How understanding business intelligence can boost profitability

Recovery comes in all shapes and sizes and from all different directions. 2022 will prove this in ways most of us can’t imagine. However, with smaller teams wearing multiple hats, it’s possible your team might miss the shifting tides of recovery. This is especially true if your team is focused on the business that was standard (prepandemic) and not on business that is returning right now. 

Throughout the pandemic, as meetings have returned to the marketplace, the industry segments returning have shifted from month to month and quarter to quarter. Hotels that thrived throughout the past two years (and yes, those hotels do exist) are the ones that were nimble and monitored the trends. They weren’t singly beholden to a list of accounts from the good old days. They didn’t wait for the business to return to them.

Instead, they read the tea leaves of the business intelligence available to them to watch what was returning (albeit) slower than they would have liked. They took advantage of transient leisure business while also keeping their fingers on the pulse of corporate business. Additionally, they pivoted regularly to shift into segments as they recovered.

Understanding Movement in the Top 10 Segments

To better understand this, it is helpful to review how segmentation shifted. In 2019, the top 10 industry segments accounted for 57 percent of all corporate events in the United States. Additionally, across each quarter of the year, these segments remained in the top 10. The positions shifted across the quarters but the top 10 remained the same. 

Knowland Top 10 Industry Segments

In 2021, most of these remained in the top 10, but there was a new entry. Entertainment/media crept into the top 10, replacing pharmaceutical. This makes sense because the entertainment industry struggled to restart filming movies and television productions. They selected states where things were relatively open and often bought out entire hotels to keep their production staff safe. 

Knowland 2021 Top Industry Segments

Looking at the two charts, it might seem your teams didn’t need to change their strategy. However, the top producers aren’t the real story. The focus should be on how much of that business has been recaptured. 

By the end of 2021, the top 10 industry segments from 2019 were among the lowest recovered segments. So, while they represent most of the overall business, they weren’t the growth opportunity. This means focusing solely on those segments and the accounts within them probably caused hotels to miss opportunities within other segments. 

Knowland 2019 Recovery

Now looking at the other end of the spectrum and seeing what is functionally recovering, there is a completely different perspective as well as a completely different set of accounts. The charts below show the full year 2021 recovery side by side with those same metrics for Q4 of 2021. 

It’s easy to see the shift in recovery from the whole year to Q4. Each segment saw significant improvement across the year. Additionally, the segments themselves shifted. This illustrates the importance of looking beyond what used to be and focusing on what is happening right now. 

Knowland Recovery Metrics

Now let’s turn the focus to 2022 to see what additional shifts have occurred. Seven of the top 10 industry segments are the same as in 2019. However, there are three additional segments: entertainment/media, construction and pharmaceutical. 

For most markets, this might represent dozens of companies (or more) in each of the new industry segments. However, if your teams aren’t focused on the changing trends, they will miss out on the opportunity.

Knowland 2022 top recovery segments

Now looking at the opportunity from the recovery spectrum, the industry segments below are the most recovered to 2019 through the end of February. From Q4 of 2021, there are four new entries: entertainment/media, agriculture, construction and data/research services. 

Knowland 2022 recovery metrics

As teams re-engage the sales process, it’s vital they start searching where the biggest opportunities lie. Understanding market conditions at the macro level can help focus the efforts and make sure the sales team is making the best use of its time.

Better Understanding Business Intelligence to Gain Greater Profitability

Strong business intelligence tools are a must for sales teams. It’s time to stop thinking certain tools are only for specific teams. Every BI tool has different features and each feature can be used differently within each department. However, too often, these tools are pigeon-holed as a revenue-management tool, a sales tool, etc., and in the process, it is then neglected by the other teams. 

Every BI tool should be used by multiple teams. Not every feature within your BI tool is meant for every member of your staff. However, you and your team should be able to walk through the features and determine which works for each team. Additionally, your vendors should be able to help you work through this process as well. Remember there will be features that work across multiple disciplines and these are the ones you really want to focus on.

Once you’ve determined which features have potential across multiple teams, your teams need to agree on how to use each one. Each team will likely have different interpretations of the features because they have different needs. It’s important to create alignment for each one:

  1. Create an understanding of how and why each team uses a particular feature
  2. Identify mutually beneficial uses for each one
  3. Develop a plan for use going forward

Beyond aligning their common uses, the teams should work together to understand the other features each team uses. Does revenue management gain market trend information from somewhere sales doesn’t have access? Can sales help revenue management understand account potential better with tools they have access to?

Working together to understand the flow of how each team uses their BI tools will create alignment and coordination which will help open up the sales opportunities. In other words, each team can help the other work smarter not harder. 

Tearing Down the Silos to Create Greater Efficiency

The silos that existed between sales and revenue management have been greatly reduced over the past two years. However, it’s time to tear down the silos altogether. Revenue management excels at reading the tea leaves and understanding the trends. Working together with sales, they can point them in new and possibly better directions for prospecting for business entering, re-entering or simply shifting within the market.

Sales teams can research those opportunities and find the accounts driving the macro trends revenue managers see. Then they can help revenue management understand the total account value so the two teams can pull together the optimal offering to capture new, re-emerging or share-shifting business. This should be the most synergistic relationship within your hotel.

In these times of tighter staffing, doing more with less, cross-functional teams are the only way your hotel can be successful. It is vital your sales team is focused on the business that exists right now, not the business they want to return (unless those are the same). Together the two teams can identify the trends as they are happening and get ahead of the competition.

Kristi White is chief product officer at Knowland.