Soft ware Solutions

Using data to maximise occupancy

Data analytics has long been the bedrock of good management in most industries including the hospitality industry, but we are entering an era of digital transformation with business intelligence in the hotel industry. When you think about the volume of data gathered in most accommodation businesses it has become impossible to manage this information manually or by simply using spreadsheets now.

The list of available metrics is almost endless and it’s not just your own business that you should be looking at. Hotels operate in a highly competitive environment. So eff ective data analytics includes information on both your own performance and that of your competitors. So, what types of hotel industry business intelligence are going to help you to maximise occupancy and increase revenue?

First of all, we need to understand how you actually calculate your hotel occupancy rate.

How do you calculate occupancy rate?

Occupancy rate is the percentage of occupied rooms in your hotel at any given time and is one of the most simple but vital pieces of hotel business intelligence you have at your disposal. It is calculated by dividing the total number of rooms occupied, by the total number of rooms available and multiplying by 100 to give you a percentage. Analysing the occupancy rate by room type allows you to discover what room types outperform others and what room types you have the opportunity to fi ll.

Sylvia Johnston,

Senior Executive, HiRUM Soft ware Solutions

Factors aff ecting hotel occupancy rates

There are obviously many diff erent factors that could aff ect your hotel occupancy rates but one of the crucial factors that many overlook and that can help set you apart is being able to understand not only your own data but that of your competitors too. If you keep a close eye on the following hotel industry business intelligence metrics and adjust accordingly you put yourself in the strongest position to be able to fi ll as many rooms as possible, as profi tably as possible.

Pricing strategies

Understanding revenue performance and the impact of pricing strategies can be time consuming and complex if you don’t have eff ective hotel business intelligence soft ware to capture, analyse and simplify the data. Being able to accurately predict the demand for rooms means that you can price eff ectively. Intuitive pricing is also vital to ensure that your rooms are always listed at the best price, adjusting rates and closing out channels based on your performance. The revenue management business intelligence metrics that are really going to be vital in helping you achieve this include the average daily rate (ADR) and revenue per available room (RevPAR). Let’s take a look at RevPAR in a bit more detail.

Revenue per available room (REVPAR)

This is considered by many in the accommodation industry to be one of the most important hotel business intelligence metrics. Understanding RevPar helps you to maximise the revenue generated per room. RevPAR is calculated by using the Average Daily Rate ($) and dividing this by the Occupancy (%) to understand how to eff ectively price available rooms. It’s even more valuable if you can compare RevPAR against competitors so that you can adjust your pricing in line with the market. However, consideration needs to be taken when working towards improving your RevPAR (att racting more guests/higher occupancy) as the goal should be to improve fi nancial performance overall. So, you need to keep in mind that more guests oft en mean higher costs involved with accommodating them.

Distribution channel analysis

Understanding which of your marketing distribution channels is delivering the most bookings and which are under-performing can ensure that you focus your marketing budget eff ectively. You should also be paying close att ention to the distribution cost of each channel e.g., commission and taxes.

It’s important to recognise that identifying where the greatest number of bookings are coming from and the most amount of revenue can oft en diff er. Ensure that distribution channel analysis is built into your hotel business intelligence metrics so you can unlock insights into the revenue that is generated from specifi c sources and develop a greater understanding of how this impacts your bott om line.

Customer profi ling and segmentation

Digging into the data you hold about your guests can help you create a ‘target profi le’ which, in turn, enables you to identify more of your most profi table customers. This can include looking at your business intelligence related to your visitor geo-location, demographic profi le e.g., age, family status etc., the number of returning customers and preferred room types. Eff ective customer segmentation means you can create targeted marketing campaigns that avoid budget wastage.

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