Benchmarking and data analysis will play an even more important role for hotels, says GlobalData
Hotels need to assess historical trends from their competitive sets in order to find the areas where they typically underperform and identify the costs that are created through this underperformance
Through benchmarking and data analysis, hotels can compare and analyze how they have managed the current pandemic in comparison to their competitors. Effective benchmarking is needed in order to stay competitive. Achieved through data analysis, it allows hotels to gain up-to-date insight on changes in demand, when to adjust rates, how to forecast revenues and what strategic initiatives they should set up says GlobalData, a leading data and analytics company.
Ralph Hollister, Travel & Tourism Analyst at GlobalData, comments: “In unprecedented times like this, uncertainty can be eased through the use of historical data. Hotels need to assess historical trends from their competitive sets in order to find the areas where they typically underperform and identify the costs that are created through this underperformance and what can be done to improve.”
Using operational benchmarking provides an array of benefits, it allows hotels to both find cost-saving opportunities to make operations more streamlined during these difficult times and then improves the likelihood of them reducing their recovery period as restrictions are lifted on global travel.
Hollister continues: “Benchmarking and data analysis will also become much more important for external reasons, as well as internal ones. It is becoming obvious in the hotel industry as time goes on that an increasing number of hotels will either use debt restructuring methods or be forced into administration due to the impacts created by COVID-19. Discussions will now start to begin between lenders and landlords and the hotel company/business that they are dealing with.”
Benchmarking is important for this scenario. Lenders and landlords will want to see how a hotel has performed in comparison to its competitors. If the entity has over-performed or under-performed, lenders and landlords will be able to assess its chances of recovery.
Hollister concludes: “Through the use of effective benchmarking and data analysis, hotels can explain to lenders and landlords how they can restructure post-COVID-19 to become more agile and efficient in order to fix the current situation they find themselves in. This increases the chance of lenders or landlords believing in a hotels ability to become profitable in the future”.