The Transformative Power of Business Intelligence in the Hospitality Industry

One of the digital transformation paths in different sectors, including tourism, is data analytics. And it’s no different when it comes to Hospitality. The hospitality industry, by its very nature, deals with a lot of details. Stock to Sales report, consumer activity data & housekeeping reports are a few. Monitoring such humungous data becomes difficult as an organization grows.   

The aim of business intelligence (BI) is to collect and comprehend data. It converts structured, unstructured & unclean data into actionable insights.    

Any internal or external framework that has valuable data about the company is a data source. The key source of data in the hospitality industry is Property Management System (PMS). Its components are Revenue Management System (RMS) or a Central Reservation System (CRS). If you look at the whole industry, various types of PMS structures exist. Some hospitality businesses may need a separate module combining it with RMS. Data models can vary as per different domains in the hospitality industry. Some BI tools are as follow:-  


  1. ETL (Extract/Transform/Load)

    These are tools that help to extract, transform, and load data. It is cleaned, fused with metadata, and organized so that the system and its users can understand it. This section of a BI system sends data from one system to another. 


Data lake/warehouse

BI systems need dedicated storage depending on the operation and volume of data. Warehouses and data lakes are two types of storage designed to handle vast amounts of data. 


  1. User Interface and Business Intelligence

    Finally, user interfaces display the results. We can use these to query

  2. and also provide visualization results. To produce graphics or reports, BI usually works with historical details. In some situations, such as streaming data from IoT devices, real-time data is displayed.  


The use cases of BI in the hospitality industry are quite endless – and positively impact the bottom line. Some examples are as follow:-  


  1. Customer Segmentation 

Hospitality looks for a one-of-a-kind approach to every client. Demographics, geography, etc., help to segment visitors. Data flows from website bookings, POS device orders, CRMs, and various other resources. As a use case, customer segmentation enables targeted offerings. It also allows one to take advantage of new customer service opportunities.  


  1. Reservation analysis 

The occupancy rate, indicating the units occupied, is a key matrix in this industry . Using occupancy patterns, from your PMS, you can identify the factors influencing them. Such empirical data enables you to make predictions for the future. For instance, one can analyze the impact of Seasons, Festivals etc. on reservations. It enables businesses to optimally price their offerings while maintaining profitability levels.   


  1. Distribution channel analysis  

Indirect Channels of partnered distributors communicate with channel managers at hotels. Channel managers consider various costs viz. commissions and taxes etc, when selling rooms via indirect channels. BI offers visibility into the revenue produced by each channel. Thus, it’s easier to understand each partner distributor’s contribution to your business.  


  1. Competitor overview  

Hotels are in a competitive market. As a result, it’s essential to know what the rivals are offering to consumers. Hotels may obtain market data in various ways. By using data from market consolidators or scraping the prices of their competitors. In any case, BI can give a hotel a strategic edge by optimizing pricing and marketing strategies.  


Despite the benefits BI can bring to the hotel business, there are some challenges too. Some of them are as follows: 


  1. Determining the right data  

Each Hotel brand aims to provide a superlative, consistent & memorable Guest experience! 

However, Hotels have several departments & software systems. Each system stores guest engagement information in varying formats & individual silos. Currently, collating right data across geographies, teams & systems is painstaking and error prone. 


  1. Integration issues  

Business Intelligence refers to software capabilities built into the company’s internal infrastructure. BI extracts necessary data from its source and implements transformations. It uploads processed data to produce reports and visuals on the dashboard.  


To sum up, Business Intelligence in the field of Hospitality has many applications. Organizations’ bottom line have been boosted by ~14% through Babel’s ISDA BI platform. 

Reach out to us here to learn how your Hotel can benefit from BI as well!