Ms. Farley


The Democratization of Sophistication in Hotel Technology

By Tammy Farley, Co-Founder and President, The Rainmaker Group

Accurate, timely data is crucial to making decisions that drive revenue. Yet while technological advances make it possible to mine more data than ever before, the prohibitive cost of such solutions have made them feasible only for the largest and most prosperous organizations, leaving some of the most critical information out of reach of the majority of hoteliers. Now, new technologies are disrupting established markets, offering affordable, more flexible analytical capabilities to operators for whom they were previously either out of reach or could only be accessed through their parent brands. This is an important trend in our industry - we call it "the democratization of sophistication" -- and it's enabling revenue managers to revisit conventional revenue management ideas.

From Revenue Management to Business Intelligence

Over the past two decades, the hospitality industry has increasingly adopted the use of revenue management systems. However, the ability to predict trends, as revenue management processes do, is no longer enough. To prevail in today's competitive market, hoteliers must understand what's behind those trends. And that requirement has led to the rise of new, revenue-focused business intelligence platforms.

Business intelligence tools automate the complicated and time-intensive process of retrieving and analyzing hotel performance data from multiple sources, and deliver those insights to decision-makers in the form of intuitive dashboards and daily reports. Drill-down capabilities enable users to "slice and dice" data at whatever level they choose, enabling them to quickly and accurately pinpoint the issues affecting performance numbers and make timely, strategic decisions that drive revenue.

When a system gathers data at the most granular possible level (such as rate code), users are able to identify the root causes of the trends that they see in their revenue management forecasts. As the following examples show, these underlying causes - once uncovered - are frequently surprising:

  • Identifying Producing and Non-producing Accounts - Performed at the individual rate-code level, a complete analysis of historical performance can determine, for instance, that an account is producing high volumes of room nights or revenue but only on sold-out nights, potentially displacing more profitable business.
  • Evaluating and Modifying Promotions - Promotions can be an effective tool to stimulate bookings, but too often they cannibalize demand instead. If, for example, a hotel's 14-day advance purchase product is being booked exactly 14 days prior to arrival, it may be a sign that existing bookers are trading down to the lower rate. Moving the term to 21 days could solve the problem.
  • Analyzing Source Markets - This enables revenue managers to compare year-over-year pick-up by source market - a significant benefit to independent hotels that have to invest marketing dollars directly. If the data shows a drop in production in one particular market, the hotel might change its marketing strategy in that market; if the drop is caused by economic or other factors outside its control, it might redeploy those marketing dollars elsewhere.
  • Analyzing Channel Profitability. The proliferation and growing complexity of distribution channels makes this a tough area for hotels to manage. When users can aggregate up to the channel level, comparing marketing investment against production they can determine which channels are most profitable for their hotel.
  • More Granular Pacing Analysis - Pacing analysis, or how bookings are picking up for a particular future arrival date, can be performed at a far more granular level with business intelligence, providing hoteliers with insights that are actionable to a surgical level of precision.
  • Identifying Anomalies - Revenue managers can use business intelligence tools to pinpoint irregularities and their sources. For example, they can identify not only when a rate code's ADR drops but drill down into the individual rate code to ascertain if the drop was the result of human error - an easy fix - or another cause.

Why Now?

The benefits of revenue management-focused business intelligence are obvious - so why have they not been adopted to the same extent as revenue management systems? The short answer is cost. Business intelligence has historically been expensive, so platforms were originally developed as in-house solutions for large corporations who could afford the considerable investment and the complex process required to install and support such a system.

Within the hospitality industry, that left such solutions accessible only to the most deep-pocketed franchisors. That created two issues: first, there was no good business intelligence solution for independent hotels. Second, branded hotels depended on their brands to provide systems, meaning that the franchisors, in turn, controlled the way critical data was presented to their hotel operators. For operators of multi-chain portfolios, that often meant dealing with inconsistent data and platforms that made it difficult to compare performance across properties.

More recently, business intelligence developers have introduced out-of-the-box solutions that are highly flexible, far more affordable, and much easier to implement than their in-house predecessors. This, combined with the advent of cloud technology, has revolutionized the market. Sophisticated, new cloud-based analytical tools can put actionable insights directly into the hands of hoteliers who previously could not afford them. Those same multi-chain operators who once struggled to integrate information from incompatible systems now can easily evaluate revenue-oriented data across their entire portfolio, regardless of brand or PMS.

Market Data is Also Becoming More Sophisticated and Affordable

It is not just hotels' internal (e.g., PMS) data that is being made available for more sophisticated and customized analysis than ever before. External data sources are improving markedly too. Important data points like Smith Travel Research (STR) are a natural addition to deeper revenue management analysis. But it is hotel rate-shopping that is changing rapidly, both in terms of technology and process.

Rate shopping is an indispensable piece of the revenue management process, as the distribution landscape becomes more complex. Rate-shopping tools, too, have become more cost-effective even as they increase in sophistication, offering hoteliers more accessible, flexible alternatives to the powerhouse incumbents that have until recently dominated the market. Developers are continually introducing new technology to streamline the rate shopping process, making these tools simpler to use as they deliver ever-broader and deeper information.

Rate shopping helps to drive profits by enabling revenue managers to better understand their own property's position within its competitive set. It helps them to set prices more strategically and establish rate parity across OTA channels. The most effective rate shopping tools are those that gather data from hundreds of branded sites and OTAs and deliver it to hoteliers in user-friendly dashboards, reports and data downloads. The technology employed by the newest tools is more approachable than it has ever been, making it easy to meet a property's unique needs.

Intuitive User Interfaces for Easy Navigating

The rise of the smartphone has changed the way that we view user interfaces - raising our expectations of the user experience. Think finger swipes, hover-over capabilities, pop-up menus, and definitions and hot links that provide information without requiring the user to leave the interface. Rate shopping tools should work in the same way so that revenue managers - even those who are first-time users - will find they can get up to speed quickly with new technology without the need for an extensive and time-consuming tutorial.

As systems move to the cloud, they put powerful technology within reach of any organization, increasing the ability of smaller operations to compete. With no more need for installation to a physical drive, cloud technology enables automatic, maintenance-free updates, ensuring that revenue managers always have access to the latest software innovation. This benefits productivity as well as costs, which in the case of adding new software to a legacy platform can be surprisingly high.

Your Data, Your Way

The most advantageous rate shopping tools are customizable, enabling revenue managers to modify their comp set, filter displays and channels, and tailor metrics at will. Users should be able to customize both the information they receive and the vehicle that delivers it. By adding and removing competitors as needed, revenue managers can assess varying scenarios in real time. Filtering displays and controlling the look of the data enables cross-sectional views of various business units. And with multiple reporting options, revenue managers can present everything from an industry overview to a granular perspective of their business.

The Provider as Partner

Beyond technological innovations, any tool - rate shopping or business intelligence - is most effective when its provider acts as a partner and problem solver rather than a salesperson and is invested in the client's success. Rather than push solutions that their customers don't need, providers who position themselves as partners spend the time necessary to understand what's important to a particular operation. They implement changes based on client feedback (which they actively encourage), respond quickly to any issues that arise, and make themselves available to resolve problems and answer questions long after the contract is signed.

As hospitality software developers further refine the technological tools available to hoteliers, solutions once accessible only to the prosperous few are now within reach of any operator who seeks a competitive edge. Managers at the property level can avail themselves of enterprise-level tools. Multi-brand operators once constrained by their franchisors can access consistent data across their portfolio. And as the march to democratization moves forward, producing ever more affordable, easy to use, and sophisticated solutions, the digital divide will only continue to shrink.

Tammy Farley co-founded The Rainmaker Group in 1998 and serves as its president. She spearheads all sales, marketing and customer-related operations for the organization, which is the market leader in profit optimization solutions serving the Hospitality Industry. Ms. Farley always goes the extra mile for a customer or a cause. She once walked 60 miles to raise funds for breast cancer awareness. At Rainmaker her expert stewardship, along with that of co-founder Bruce Barfield, has earned their company a spot among the Inc. 5000 fastest growing private companies for five consecutive years. Ms. Farley can be contacted at 678-578-5700 or Please visit for more information. Extended Bio... retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by

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