Business Intelligence for Hotels: Key to Your Success

Imagine a scenario where you’ve hotel management software that provides real-time insights, predicts future occupancy, determines how much hotel staff is required, and meets your guests' needs.

Don't you think managing your hotel becomes easier when every decision is backed by data.

From analyzing market trends to identifying guest preferences and creating revenue management strategies, hotel business intelligence uses a forward-looking approach.

More importantly, it helps you understand guest’s behavior so you can create data driven strategies to get the maximum revenue especially during the off season. So, you don’t have to spend hours extracting insights from huge datasets.

This guide will explain what business intelligence means and why it's important for you.

What is business intelligence in hotels?

Business intelligence is a game-changing tool for hotels and resort owners.

It extracts relevant insights on customer, operational, and financial data from various sources (online booking engine, reservation system, etc.) It then helps hoteliers make better decisions in the future.

By leveraging business intelligence software, data analysis becomes easier for you. This brings multifaceted benefits such as enhancing guest experience,improving operational efficiency and driving in more revenue for your hotel.

As the hospitality industry evolves rapidly and customer preferences change overnight, it becomes important for hotel owners like you to understand their preferences and make data-driven decisions.

Business intelligence tools also provide a breakdown of internal and external data and consider external trends to help you understand how your hotel is performing, where it stands, and what opportunities you can tap into.

Based on data analysis, you can create action plans to improve the performance of your property, which translates to more sales and revenue.

Moreover, hotel staff can save time and energy by not investing in manual reporting and operations, as business intelligence does the heavy lifting work of interpreting huge amounts of data and providing quality insights.

For instance – By analyzing booking patterns, hoteliers can create effective marketing strategies to attract specific demographics and tailor their services accordingly. This way, they can learn how to grow their hospitality business by tracking and meeting their guests' needs.

What's the need for implementing business intelligence in hotels?

Here's why implementing business intelligence is worthwhile for your hospitality business:

1. Make better decisions for your hotel

As hotels deal with enormous amounts of data every day, it becomes difficult to analyze such data and generate meaningful insights.

Whether you want to track your revenue metrics or measure your guest satisfaction score, business intelligence removes all the guesswork by focusing on the data. Thus, your decisions will be backed by data.

Let's say you want to evaluate the guest satisfaction metric and know how guests feel when they stay at your property. Through data analysis (guest reviews) and feedback management software (in-stay and post-stay surveys), you learn that 1 out of 10 guests was dissatisfied with your service.

But it's not always about making improvement plans when a guest complains about the service. It's also about doing your own analysis from data and extracting insights on what needs to be improved at your property.

It's also about deciding how you can save operational costs in the long run without affecting the guest experience.

In a nutshell, business intelligence tools make analysis easier by tracking KPIs such as occupancy rates, ADR, RevPAR, etc. Thus, you can assess the performance of your hotel from a bird's-eye perspective.

2. Helps you in competitor analysis

Business intelligence is valuable for competitor analysis, showing how nearby properties are performing and what market trends contribute to their hotel growth.

Analysis of competitor rates and their strategies helps you adjust your strategies accordingly. Let's say a hotel business intelligence tool gives you a walkthrough of your competitors' pricing strategy. You notice they reduced their prices to attract more guests during the slow season.

You might want to experiment with bundling your services and offering extras to guests. This way, you create a differentiating factor and need not worry about reducing your revenue.

3. Creates marketing and revenue management strategy

A revenue manager knows that any hotel becomes profitable with a good revenue management strategy. That's possible when they leverage business intelligence tools and data analytics.

These tools tell hoteliers how to manage resources, such as whether they should opt for understaffing or overstaffing during specific seasons so that their revenue won't decline.

As hotel business intelligence relies on existing data, revenue managers know how to price their products that customers love paying for. Should they go for a value-based pricing model or use a dynamic pricing strategy?

The BI system boils down everything to metrics by analyzing historical records, booking data, and competitor prices to provide you with the best price so you earn maximum revenue even when not operating at full occupancy.

It also provides revenue managers with a comprehensive view of whether direct bookings or those through OTAs are more beneficial for your hotel.

Then, they can tweak their revenue management strategy to determine whether they earn higher profits through OTAs or direct bookings. This way, the revenue team can focus on channels that drive more bookings.

For instance – When the BI platform predicts a major event happening around your hotel, it uses predictive capabilities to suggest raising your offerings so you can earn maximum revenue during that time.

4. Adapt to the latest trends

As the hospitality industry is progressing over time, hoteliers understand the importance of investing in business intelligence tools.

BI tools keep a note of the external trends that hotel owners can adopt to adjust their strategies accordingly.

For instance – If guests prefer bundled packages and most of their competitors are doing that, then the hotel owner would include such special packages to meet thetraveler'sdemands.

What are the use cases of business intelligence for the hotel industry?

Here are a few use cases of business intelligence tools for hoteliers-

1. Segmentation of customers

Knowing your guest's characteristics is important for enhancing their experience.  

Using hotel business intelligence, you can know your guests inside out.

Once you know your guests' characteristics such as behavior, demography, and geographics, you can fine-tune your services that specifically target them.

You can collect guest data from online sources such as POS purchases, bookings made on the website, CRM system, etc. Additionally, customer sentimental analysis helps hoteliers to improve their services based on guest feedback.

2. Understand the reservation behavior

The other metric is to understand the reservation behavior, meaning how many rooms were occupied during the specific time or season. What factors affected the occupancy rate in the past and based on that, you can make predictions in the future.

For instance – If you’ve insights into the occupancy rate, then you can decide which drives the occupancy rate. Whether that’s a seasonality factor, change in guest preferences or competitor marketing strategy.

Knowing those factors helps you understand the recurring behavior of potential guests.

3. Manage your revenue better

Making revenue management decisions is not a piece of cake, and if you think just relying on your GUT can take your hotel business to the next level. Then, you’re wrong.

Probably, your hotel business is running profitably as you find out the method of dealing with your guests and knowing what they want.

In the short run, it can work but in the long run, you can’trun your hotel business.

Through business intelligence and data analytics, hoteliers can make revenue management strategies based on historical booking patterns, market trends, and see what the most in-demand items/amenities that guests want.

By forecasting future demand for products/services, hoteliers can plan their resources accordingly and create better strategies for enhancing revenue. 

4. Analyse which distribution channel pays the best

With business intelligence software, you can identify the most profitable channels to drive bookings, where bookings come from (OTAs or direct bookings) and see which channels aren’t driving much revenue due to high commission rates. 

Then, you can compare the cost of running each channel vs the revenue generated.  

5. Helps in setting pricing strategy

Business intelligence helps in creating an effective pricing strategy by analyzing current market conditions, competitor prices, travel booking patterns, and seasonal fluctuations. 

As a hotelier, you don’t need to analyze heaps of data manually and business intelligence can be a game changer for you. It can identify the peak booking period and identify which type of travelers plan their trip during the winter season or summer.

For instance – you observed that business travelers plan their trip during the winter season and the demand for your accommodation increases during that time. The law of demand and supply works there meaning as visitors demand more, the prices would eventually rise. 

Business intelligence uses machine learning capabilities to monitor your data pattern and adjust prices in real-time. More importantly, it analyzes your guest spending pattern and where they’re coming from and then adjusts your prices accordingly.

What are the challenges of implementing BI in your hotel?

Although business intelligence for your hotel can be a game changer, it comes with various challenges which are as given below-

1. Is there a need to invest in BI?

Hotel business intelligence requires significant investment and to implement it successfully in your hotel operations, you need to convince your stakeholders first. 

Ask yourself – whether there’s a need to implement such technology in your hotel operations. Assess the pros and cons of such technological solutions. 

What’s your major challenge – do you want to improve your delivery processes, improve your guest satisfaction, or make better pricing decisions? 

2. Difficult to integrate BI with existing infrastructure

Many hotels use outdated hotel management solutions, so it becomes challenging for them to integrate business intelligence tools with existing software. Then, there are certain technology solutions such as PMS which don’t have open API access so third-party vendors can’t access it. 

How can BOTSHOT help you with making data-driven decisions?

Using our revenue management software ( RevMaxi), managing your hotel becomes a breeze for you. Its intelligent algorithms help you to keep an eye on demand patterns, competitor rates, and seasonal fluctuations so you can set the best possible price for your guest.

It has an intuitive interface which is super easy to use. The best part? It records every minute detail on the number of rooms sold and revenue generated from each room.  

Let’s say that your hotel experienced a drop in occupancy during the off-season, so our revenue management software can help you adjust your pricing strategy.  

It will automatically reduce the prices of rooms considering the seasonality factor, so you attract more guests during this season. 

Try our revenue management platform today and watch your revenue getting doubled.