Advanced IT software falling into the category of Big Data has started to edge out Excel spreadsheets in recent years. There is some skepticism around this in the hospitality sector, where asset managers prefer the flexibility offered by the traditional spreadsheet.
Are they right to stick with the tried and tested ways? Let’s assess:
Traditional platforms such as STR and HotStats rely on historical data, while the latest software can generate and update market information every second. The founders of Kube Ventures, a leading company in hospitality startup investment, described new software as more inclusive and complete, with constantly refreshed data.
Software not only considers basic data like room rates and property depreciation but can also factor in information around potential crises, weather forecasts, and social media trends. The data provided can help hotel asset managers to predict revenue and earnings quickly and more easily. The broader approach also enables dynamic pricing strategies and increases resilience in the face of issues such as the pandemic. It is worth noting that, while software is constantly advancing, an experienced eye is still necessary to interpret the information generated.
Excel remains the benchmark for creating measurements and reports, but the latest software can now be used to generate the reports, which historically had to be done manually. It can take significant time for asset managers to digest the information, then turn the numbers into in-depth analysis, while the new software can do it in one click. This frees asset managers from tedious tasks and allows them to focus on the analysis. This information can also be adapted again and again, depending on requirements.
While the ROI of Big Data analysis seems promising, the investment in the early stage should be carefully weighed up. Marriott International, for example, has already spent more than $50M on its own Big Data system. For large groups who can absorb the cost, there are clear benefits to having more informed asset management, but for independent or boutique hotels, it may be wiser to wait until the software market matures and the price reduces.
Privacy and security are and will continue to be critical issues. To build a full data picture, many of the new platforms demand access to their clients’ database. Unlike internal systems or excel files, data stored by platforms could be hacked or disclosed by accident. Asset managers, hotel owners and investors should consider this when decided who to work with.
Getting a significant amount of information generated from big data is not always satisfying. Michael Grove, Chief Operating Officer of HotStats points out that “people lack the skillset to get the best use of data.” With the technology in its nascent stages, training is hard to come by, and those attempting to use it could be overloaded with information.
Knowing which information to prioritize is a skill borne of years of experience. This experience also comes to the fore when spotting errors entering detailed P&L in an Excel format, errors that may have been missed if the spreadsheet was populated automatically. For those asset managers dealing with multiple properties, there is the added issues of having to standardize information across, potentially, multiple different platforms.
To conclude, while the potential of Big Data is huge, asset managers and hotel groups should take a step back before rushing towards large investments. The benefits of the new software does not yet outweigh its faults. While the ability to consolidate data is attractive, there is nothing that can outweigh the human touch.
*Originally Published on: https://hospitalitytech.com/.
Click here to view the original version of this release.
For more information about Global Asset Solutions, visit globalassetsolutions.com
Global Asset Solutions
Level 14, Boulevard Plaza Tower One
Sheikh Mohammed Bin Rashid Boulevard
Dubai, United Arab Emirates
Mr. Sogno began his career in New York City after graduating with honors at Ecole Hôtelière de Lausanne, Switzerland. He joined HVS International New York, and he established a new venture at the Cushman & Wakefield headquarters in Manhattan. In 2005, Mr. Sogno began working for Kingdom Hotel Investments (KHI), founded by HRH Prince Al-Walid bin Talal bin Abdul Aziz Al Saud member of the Saudi Royal family, and asset managed various hotels including Four Seasons, Fairmont, Raffles, Mövenpick, and Swissotel. He also participated to the Initial Public Offering (IPO) of KHI at the London Stock Exchange as well as the Dubai International Financial Exchange. Mr. Sogno is also the co-writer of the ‘Hotel Asset Management' textbook published by the Hospitality Asset Managers Association (HAMA), the American Hotel & Lodging Education Institute, and the University of Denver. He is the Founder of the Hospitality Asset Managers Association Asia Pacific (HAMA AP) and Middle East Africa (HAMA MEA).
CEO & Senior Hotel Asset Manager