Having recently joined Duetto, I have come to realise just how advanced the predictive analytics solution we offer is. I joined Duetto from IBM, where I worked for four years in the role of Worldwide Sales Leader for their Procurement Business. IBM is a global enterprise, and an undisputed leader in its field. Yet, while the scale of predictive analytics offered is hard to beat, the core value of the Duetto offer to hoteliers is by far the most targeted and relevant use of predictive analytics I have come across.
Let me explain.
First, let’s clarify what predictive analytics is. When people think of predictive analytics they often think of historical forecasting – ERP systems. Demand forecasting has been around for many years and is based on historical data. However, predictive analytics is a very different philosophy that takes many forms of data, both internal and external, to provide a real-time, dynamic version of what demand can look like.
The idea of ‘Big Data’ scares many; they see it as technical consolidation, but a technical consolidation that is far too big to grasp and that probably won’t make a difference to their business.
[bctt tweet="Predictive analytics is all about actionable #data for #hotels" username="OptimizeDemand"]
However, predictive analytics is about consolidating data from all realms of your business to provide relevant information. At the end of the day, it is not about data, it is about information. More importantly, it’s about having information upon which you can act.
At Duetto, we deliver information that is relevant and that revenue managers can use. At the end of the day, hotels are looking at driving profitability and ADR; we present a firmer connection between the two.
Duetto is a very practical use case of predictive analytics in action to deliver real-time benefits in terms of impact to profitability and ADR to hoteliers.
Providing Dynamic Information for Hotels
I’ve realised quickly that Duetto’s unique selling proposition is about providing relevant, dynamic information to help hotels forecast demand. The important part here is that our information is dynamic. This is not about looking back in order to predict the future; it’s about analysing information from lost-business data like denials and regrets, air traffic data, competitive set, and more to build up a more accurate picture of the market in a shorter time frame.
In these times of uncertainty, predictive analytics is about analysing all these data sources to enable revenue managers to be far more adaptable to change. This means that when something does happen you are able to react more quickly to the change. See Nathaniel Green’s analogy to driving a car for a great insight into how predictive analytics can help you chart a course through an uncertain market.
Building an Accurate Forecast
Predictive analytics is about gathering data in real time from numerous sources, both within your business and from outside it. At Duetto, our solution collates various inputs, including:
- web shopping denials
- web shopping regrets
- air traffic data
- competitive-set data.
All these data sets together present a detailed picture of potential demand. However, possibly the biggest information provider is the data from lost business.
Lost business is the demand that people don’t see. But actually the data hidden in plain sight on your direct channels is so critical, as you can really get a perspective of your true unconstrained demand moving forward.
Through your booking engine, you can discover the country of residence, type of room, package, price and much more of those who did not book. This is highly relevant data and can help revenue managers get a view on future demand that is far more accurate.
Analysing your lost business, you can discover at what point customers abandoned their bookings. This tells you something: Did you not have the right type of room, offer the right package or meal plan, or was the price too high? Did your booking engine see a flurry of activity from a particular country? Ask yourself why that was. Could the demand be linked to an annual event? If so, you need to be aware of this for next year.
With this information, lost-business information can be prescriptive in terms of sales and marketing campaigns. Next year, you will know to target that particular event that led to a spike in views, so that you can better convert and enjoy a spike in occupancy and ADR.
With data such as air traffic information and competitor benchmarking, you can make decisions in real time. The Duetto solution is updated on such a high frequency that it provides up-to-date, dynamic and real-time data for revenue managers to make real-time decisions. This is a huge breakthrough.
One of the common gripes I’ve heard from hoteliers since joining Duetto is, “By the time we’ve crunched the numbers and collated the data the forecast is four weeks out of date anyway.” Sadly, this will be true if the data you are working with is already outdated, and the systems you have in place are not dynamic and capable of providing instant analysis.
The hotels market is changing at a rapid rate these days. It is no longer enough to just build your forecast on the fact that Wimbledon is happening in July.
The world is quickly moving toward much wider adoption of larger data sources to do amazing things. Duetto is taking that philosophy to the hotels industry, taking relevant data from all areas to provide dynamic pricing and Revenue Strategy.
It really is rather cool!