Our 12-month “Flex Your Data Muscles” analytics challenge has been running for seven months, and we hope that we’ve been able to provide you with some useful takeaways that will help improve your existing analytics efforts. If you’re just learning about the challenge, click here to view the Hospitality Upgrade newsletter issued in January 2015 in order to learn more.

Not Every Analytics Out There May Be Suitable For You

The adoption of analytics can assist you to know your data better, help you better understand your business, and provide guidance during your decision making process. This does not mean that every hospitality analytics available is suitable for you. You need to know which analytics is relevant to your current business scenario.

There are many analytics out there that you could apply to your organization, including industry standard analytics. Examples of the more familiar ones used in hospitality include: labor cost ratio, revenue per available room and food and beverage cost ratio. Most of these industry standard analytics are very useful, and can provide you with a starting point if you’ve not yet ventured into analytics. They help you analyze your business in the same way as your competitors and industry leaders, and also enable you benchmark your performance against similar businesses within the industry. When using industry standard analytics, or any analytics template developed by someone else, it is critical to continuously ask the following questions: 

  • How relevant is this to me and my organization?
  • Will it help me make better decisions?
  • How does this analytics help me better understand my business?

Don’t just use certain analytics because everyone else is using it. Your hospitality organization may have unique characteristics that might render some analytics irrelevant to you. So choose wisely. For instance; it would be unwise to use food and beverage analytics developed for a property that is similar in size to yours but has a full-service restaurant, if your property only has a small bar that also serves light fare.

It’s not enough to just focus on using best-practice analytics. You also need to continuously think about the various ways in which these analytics could be tweaked or improved upon to meet your specific needs. For example: if you are analyzing total sales per cover, can you analyze it together with data from your scheduling system to see how the staff on duty during a particular period affects the ratio?

A Review of Last Month’s Challenge: Which Analytics Tools Should I Use?

The challenge last month was to identify the software applications available to you that could be used for analytics. Quite straightforward…right? Did you discover tools that you did not know existed or did not realize could be used for analytics? You’re not alone. There are quite a number of examples where organizations acquire a software application, but for various reasons very few people know it exists, what it does or what it can be used for. Did you also add the more common office productivity tools like spreadsheets (such as Excel) and desktop databases (such as Access) to your list?

What if you do not have any analytics tools? My suggestion would be to start doing very simple analytics using your office productivity tools, and then justifying the need for improved tools by demonstrating the value of analytics to your role and the organization. Similarly, if you do not have the desired analytics tool, start doing something using the readily available analytics tools. Remember that your analytics do not need to be fancy to be effective.
For those doing the advanced challenge, did you discover any obsolete analytics tools? A cost-benefit analysis will help you determine whether to upgrade or not. Did all those who needed access to your existing analytics tools have appropriate access, and did they know about the existence of such tools? Can you justify why you absolutely need certain analytics tools?

Series Recap: What We’ve Done So Far



What we did


Challenge #1 - Where is my data?

Identify and create a list of your various data sources (both internal & external).


Challenge #2 - What’s in my data source?

Figure out exactly what's in your data sources.


Challenge #3 - What questions do I have?

Identify and list the top 5 business questions that you frequently need answered. It didn't matter whether you currently get all the required answers or it's on your wish list.


Challenge #4 - What data can help answer my questions?

Map your information needs to your data sources. The emphasis was to utilize the information gathered during the first 2 challenges, and identify any data gaps.


Challenge #5 – Time for pit-stop

Review & refine results achieved so far.


Challenge #6 – Let’s get some data.

Get the data needed for your analytics.


Challenge #7 – Which analytics tools should I use?

Selecting the “best-fit” analytics tool.

Challenge 8: Let’s Do Some Analytics

What do you want to analyze?

Because roles and analytics needs are so different, I would prefer not to give you a specified list of analytics to do. Rather, I would ask that you review everything that we have done in the series so far and come up with what you want to analyze. Everything we have done so far leads to this task. In determining what you want to analyze, consider the data you have (and the knowledge you have about that data), the business questions that need answers and the tools available to you. An example:
  • Total Labor Cost Ratio:
    • Sum your total labor costs for the month (includes salaries, wages, bonuses, taxes, benefits, etc.) and divide this number by your total revenue for the month.
    • If you have enough data available, do this monthly calculation for the past two years.
    • Now take a look at month over month, same month this year vs. same month last year, year to date for this year vs. same period last year. Do you understand any trends/patterns? Can you explain the variances? Do the variance explanations and trends/patterns provide better guidance for the decisions you make?





·         Analyze 5 key ratios that are relevant to your role and analytics needs.

·         Analyze & benchmark 5 key performance indicators by department.

·         Benchmark the same performance indicators against similar organizations within the industry.

Comments and Hints:

Basic Level: If you are just getting started, there might be the need to get familiar with what to analyze and how to analyze it. Reference materials developed by hospitality industry groups such as HFTP, AHLA and HSMAI are quite useful. You could also seek assistance from the more analytics-savvy people within your organization or search the web for the specific analytics that you want to do.

Advanced Level: Benchmarking is key to any analytics endeavor, thus you have to remember to benchmark your key performance indicators against internal & external metrics. Benchmarking data can either be developed internally or obtained from various external sources including the industry groups listed above.

Collaboration Forum
I encourage you to participate by commenting on the newsletter posts or via our forum, to enable you to ask questions of each other, discuss how challenges were tackled, and also raise issues/problems that you encounter. Comments are meant to be interactive as well as educative, thus I’ll urge users to be respectful of each other.