5 features to look for in a benchmark tool for the hotel industry
As revenue managers, it’s likely you are always on the hunt for strategies that can give both your revenue a boost and your hotel a competitive edge over similar properties in your market. But doing that is not easy.
Especially in a fiercely competitive landscape.
How do you stand out? How do you measure your success?
In the wake of unprecedented change within the hospitality industry, one aspect of hotel revenue management that has become increasingly important is benchmarking. And doing so effectively.
What is hotel benchmarking in the hotel industry?
Effective benchmarking helps you to understand where you stand in the market, identify gaps in your hotel’s strategy, and to discover opportunities for growth and profitability. Benchmarking data is used by all stakeholders in the industry; from hoteliers to management companies, owners to asset management companies.
The purpose of hotel benchmarking is to allow hotel operators to assess their performance relative to their compsets, and within the overall hotel market.
By benchmarking, hoteliers can gain insights into their brand’s strengths, weaknesses, and areas of improvement.
It allows them to spot trends and growth opportunities, set realistic goals, and measure performance over time in order to make informed decisions that will optimize revenue and enhance their overall profitability.
The future of benchmarking in the hotel industry
But, the hotel industry is a complex maze of changing customer preferences, dynamic pricing, and ever-evolving digital marketing techniques. Revenue managers are constantly grappling with these challenges, trying to make sense of the chaos, and strategizing for success.
In this fast-paced environment, benchmarking has become more than just a handy tool; it's also part of the roadmap toward profitable decision-making.
Not all benchmarking solutions are created equally, however. With several hospitality benchmarking tools out there, how do you choose the right one? In this blog, we’ll explore five key features to look for in a competitive benchmarking tool for the hotel industry.
1) Data Quality and Relevancy
The effectiveness of benchmarking hinges on the quality of the data used and how accurately it reflects your market. It's essential to invest in a tech solution that gathers relevant, high-quality data efficiently and presents it in a simple and timely manner.
By using a benchmarking tool that constantly refreshes and offers a clear view of the entire market, you can ensure that you are using data that you can trust and that will yield valuable results.
There are a couple of areas worth noting when it comes to the reliability of the data you are using to benchmark.
Firstly, how often is it refreshed? Ideally, your benchmarking provider should be delivering data sets that constantly refresh and provide real-time intelligence into what is happening in your market and within your compset. Stale, outdated data can only lead to less accurate decision-making.
Secondly, how comprehensive is the data set on which you are benchmarking? Ensuring your data is diverse and free from gaps or blind spots is of utmost importance to guarantee that your benchmarking efforts are worthwhile.
The most effective tools offer high-quality, relevant data that accurately reflects your market. This means comparing your hotel's performance against a diverse mix of competitors, spread across various market areas, including different brands, chains, independent hotels, star ratings, alternative lodging, room counts, and price ranges.
The data composition of your market mix should also be representative of the actual hotel supply in your market. For instance, if your market has a significant share of luxury hotels, your benchmarking tool should reflect this reality.
Accurate data forms the basis for fact-based insights and recommendations, fostering confident decision-making. It also safeguards against the risk of incorrect analysis stemming from incomplete data, lending credence to the conclusions drawn from your benchmarking efforts.
You can gain accurate insights and make more informed strategic decisions by ensuring data quality and relevancy.
2) Data granularity and actionable intelligence that drives decisions
In the current market scenario, performance benchmarking is not just about gathering data. It's about delivering actionable insights that facilitate swift and strategic decisions.
Often, revenue teams approach a benchmarking tool with specific queries. For instance, you might be wondering why a competitor has sold out or implemented a Length of Stay (LOS) restriction. However, the sheer volume of data to organize and then analyze can make deriving meaningful conclusions a prolonged process.
Given the staffing constraints many hotels face, there isn't enough time to collate relevant data promptly and conduct comprehensive analyses without encountering hurdles along the way. Analyzing large amounts of hotel data requires hours that many individuals in revenue management simply don't possess.
Your benchmarking tool should therefore be designed to save time you previously spent on consolidating and analyzing spreadsheets. It should efficiently deliver the crucial insights you need, utilizing the most recent data available, at a simple click of a button.
By offering insights, and not just raw data, an effective benchmarking tool should enable you to arrive at better strategic decisions, while giving you back valuable time to focus on other important tasks.
But just as easily as your benchmarking tool brings those key insights to the surface for you, it should also allow you to drill down into the data. The higher the level of granularity, the more you are able to understand both your market and compset performance and see what is driving each.
Whether it’s on occupancy, ADR, RevPAR, pick-up, or pace, your benchmarking solution should enable you to compare your hotel to both your compset and the overall market, using a variety of metrics and segments against points in the past, while using similar forward-looking data points to ensure you are in line with the rest of the market for future dates.
With granular insights into all aspects of your hotel’s performance, be it groups or transient, channels or point of sales, cancellations or length-of-stay restrictions (lead time, stay date, LOS, booking window, guest country, channel are some of the other points of comparison to take note of), you will be able to identify exactly where you are underperforming or over performing against your market and compset allowing you to develop targeted strategies for growth.
3) Intuitive interface
Being able to derive more insights with less analysis largely depends on the usability of your benchmarking tool. In today's tech-driven world, a benchmarking tool that provides a lightning-fast system with an easy-to-operate interface is a must-have.
The goal of benchmarking should always be to bring actionable data to the surface in a timely, efficient manner so that decisions can be made at the right time.
Unfortunately, many tools on the market suffer from poor user experiences due to clumsy interfaces and an over-reliance on spreadsheets, making the time to insight unnecessarily long. These issues, coupled with slow loading times and non-intuitive designs, can make the process of benchmarking frustrating and inefficient.
However, the ideal benchmarking tool offers an intuitive user experience that is easy to learn and allows users to do more with less so that managing multiple properties becomes a streamlined and effortless task, and clear visual insights enable better communication across internal teams, owners, and other key stakeholders.
4) How does it integrate with your other BI tools?
In today’s reality, a data-driven revenue strategy is at the heart of a successful commercial strategy.
With many revenue teams having to do more with fewer resources, it has become even more important that the tools that support you, enable you to bring all aspects of your hotel’s revenue strategy together under one seamless commercial platform.
This means your benchmarking tool should integrate seamlessly with your existing business intelligence (BI) tools, to form a single comprehensive commercial platform and not merely as a standalone product.
Such an integrated benchmark tool becomes a one-stop-shop for your revenue management strategy, centralizing data and insights from various sources into one accessible interface.
Eliminating the need to switch between multiple platforms or systems greatly simplifies your day-to-day operations and facilitates smoother workflows. Commercial teams have key insights into their revenue, distribution, and market performance and can make relevant actions to ensure their KPIs stay aligned.
Consequently, it optimizes efficiency, enhances decision-making, and empowers teams to focus on strategic initiatives rather than grappling with disjointed data, thereby significantly simplifying their daily tasks.
5) Fast and easy to use with a high level of support
Getting your benchmarking tool up and running to meet your needs can be a complex process. It relies heavily on smooth integration with your Property Management System (PMS) and a fast, easy onboarding process.
While some systems may offer rigid and limited integration options, necessitating manual uploads, CRS feeds, or limited PMS integrations, the ideal solution should provide some flexibility.
A smooth onboarding process is another crucial component to consider. It ensures that you can quickly familiarize yourself with the new platform, reduce the learning curve and be up and running with minimal time and effort from your side.
However, even the most user-friendly systems may require support. That's why it's crucial to also factor in the level of customer support you will be receiving when choosing your benchmarking tool provider.
Ideally, customer support should be readily available whenever you might need assistance to ensure you get quick and helpful responses with minimal waiting time and fuss.
In the fast-paced and competitive hospitality industry, hoteliers are constantly on the lookout for tools that can assist them in making well-informed decisions and enhancing their business performance.
The industry is continuously evolving - the influx of data coupled with advanced analytical tools is ushering in a new phase of revenue management.
Navigating this data-dense landscape calls for tools that can efficiently sift through the data, providing clear and actionable insights while also ensuring a high return on investment. Such tools should be able to drive key performance indicators like occupancy rates leading to overall improved performance.
In anticipation of the future of benchmarking, OTA Insight has introduced free beta testing of its new tool, Benchmark Insight.
This tool is designed to equip you with actionable intelligence that can shape strategic decisions and offer a deeper comprehension of your hotel's market share. With this solution at your disposal, you are better positioned to understand and navigate your marketplace with clarity and confidence.