Big Data and Hotel Revenue Management

from Gut Feeling to Facts Based


More than ever, Big Data is a core subject in the Hospitality industry.

The concept is anything but new, but the fact is that right now nearly everybody is talking about it, even though only a few are truly leveraging it. For many people, the notion of Big Data is still unclear and consequently there are many unappropriated definitions on the term.

This is creating a strong complexity perception around the concept, driving many hoteliers to get defensive towards the Big Data adoption. Therefore, instead of embracing the opportunities that it may bring, they get comfortable on the prejudice of it being functional to big companies, hotel chains or properties with highly skilled resources only.

Big Data are massive quantities of data coming from both internal (PMS) and external sources, heterogeneous and inconsistent, linked to one another in a very complex way.

To manage this complexity, quality and accuracy become priorities, and these can be reached through technology.

Accuracy is the backbone of Revenue Management, and it comes from data. Through data, when coming from both internal and external sources (Big Data), we can work on personalization, segmentation and forecasting.

Big Data provides reasonable answers to our questions, and the answers to those questions we still do not know we can make.

The learning process is like the one of a little baby making questions based on what he/she observes: after receiving the answers, he/she elaborates on new facts and brand new and more complex questions naturally arise.

This universal knowledge-acquisition process applies to any business, regardless of the size or the type of management – as such, the Hotel’s size or managerial style (chain or independent) are irrelevant.

Independent hoteliers still ask: how to leverage Big Data and where to start from, if the skills and competencies are missing within the team? As anticipated, technology plays the key role of translating complexity of data into useful, readable and actionable insights. The amount of information provided by these insights can be huge, but Big Data goes with Big Priorities – the usage must be scaled to the reality where Big Data is being implemented, following 4 easy steps for a gradual introduction:  Setting goals and making questions, evaluating possible answers to those questions, setting priorities, making new questions and tapping into new possibilities.

One of the first questions that any Hotel should make is – can I afford not to do it?

Very frequently, Hoteliers get cozy in their comfortable zone and their stable or slightly growing financial performances. The limit is comparing ourselves against our same own past performances, without looking at a bigger picture that could provide extremely valuable information regarding our market, customers, competition and demand. This valuable information would change the way we run our business by making us make new questions and see new revenue opportunities that we did not think were possible before.

Through this kind of information, we are able see beyond the concept of “demand” related to our own demand only and we translate it into a more fluid and enlarged concept of “total demand” that may not be ours yet, but that we can eventually capture by changing the way we run our Hotels. The focus is to be aware and on top of every phase of the customer acquisition and purchasing process, to capitalize on it and drive the best possible economic return: the best possible RevPAR.

Big Data and Technology are changing the way we are doing Revenue Management, making the traditional definition of “selling the right product, at the right time, to the right customer, for the right price” quite obsolete if not linked to the other definition about Revenue Management being the “art of optimizing demand and availability of product at the micro market level and through all market conditions”. The market conditions are provided by Big Data.

Today’s competitive landscape in the Hospitality industry is fiercer than ever: new distribution channels and alternative types of accommodation are making our positioning very fragile if we do use the right weapons – data and knowledge – to survive, emerge and finally break down the wall of the “Data Divide”.

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