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Hospitality Business Intelligence: Almost Mainstream

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October 26, 2006
Enterprise | Business Intelligence
Jay Troutman

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© 2006 Hospitality Upgrade. No reproduction without written permission.

Lower Prices Bring Enterprise Business Intelligence to Wider Hospitality Audience

Business Intelligence (BI) and the executive dashboards, scorecards and reports it generates have been called the ultimate C-level tool for hospitality executives. Corporate managers at top companies like Starwood, Ashford Hospitality, Merritt Hospitality, Peabody Hotel Group, Interstate Hotels and Host Marriott rely on BI applications to provide accurate real-time data on the health of their properties and enterprise.

Comprehensive business intelligence reporting output is extremely powerful because it is dynamic; that is, it lets users drill through individual metrics by clicking on them to see the source data behind any information to verify the cause of specific performance for a real-time snapshot of a business. Most BI reports also allow ‘what-if’ drag-and-drop functionality that enables managers to change reporting formats to view data in creative ways to extend analysis. True BI reporting quickly converts to graphics for executive dashboards. While this may sound complex, the best BI systems are easy to use.

Business Intelligence in Hospitality
During the past five years, business intelligence has gained steady acceptance among big players in the hospitality industry like Hilton Hotels that have their own IT staffs, and among small and medium-sized companies such as Concord Hotels and Dolce International. As many as 10 business intelligence vendors exhibited at HITEC in June 2006.

Companies like FedEx, Toshiba, BMW and Boeing are served by the broader BI industry’s three dominant vendors: Business Objects (Nasdaq: BOBJ; Euronext Paris ISIN code: FR0004026250 - BOB), Cognos Incorporated (NASDAQ: COGN) and Hyperion Solutions Corporation (Nasdaq: HYSL). Among these, Cognos has penetrated hospitality the most. In our market, third-party providers have added their software to Cognos’ business intelligence and corporate performance management solutions. Known users of Cognos licenses include Blackstone, Concord Hotels, Strand Development, InnKeepers Hospitality Management, Sandals Resorts, HI Development, Highpointe Hotel Corporation, ZMC Hotels, Sage Hospitality and CHIP Hospitality.

Warren Winslow, Corporate Controller for Peabody Hotel Group, is an experienced BI administrator. "Peabody uses business intelligence to create more accurate forecasts based on performance facts that result in greater efficiency and profitability," Winslow said. "The BI tool provides us the ability to access all historical and current month data on an immediate basis. The tool has tremendously improved the efficiencies associated with the overall access, comparability, and analysis of our data, and more importantly, the quality of our data. The improved quality allows management to make the necessary decisions with a much greater degree of confidence. We are able to forecast energy costs and other expenses by bringing in metrics from our general ledger while taking room revenue, occupancy and other data from our property management systems and using it all to build the performance reports from our dashboards. The information from Peabody’s BI system enables managers to make better business decisions for staffing, purchasing and at many other operating levels."

As an industry, we are also benefiting from recent enhancements to Cognos’ product line that include a breakthrough in pricing structure. The new version allows BI decision reporting to be accessed by a larger number of managers more economically so operators can utilize 20 ‘audience’ seats for the price of five seats under the previous plan. This means one power user can cost effectively distribute critical information throughout an entire company, giving more general managers access to information for better decisions. Additionally, BI tools now combine all modules of a fully integrated product suite into a single version that enables a greater depth of data analysis, reporting and email functionality. New communication usefulness automatically links and distributes BI reports and dashboards via e-mails or on a Web site, which can be used in sending daily performance and comp-set reporting to hundreds of property managers.

BI Dashboard—‘Head’s Up Display’ of Performance
Dashboards are graphic representations of performance and other metrics displayed as color-coded gauges, maps and charts. Hospitality executives use business intelligence dashboards to quickly review complex information from across the company without having to read reports. BI vendors are enhancing their offerings to include dashboard functionality so users can quickly set up and display multi-department performance graphically on one screen, including occupancy, RevPAR, budgets, STAR data, guest satisfaction and labor expenses. In the past, it was necessary to pour over separate printouts and manually correlate information.

BI: Mainstream Means More than Data Mining and Reporting
Although many applications that provide enhanced reporting functionality are placing themselves under the business intelligence umbrella, most are data mining and reporting applications within a single system, like a PMS, that generates information in spreadsheets. A true BI system is built around a free-standing data warehouse with the ability to capture, standardize and store information from many separate systems for analysis, graphic presentation and reporting. This includes data from outside the enterprise such as Smith Travel Research and PKF cost numbers. In response to queries, a true BI system scans its database to produce a wide variety of dynamic ad hoc reporting and delivers it to designated managers and executives automatically.

Dynamic business intelligence reporting output is extremely powerful because of its ability to spot trends and exceptions in real time. New functionality from leading BI vendors will make almost all hospitality BI tasks simpler and more cost effective, and put true business intelligence, and greater profitability, within reach of more operators than ever before.

Jay Troutman is a member of the International Society of Hospitality Consultants, ISHC, and president of Aptech Computer Systems, Inc. He may be reached by calling (800) 245-0720 or (412) 963-7440 or via e-mail at vueinfo@aptech-inc.com.

What is Business Intelligence?

The term business intelligence encompasses a broad category of application programs and technologies for gathering, storing, analyzing and providing access to data to help enterprise users make better business decisions. BI applications encompass decision support, query and reporting, online analytical processing (OLAP), statistical analysis, forecasting and data mining. 

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