Business Intelligence in the hotel industry – Standardization as a quality feature

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Business Intelligence in the hotel industry – Standardization as a quality feature

October 26, 2020, In Fairmas Blog

Standardization – the heart of BI software

Summary:

Standardization is a quality assurance tool. Standards are created through consensus. The goal of standardization is to simplify and create comparability.

Due to the specifics of the hotel industry, the industry has developed its own standards to determine hotel success and to obtain reliable information regarding success factors, opportunities and risks.

Fairmas BI software is based on hotel standards. FairPlanner is a platform for all relevant information, displayed in ready-made analyses and reports. Moreover the FairPlanner , and at the same time provides future planning a plan for for all costs and revenues in advance.

The flexible adjustment of the level of analysis and report detail corresponds to the various information requirements of the hotel industry. This is whyTherefore Fairmas’ BI solutions can be used immediately in any hotel company, regardless of its size.

Standardization and the way things become standard.

Standardization is generally defined as unification. Almost everything can be standardized: Components, manufacturing methods, units of measurement, processes, services, etc. The advantage of standardization is the assurance of a certain quality standard.

The aim is to be able to compare things. However, an important prerequisite for standardization is always consensus. Without consensus, it would simply be a regulation. In other words, standardization is the agreement on a common, generally accepted and approved procedure or ancestry in the sense of “This is the best way”.

We all know the German Institute for Standardization association or at least the famous and globally recognized abbreviation DIN. DIN standards are created by groups of experts. Therefore, expert knowledge is required, and the standards are also regularly checked if necessary.

The benefits of standards and standardization

Probably the most important standard for the finance and controlling departments of the hotel industry, hotel owners and hotel investors is the USALI “Chart of Accounts”. USALI stands for Uniform Systems of Accounts for the Lodging Industry.

USALI  is one of the first industry-specific chart of accounts for the profit and loss statement created by hotel experts. By using these standards, national borders can be overcome. Borderswhich make it difficult to compare key performance indicators without prior standardization.

In addition to national- currency and language barriers, there are other distinguishing features that separate hotels. For example, the number and size of restaurants and bars, wellness facilities, hotel segments, booking portals, number of rooms, hotel category…The list of differences can be continued almost infinitely.

Setting the right switches here requires industry knowledge and practical experience in everyday life of hotel management.

Standardization with focus on hotel profit

The FairPlanner BI solution from Fairmas combines the advantages of a platform with the functions of financial planning and revenue monitoring. The integrated reporting system with ready-made analyses (management reporting) based on the standards of the hotel industry provides up-to-date information on the hotel’s success on a daily basis.

ALL ABOUT PROFIT – ALL YOU NEED – READY TO START

The Fairmas BI solutions are the platform for all relevant data required for 360° corporate management. This includes internal company data from the PMS, the accounting system, the ERP, revenue management and DMS, as well as external market data such as current prices offered by competitors collected by rate shoppers, historical hotel market data recorded and documented in benchmarking or event calendars.

The list of all Fairmas interfaces can be found here.

The comparability between hotels – The role of KPIs for standardization

The automated data integration via interfaces into the FairPlanner BI solution also sets the right direction. This control system of data allocation, which is individually tailored to the hotel company, is called mapping.

While mapping, the first question asked is which programs the hotel company uses and how the data in these programs are structured. For some hotel groups, the challenge already begins here when different accounting, PMS or revenue management systems are used in the group. In such cases, standardization for comparability begins with the integration of the data in FairPlanner.

The mapping process requires expert knowledge. No information must be lost. Incorrect mappings change the result.

After the data has been automatically imported, FairPlanner converts them into meaningful hotel key figures and provides information on the business performance of the company in ready-made reports.

The cost calculation of the hotel key figures (KPI), clearly and comprehensibly follows the consensus of the hotel industry to determine KPIs. Occupancy, ADR and RevPar are likely to be among the better-known performance indicators. However, these three values are hardly sufficient for forward-looking financial planning.

FairPlanner provides reports and analyses separately for each hotel segment, for freely selectable time periods, a pace analysis and much more, which is relevant to everyday hotel life. In addition, there is the option of consolidation at the group level, either separately by region, brand or individually identifiable clusters. This always involves the same data material. It is only compiled and prepared differently.

Standardization at all levels

This process, which turns the raw data stored in a variety of different programs into key figures, is completely transparent. Every process within FairPlanner remains traceable. This is an important and decisive advantage of the hotel-specific BI solutions without self-learning algorithms since they still often turn into a black box.This process, which turns the raw data stored in a variety of different programs into key figures, is completely transparent. Every process within FairPlanner remains traceable. This is an important and decisive advantage of the hotel-specific BI solutions without self-learning algorithms since they still often turn into a black box.

The advantage of FairPlanner lies in its flexibility.

Do you know the expression: “one size fits all”? This is almost impossible in the very heterogeneous hotel industry. Just think of the different requirements of owners, investors, management levels etc. for reports and evaluations. 

Thanks to FairPlanner’s easy-to-understand menu navigation, users can very easily determine which data they want to see and how they want it to be displayed. Whether brands are grouped into clusters, regions are combined or at the level of individual hotels. Everything can be determined flexibly.

Everything can be determined flexibly.

This is made possible by Fairmas’ detailed knowledge of hotel-specific processes and its willingness to literally offer its own “State of the art” standard of modern financial planning for the hotel industry through further development and functional expansion.