the future?
- How do your stakeholders want to view the data?
- When are the realistic time frames for delivering this data?
She suggested that the keys to a successful data analysis strategy are constant communication and partnership throughout the organization, as well as proactive setting of goals, expectations and timelines.
“It all starts with data governance to make sure the data is clean. Quality matters,” Coates said. “Remember that you can’t boil the ocean. Sometimes more data does not mean more insights.”
HITEC Showfloor Abuzz with AI
It should come as no surprise that AI dominated discussions at HITEC as more and more hoteliers are tapping into AI as a way to increase productivity. While there’s some level of skepticism, it was clear that many industry players behind the scenes are adopting generative AI in some form or another.
Hotel News Now picked up on the trend and editor Sean McCracken recapped a HITEC panel about the positives and potential pitfalls of AI here. In the article, Tata Crocombe, executive chairman of Aitutaki Lagoon Private Island Resort at The Rarotongan Beach Resort, said he constantly uses ChatGPT for ideation and has greatly increased productivity both for himself and his staff. He’s given presentations to all of his employees and while he doesn’t require them to use the technology, he has observed a significant increase in productivity among those who have, the article says.
Skift also published a HITEC panel recap that focused on personalization, an area hoteliers have been laser focused on but have run into roadblocks, namely integrations and data sharing. One brand leading the charge is Mandarin Oriental Hotel Group, according to Skift, which has been “implementing technology to track activities of top guests – like when they check in or make a restaurant reservation – so hotel staff can then provide a higher level of service.”
Recent advancements in AI should improve the ability for operators to achieve a “complete guest profile in order to customize services based on specific customer interests,” the article suggests.
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