Revenue managers in today’s hotel industry are familiar with the term “Garbage In, Garbage Out,” or GIGO, which can be used in any department when referencing the importance of keeping information and communication clear, concise and correct. Expanding the concept of GIGO into a term specific to the revenue management discipline creates the concept of “Data In, Data Out,” or DIDO (not to be confused with the singer from the late 90s).
DIDO, as with most things in the revenue management discipline, is an art and a science. The ability to master DIDO is what helps separate revenue management leaders from the pack.
So what exactly is DIDO?
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Orly Ripmaster |
It’s the ability to synthesize and interpret data supported by the ability to tell a story. Revenue managers must effectively and efficiently convert vast amounts of data they get IN into the data they give OUT … that’s the science. Knowing what information is relevant to which shareholder is the art. Someone who can master how to interpret, communicate and influence the data with respect to each unique shareholder’s perspective … that’s a leader.
While it would be great to have a universal secret recipe for data interpretation and communication, unfortunately it’s all relative. All shareholders are unique in the perspectives with which they interpret hotel performance. The best revenue mangers will observe the specific data needs, wants and expectations of each shareholder and deliver data with an approach that best suits that perspective.
Good news to some might be bad news to others, and it takes time to master who needs what. The first step for revenue management leaders is to recognize that different perspectives exist and discern reactions, patterns and data requests so they can manage DIDO.
Recently, members of HSAMAI’s Revenue Management Advisory Board took an informal survey giving their opinions about DIDO. The goal of the survey was to get a pulse from industry leaders on the amount of data coming in and the importance of how that data goes back out. Some of the results are highlighted below:
How many reports to do revenue managers look over on a daily basis?
Survey responses ranged from five to 30-plus reports, with the average being 10 reports per day. Translation: That’s a large dose of daily data.
Of that daily data, approximately 80% of respondents believe that up to a quarter of that data can be categorized as “critical.” Of that 80%, half believe less than 10% of the data is critical, and half believe the proportion is between 11% and 25%.
If industry leaders believe only up to a quarter of the data is “critical,” then how much is “important”?
The most common answer was anywhere between 50% and 75% of the data coming in is “important.” When managing DIDO, the key is knowing what’s important and what’s not.
The largest spread of results occurred when respondents were asked what percent of the daily data digested by revenue managers is “irrelevant.” Responses ranged from less than 10% all the way up to 75%. However, the majority (almost two-thirds) of respondents believe 11% to 25% of the daily data revenue managers get IN is “irrelevant.”
Managing the barrage of incoming questions
Another critical component of DIDO is the barrage of questions that revenue managers get on a daily basis. Whether it’s someone popping into the office or just walking down the halls, the best managers of DIDO are always armed with answers. Respondents of the HSMAI Revenue Management Advisory Board survey compiled questions that all revenue managers should know the answers to, no matter time or place.
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How’d we do last night?
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How’d the competition do last night?
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How do we look for tonight?
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What is our rate tonight?
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How are we going to end the month to budget?
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What is our occupancy, rate, revenue per available room for this month?
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What is the comp set’s occupancy, rate, RevPAR for this month?
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What’s our mix for the next three months?
When walking the office halls, it’s best to have a pulse on performance from the night before, performance tonight, performance for the month, a sense of the business mix for the month (and potentially the quarter) as well as a pulse on the competition.
A best practice is to create a dashboard that can be easily updated each morning allowing consistent bullet points in case you get questions. Additionally, adding short answer solutions or tactics to the dashboard could be the difference between a good answer and a great answer.
Telling the story
Overall, the most important attribute for DIDO is articulating the story, particularly if it’s not a rosy one. Of the respondents from HSMAI’s Revenue Management Advisory Board survey, only one-third said the importance of articulating good news is of the highest importance. Conversely, approximately 90% responded the importance of articulating bad news is of the highest importance.
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Advice from industry leaders to consider when thinking about telling your data’s story is consistent:
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Revenue managers have to "sell" news to their superiors, and they often oversell good news and underreport bad news. This comes from a fear that their superiors will "shoot the messenger." The revenue manager should be able to articulate the entire story, good and bad, to their superiors.
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Revenue managers are infamous for data dumping, so interpretation and storytelling are critical.
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Revenue managers struggle with data interpretation. It is an art that must be practiced and refined.
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Interpretation and storytelling are the most important parts, especially when you're trying to accomplish a strategy.
So that leads to the next logical question: Does technology assist in this data interpretation?
The overwhelming reaction to this amongst survey respondents was that while technology is critical and helps save time, that time saved needs to be dedicated to analysis, planning and strategy. Technology is not an answer as much as it’s a tool to help arrive at an answer.
Overall, active managers of DIDO understand the importance of their role within the organization. It is as much about communicating what the data means, as it is collecting the data. Effective managers of DIDO must spend as much of their time improving and adapting communication about the data as they do honing their data collection and organization skills.
Orly Ripmaster, CRME joined KSL Capital Partners, a Denver, CO based private equity firm specializing in travel and leisure businesses, in March 2012. Prior to KSL, she was a senior manager and founding member of the Analytics division of STR (Smith Travel Research). She was actively involved in the creation and execution of multiple STR Analytics reports, implemented by numerous international hotel companies. Prior to joining STR Analytics she held several operational positions, including revenue management with Destination Hotels & Resorts. She holds a BA (cum laude) from Harvard University, a MA in Mass Communication from the University of Colorado and a MBA in Hotel Real Estate from ESSEC Business School in Paris, France. Orly is a member of HSMAI’s Revenue Management Advisory Board.
About the HSMAI Revenue Management Advisory Board
The Revenue Management Advisory Board leverages insights, emerging trends, and industry innovations to guide the development of products and programs that optimize revenue for hotels.
Members include:
• Co-Chair: Jon Eliot, CRME, CHA, Vice President of Revenue Management, Premier Hospitality Management
• Co-Chair: Sloan Dean, CRME, Vice President of Sales & Marketing, Interstate Hotels & Resorts
• Immediate Past Chair: Scott Roby, CRME, Vice President, Revenue Management, Evolution Hospitality
• Chris K. Anderson, Ph.D., Professor, Cornell University
• Bonnie Buckhiester, President & CEO, Buckhiester Management USA Inc.
• Sheila Cosgrove, Director, Revenue Management Ops & Planning, Intercontinental Hotels Group
• Kathleen Cullen, CRME, Vice President Revenue Strategies, Heritage Hotels and Resorts
• Kent Duncan, CRME, Vice President, Sales & Revenue Strategy, Marcus Hotels & Resorts
• Tammy Farley, Principal, The Rainmaker Group
• Neal Fegan, CRME, Executive Director of Revenue Management, Fairmont Raffles Hotels International
• Rhett Hirko, CRME, Director of Revenue Analytics, Hyatt Hotels & Resorts International Operations
• Jay Hubbs, Vice President, Regional Sales, ReviewPro
• Burl Hutchison, CRME, Director of Revenue & System Optimization, Sabre Hospitality
• Klaus Kohlmayr, Senior Director, Consulting, IDeaS - A SAS Company
• Mark Molinari, CRME, Corporate Vice President of Revenue Management and Distribution, Las Vegas Sands
• Orly Ripmaster, CRME, Senior Associate, KSL Capital Partners
• Mark Robertson, Central Director Revenue Management, Wyndham Hotel Group
• Susan Spencer, Market Director - N. America, ChannelRUSH
• Trevor Stuart-Hill, CRME, President, Revenue Matters
• Paul Wood, CRME, CHBA, Vice President of Revenue Management, Greenwood Hospitality Group
Want to Learn More?
This topic will be addressed as part of the 10-part 2012 Revenue Management Webinar Series produced by the HSMAI University in partnership with HotelNewsNow and STR. Each month a webinar covers one aspect of cutting edge revenue management in today's economy in conjunction with articles written by members of the HSMAI Revenue Management Advisory Board. If you’re not able to attend a live program, archives are available.
