Business Intelligence in the hotel industry

Home  >>  All news  >>  Business Intelligence in the hotel industry

Business Intelligence in the hotel industry

October 15, 2020, In All news, Fairmas Blog

What added value does BI provide in day-to-day hotel operations?

Definition and benefits of BI from the perspective of the hotel industry

Where does BI come from? – The origin of Business Intelligence 

Business Intelligence is not a new invention. The term was first used in 1958 by Hans Peter Luhn, a German IBM employee. However, the term that comes from IT is now omnipresent. BI solutions are now offered in almost every business area. With a simple Google search, you can find BI solutions for marketing, human resources, or shopping. However, what does BI actually mean? Does BI also include artificial intelligence (AI)? What benefit do hotels get when they digitize their revenue & cost planning and use a hotel-specific BI solution in the future? What should be considered when choosing financial planning software so that all of the different stakeholders in the hotel business receive exactly the information they need?

We want to answer these questions for you and start a small blog series for you. If we have aroused your curiosity and you would like to learn more about our financial planning software, please arrange an online demo appointment

What do we need BI solutions for? – How data becomes information for smart decisions.

Man has always collected information and used his acquired knowledge to (better) shape his future. At some point, programs in companies have taken over the collection and storage of information, however, with a small flaw. Different programs store information in other formats and at various locations. This disturbs quick and easy access to data. It is obvious that, especially in the very complex and highly dynamic hotel industry, in which revenue cannot be “caught up,” fast access to information is of crucial importance.

In addition, pure data says little about relationships and interactions. This requires the data to be processed into meaningful key figures in accordance with the problem at hand. The complexity of a new research question also requires a different data compilation.  That’s why a real BI solution for a better understanding of the analyses also includes an easily understandable graphical representation of the information in descriptive diagrams or graphics. 

Conclusion: A BI solution saves time and allows quick access to all decision-relevant information. The automated conversion into key figures and the data analysis, which can be flexibly adjusted according to the problem, saves costs while maintaining high data quality. The graphical representation, ideally with an integrated reporting system, facilitates the identification of opportunities and risks.

With the right BI solution, data can take over the control function. It provides information that supports hotel management in developing, implementing, and controlling the proper measures and strategies to ensure hotel success.

The advantage of a hotel specific BI solution – Why hotel software from hotel specialists?

This may sound banal at first, but the hotel industry is different from other sectors. The Hotel Association of New York City came to this conclusion back in 1926, when it developed the first edition of the Uniform System of Accounts for the Lodging Industry, USALI for short, more than 100 years ago. In the meantime, USALI has become a globally recognized standard, and the 11th edition is the worldwide basis of hotel financial planning.

The hotel industry itself has also changed and has become much more complicated. So it is evident that experts with extensive experience and a well functioning network are needed in order to know the different information needs of the different hotel companies and to be able to map these needs through a flexible and adjustable financial planning software.

Example: FairPlanner Dashboard for single property with GOP, NOP and GOI

Best Practice: Regional management of a hotel

As a leading indicator who always needs to know the current performance figures, the regional GM of a chain hotel ideally needs a daily performance overview of his/her hotel portfolio of the different areas (e.g., occupancy, lodging turnover, ADR, RevPAR, hotel turnover).

This means that without FairPlanner, the daily performance of each individual hotel is done in the manually created Excel spreadsheets, which are also merged into an overall view. This routine process costs, workforce, and time on a daily basis, and transmission errors can slip unnoticed.

FairPlanner automates and standardizes. With FairPlanner, the regional general manager has the choice of:
                 – Either briefly log in to FairPlanner and view the comparison of actual values with the budget,
                   forecast, and last year’s actual values in the dashboard at a glance.
                                    or
                  – Receive the desired reports automatically every day by e-mail.

The remarkable thing about it is that dashboard and reports are flexible and can be easily defined according to your specifications.

This simple daily performance monitoring is undoubtedly useful for corporate revenue managers, corporate finance / controlling, director of operations, COO, CFO, and CEO.

Tip: In uncertain times, the What-If* calculation is also recommended. Please read “Financial Planning during uncertain times.”

The efficacy of the cloud – anytime, anywhere – on a daily basis and overall

Anyone who works with Excel spreadsheets today knows that it involves high effort. Also, Excel spreadsheets have the disadvantage that they cannot be processed simultaneously. As the old version follows the new, it isn’t easy to keep an overview.

However, as COVID-19 recently painfully showed, fast and seamless cooperation is crucial when unforeseen events suddenly change the hotel market. Especially as even beyond a pandemic or natural disaster, short-term bookings (and cancellations) are part of day-to-day hotel life. Consequently, the solution lies in the cloud. Web-based solutions effortlessly overcome country-specific borders and promote collaboration.   

FairPlanner is web-based. Access to the program is regardless of geographical location. It can be centrally determined who can view or change which information at which site and in what level of detail. Thus, it is entirely in the hands of the hotel management to involve the managers of all departments and provide them with the information they need to make their contribution towards success.

Conclusion: FairPlanner improves communication and supports interdepartmental cooperation. Easy access to your objectives promotes personal responsibility and allows you to take prompt action in case of deviations. Also, the relevant information is not lost, and everyone is up to date.

Business Intelligence, Self-Service BI and artificial intelligence (AI) – differences and similarities

BI and AI are often mentioned in the same context. [1]  However, artificial intelligence (AI) refers to machine learning. This is where “self-learning” algorithms are used, which recognize reaction patterns based on acquired experience and provide recommendations for action. The methodology of BI and AI is the same. As a disadvantage of AI, the black box argument is often cited. 

FairPlanner belongs to the group of self-service BI solutions. The user-friendly and self-explanatory menu structure creates intuitive usability that allows even less experienced IT users to analyze complex data sets. For this purpose, FairPlanner provides a number of ready-made reports. Combined with a variety of flexible settings, almost any situation can be analyzed – regardless of whether FairPlanner is used in a single hotel or for a hotel chain with its hotel properties and managed hotels.

Conclusion: FairPlanner is the hotel-specific BI solution for the analysis, visualization, reporting, and monitoring of corporate data based on the hotel’s profit and loss statement. Automated processes and standardization guarantee high efficiency. The data generated enables you to make well-founded, transparent decisions at any time.

With FairPlanner, success is easier to plan – get to know us.

We are dedicated to supporting hoteliers worldwide with a hotel-specific financial planning solution for planning, budget, and forecast. FairPlanner is currently used by over 4000 hotel customers worldwide.

Arrange an individual online demo now