In the current hospitality landscape, hoteliers face the challenge of balancing rising costs and flatlining demand while still striving for profitability. In a recent webinar hosted by Otelier and Agilysys, experts discussed the critical role of business intelligence in navigating this challenge.
The panelists – Ed Nickelson, Director of IT at Pinehurst Resort; Niki Johnson, Chief Product Officer at Otelier; and Ravi Acharya, Senior Product Director at Agilysys – emphasized the need for a profit-focused strategy in a post-pandemic world, noting the growing importance of controlling expenses like labor costs, which have soared by 50% since 2019. With guest expectations on the rise, the panel highlighted how using real-time data from Property Management Systems and business analytics tools can help hotels maximize revenue and streamline costs.
Key Strategies for Improving Hotel Profits
- Labor Cost Optimization: As Nickelson of Pinehurst Resort mentioned, cross-training employees and retaining experienced staff are key to reducing labor costs. High turnover rates make it difficult to maintain service quality, and using labor data to make informed scheduling decisions can drive down expenses while maintaining operational efficiency, he said. "Since COVID, the biggest thing has been reducing turnover... cross-train your staff so you can cover more bases with the same people," said Nickelson, underscoring the importance of a flexible workforce.
- Forecasting & Demand Management: Otelier’s Johnson discussed the importance of leveraging forecasting tools to accurately predict demand. By using real-time data from PMS and accounting systems, hoteliers can make better staffing and operational decisions to match demand. “There's a lot of data out there, but it needs to be blended together for it to make sense. If we can use those insights to help staff get ahead of schedules and service guests more efficiently, it can greatly improve operations,” she said.
- Expanding Beyond Room Revenue: To drive profitability, the panel explored the idea of total profit optimization, where revenue streams from ancillary departments like food and beverage, spa, golf, and parking are analyzed for profit potential. Agilysys’s Acharya emphasized tracking customer lifetime value and analyzing guest spending across all departments, not just rooms. "Customer lifetime value is the key... it's not only about rooms, but understanding the guest's entire spend across the property," he said, highlighting the need for a more comprehensive view of guest behavior to uncover additional profit opportunities.
- Data-Driven Decisions Across Departments: Nickelson highlighted how a data warehouse enables a granular view of performance across departments, including food and beverage, golf, and spa services. This comprehensive approach allows for better strategic decisions across operations, driving both top-line and bottom-line growth. Using data across the entire hotel can help leaders react faster to shifts in guest behavior and demand, improving profitability in the process.
The conversation also touched on the role of accounting in measuring profitability, with Johnson emphasizing the importance of bringing both revenue and expense data into the decision-making process. By reducing manual data entry and increasing automation in accounting processes, hotels can free up time for staff to focus on guest experiences.
Want to learn more about how business intelligence can transform your hotel's profitability? Watch the full “Hospitality Business Intelligence Insights That Drive Profits” webinar replay to dive deeper into these strategies and hear expert insights directly from the panelists.