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General Manager: Don't trust your experience and gut feeling

20 April 2023
When the hotel industry took the first steps in revenue management, data became critical in calibrating rates and making better decisions. Revenue managers trusted data instead of experience and gut feeling. However, the traditional general manager was difficult to convince that data made a significant difference in the quality of decision-making. Working from the ground up during a long career had given the general manager a solid base of experience, and in combination with a gut feeling, there was no need for data.

Fast forward to today, general managers appreciate that revenue managers collect, compile, analyze, and provide information based on data. It gives the general manager a better understanding of what happened (monthly reporting) and what the future might look like (forecasting). However, many general managers still find it challenging to convince others that even they should use and trust data to improve decision-making. The main reason is that advanced data and analysis are not part of a general manager's DNA. However, this creates various problems when the general manager does not provide the necessary resources (people, systems, and tools) to maximize data-driven decision-making to grow revenue and maximize profits. Here is an extensive list of benefits a hotel would get if the management team started to take data seriously.

I never needed any data before

As a hotel general manager, you might wonder why it's essential to have access to and effectively use all this data. While it might seem like much work, leveraging data-driven decision-making can significantly impact your hotel's revenue and profitability. Here's how.
  1. Improved Pricing Strategies: With accurate data on customer booking patterns, market trends, and competitor pricing, you can optimize room rates, adjust pricing strategies in response to demand fluctuations, and capitalize on opportunities for higher revenue.
  2. Enhanced Customer Segmentation: By analyzing customer demographics, preferences, and behaviors, you can create targeted marketing campaigns to attract the most valuable segments, increasing bookings and revenue per guest.
  3. Better Inventory Management: Data-driven insights help you manage room inventory more effectively, ensuring optimal occupancy levels and maximizing revenue from each room type.
  4. Informed Decision-Making: Access to comprehensive data enables you to make strategic decisions based on facts rather than intuition, resulting in more efficient resource allocation and improved operational efficiency.
  5. Increased Customer Satisfaction: By understanding guest needs and preferences, you can tailor your services and offerings to create memorable experiences, leading to higher customer loyalty, repeat business, and positive word-of-mouth.
  6. Streamlined Sales and Marketing Efforts: Data-driven insights allow you to identify the most effective sales and marketing channels, focusing your resources on the activities that yield the highest returns.
  7. Reduced Costs: By identifying inefficiencies and areas for improvement, data analysis can help you reduce operational costs and increase overall profitability.
  8. Competitive Advantage: A data-driven approach equips you with valuable insights to stay ahead of your competitors, adapt to changing market conditions, and quickly seize new opportunities.
  9. Forecasting and Budgeting: Accurate data helps you make more accurate forecasts and budgets, ensuring you allocate resources effectively and set realistic targets.
  10. Continuous Improvement: Regularly monitoring and analyzing data allows you to measure the success of your strategies, learn from past performance, and continually refine your approach to maximize revenue and profitability.
In summary, adopting a data-driven approach in your hotel can lead to more informed decisions, optimized strategies, higher revenue, and increased profits. Although it may seem like a significant effort initially, the long-term benefits of leveraging data far outweigh the initial investment.

Someone will give me the information I need

As a general manager, it's natural to trust your team to provide you with the information you need. However, relying solely on manual methods like Excel might limit the insights you can extract from data and your team's efficiency. A long time ago, hoteliers had an unlimited queue of potential employees that wanted to work in the hotel industry. If someone did not do a good job, someone was always there waiting to get a job. Today, hotels cannot afford to wear out and alienate their employees because there is a problem finding people for all unfilled hotel positions. Instead, hotels need to care more for the well-being and development of their employees. The critical factor is to make the job exciting and rewarding by removing time-wasters and mundane tasks. Marketing, sales, and revenue management can provide more value to hotels when they become data-driven when making decisions. Here are some reasons why using an advanced data-driven approach can be more beneficial for your hotel.
  1. Automation: A data-driven system automates data collection and processing, reducing your team's time on manual tasks. This allows them to focus on strategic activities positively impact revenue and guest satisfaction.
  2. Accuracy: Manual data handling in Excel can be prone to errors and inconsistencies. A data-driven system ensures higher data quality, leading to more accurate insights and better decision-making.
  3. Real-time insights: Advanced data systems can provide real-time information, allowing you to respond quickly to changes in demand or market conditions. This can be a significant advantage in the competitive and fast-paced hospitality industry.
  4. Scalability: As your hotel company grows, managing data in Excel can become increasingly challenging. A data-driven system can quickly scale with your business, ensuring you continue to have access to valuable insights.
  5. Collaboration: A data-driven system provides a centralized platform where your team can access and share information, improving collaboration and aligning everyone toward common goals.
  6. Comprehensive analysis: Advanced data systems can perform complex calculations that are difficult or time-consuming in Excel. This enables you to uncover deeper insights and identify new growth opportunities.
  7. Customization: Data-driven systems can be tailored to your hotel's specific needs, ensuring you have access to the most relevant and actionable insights.
  8. Security: Advanced data systems provide better security measures to protect sensitive information, reducing the risk of data breaches. Managing and backing up Excel takes time.
  9. Continuous improvement: Data-driven systems enable you to track and measure the success of your strategies, learn from past performance, and refine your approach to maximize revenue and profitability.
While you may receive the information you need from your team, implementing a data-driven system can enhance the efficiency, accuracy, and insights available to you and your team, ultimately leading to better decision-making and improved hotel performance.

I trust my experience and gut feeling

While experience and gut feeling can be valuable in decision-making, relying solely on them may limit the potential for growth and improvement in the rapidly evolving hospitality industry. Data-driven decision-making can complement your experience and intuition in several ways.
  1. Objective insights: Data provides unbiased information, allowing you to make more informed decisions based on facts rather than solely relying on your instincts.
  2. Identifying trends: Data analysis can help you spot trends and patterns that may not appear at first glance. This can enable you to make proactive decisions and stay ahead of the competition.
  3. Measuring success: Data-driven decision-making allows you to track and measure the effectiveness of your strategies and decisions. This can help you identify what works well and areas for improvement.
  4. Reducing risk: Data can help you make more informed decisions, reducing the risk of making costly mistakes based on gut feeling alone.
  5. Enhanced collaboration: Sharing data-driven insights with your team can help align everyone towards the same goals and foster a culture of continuous improvement.
  6. Adapting to change: The hospitality industry is constantly evolving, and data can help you stay agile and adapt to new market conditions, consumer behaviors, and emerging trends.
  7. Innovation: Data can inspire new ideas and help you identify opportunities for innovation, ultimately driving growth and increased profitability.
While experience and gut feeling should not be disregarded, incorporating data-driven decision-making into your management approach can provide a more comprehensive and objective perspective. Combining your expertise with the insights gained from data analysis allows you to make better-informed decisions that ultimately lead to improved hotel performance and success.

Too much work before retirement

Hotels need data, such as customer demographics, booking patterns, pricing, market trends, competitor information, and internal performance metrics, to make informed decisions that drive revenue growth and maximize profits. However, due to data stored in many siloed systems, hotels struggle to find and access relevant, actionable data and insights for more intelligent decision-making. A forward-looking general manager's first action is to move from making decisions based on experience and gut feeling to data-driven decision-making. General managers that want to stay relevant need to bring the hotel into the future and start managing data - the new gold in hotels. These projects do not have to be overwhelming, but several challenges and critical aspects must be considered.
  1. Data Quality and Accuracy: Ensuring the data collected is reliable and accurate, as flawed data can lead to poor decisions.
  2. Data Integration: Combining data from multiple sources and systems, such as Property Management Systems (PMS), Benchmarking, Rate shopping, POS, Spa-systems, and revenue management tools, to create a holistic view.
  3. Timeliness and Relevance: Providing up-to-date and pertinent valuable information for decision-making.
  4. Data Analysis and Presentation: Effectively analyzing and presenting data in an intuitive way that allows team members to extract actionable insights.
  5. Data Accessibility: Ensuring team members can easily access the data they need to make informed decisions.
Additionally, hoteliers should be aware of other factors.
  1. Data Privacy and Security: Complying with data protection regulations and safeguarding sensitive customer and business data. Hotels should already comply with data privacy and security rules and regulations since they handle guest data in the hotel PMS.
  2. Data Literacy: Empower team members, including the general manager, with the skills to interpret, analyze, and communicate data effectively.
  3. Organizational Culture: Fostering a data-driven culture that values data as a strategic asset. The general manager must be a role model to inspire all team members to embrace data-driven decision-making.
  4. Scalability: Implementing scalable data infrastructure and tools to accommodate growth and evolving needs.
  5. Change Management: Managing the transition to a data-driven approach by addressing resistance, providing support, and communicating the benefits. The general manager must add resources to the implementation to ensure the change happens.
In summary, the problem lies in the difficulty of collecting, integrating, analyzing, and accessing relevant and actionable data while considering all the challenges and factors mentioned above.
Hotel general managers are experts in managing almost anything. They would have no problem running a project to use data to improve decision-making to grow revenue faster and increase long-term profits. General managers need to answer the question: Would you rather retire early and be seen as an old-timer who had difficulty adapting to a changing world or a dynamic general manager who leaped growing revenue and improving profits by implementing data-driven decision-making?