How hospitality brands are leveraging data to guide decisions — and a roadmap to successful analytics implementation with tips from top industry experts.
Predictive Analytics: What We Can Do Today to Prepare for Tomorrow
Robert Firpo-Cappiello, Editor, Hospitality Technology magazine
“If you don’t understand who your guest is and what their behavior is, you’re going to lose,” says Joe Tenczar, CIO at Sonny’s BBQ and co-founder of Restaurant CIOs.
Sonny’s, a regional chain with more than 100 locations across the Southeast, has weathered the challenges posed by the pandemic, lockdown, and economic downturn thanks in part to its commitment to understanding guest behavior. That includes a solid data analytics strategy, robust CRM strategy, and personalized guest experiences based on data.
“We use Black Box Intelligence for industry analysis, Data Central (from Restaurant Magic) for bottom-line analysis, and Marketing Vitals for top-line analysis. We aggregate these and dozens of other data sources through PowerBI, and we have two, highly skilled, full-time data analysts,” notes Tenczar.
Sonny’s success — performing between 96th and 99th percentile in its category throughout 2020, holds some valuable lessons for hospitality brands seeking to rebound, whether that means restaurants reopening dining rooms and optimizing off-prem, hotels finding effective new ways to welcome back guests, or simply preparing for unknowns down the road.
The Importance of Predictive Analytics
“Restaurants and hotels have historically been playing catch-up when it comes to analytics,” says Toby W. Malbec, Managing Director at ConStrata Technology Consulting. “And while our industry struggles to get to predictive analytics — knowing what will likely happen based on the data collected — other industries are already using prescriptive analytics, having technology provide the operator with actions based on the analysis of the data. If we are as industries going to move forward and address the customer’s growing demand for service personalization, we need to accelerate our adoption and execution on the analytics front.”
For hospitality operators, that means implementing analytics that can make predictions and offer actionable insights into an array of guest preferences and habits. Is a particular restaurant guest, for instance, likely to order a second glass of wine with dinner? If so, what steps, offers, and accommodations are most likely to close that transaction? Or in the case of a regular hotel guest, what are the most effective perks, offers, and items to place in a welcome-back gift basket? Is there a room they consider “theirs”? These and myriad other opportunities for personalization and upselling abound once operators start making practical use of the data they collect.
The smart deployment of predictive analytics is simply an extension of hospitality’s bedrock commitment to delivering what a guest wants. Thanks to innovative technology, we now have the ability to deliver it at unprecedented scale.
Any roadmap to implementing analytics must begin with a holistic approach: While an effective initiative may start with software that integrates easily into an existing platform, an organization’s commitment to data analysis is much more than a plug-in.
“Analytics is about more than just a new software system or a team of data scientists. Everyone in the organization needs to orient themselves toward making better decisions, using the data at hand,” says Joel Davis, Chief Strategy Officer at Revenue Management Solutions. Davis also notes that executives must address “data literacy” and the adoption of analytics systematically across their organizations. “Your customers are telling you every day, and with every action, what they want. If you don’t have a robust analytics system and culture in place, you are not listening.”
It is vital that hospitality firms have a clear framework that connects their people and technology to the business challenges they want to address.
The need for a holistic approach to analytics isn’t just recommended by hospitality operators like Tenczar and consultants like Davis and Malbec — solutions providers are increasingly spreading the message that analytics software must be part of a system-wide, goal-oriented approach. Bill Bellissimo, President & CEO CrunchTime!, notes, “Predictive analytics tools are no longer ‘nice to haves’ but rather critical tools in this unforgiving operating environment. Hospitality leaders need applications that can knit together multiple data sources to give them actionable insights in real time. With the right tools parsing through a broad set of operating data, operators can deliver what guests want while maintaining and even improving profitability. Combining dynamic sales forecasts with diverse data sets that include menu margin analysis, historical check detail, recipe/ingredient consumption trends, labor optimization standards, statutory labor law compliance, and the production profiles of recipes being prepared are vital to driving labor optimization, efficient supply chain replenishment, and proactive production planning.”
Enhancing Guest Experiences
Brands that want to implement analytics — or, more accurately, make full use of analytics capabilities they likely already have — must keep the big-picture goal in mind: Guest experience.
Terri Menking, Principal Consultant & Chief Architect at Return on Information, echoes Infante’s focus on her guests, noting, “Our guests are just like us ... busy. We want an experience that meets us where we are. My dining needs change week to week, day to day, and meal to meal. When I look at the brands that keep winning my business, I recognize they win because they are focused on me ... delivering a consistent and frictionless experience every time. They have mastered the navigation system of using data to drive not just business decisions, but action. And they know how to use data to help me have a positive experience that makes it easy for me to keep coming back.”
Menking notes that guest experience may be more important than ever. “Guests now have hundreds of dining options at their fingertips and they are more distracted than ever,” she says. “How do you get their attention and win their clicks? By understanding who they are, what they like and making it oh so painless. Predictive data analytics is quickly becoming the only way to win in an environment where you have seconds to convince your guests to choose you.”
Know Your Objectives
When capturing and learning from what your guests’ behaviors are telling you, it’s crucial to understand what your own objectives are, says Tanvir Bhangoo, VP, Technology at Freshii. “Brands looking to accelerate growth must leverage data at an individual, micro-targeted level, regardless whether the goal is sales growth, customer frequency, or growing revenue for a less-busy part of the day,” says Bhangoo. “One of the best ways to do this is to (1) simplify and segment data based on your objective, and (2) build a personalized campaign structure at a micro level. In this approach, a quick service restaurant running a loyalty program, for instance, would have hundreds of different offers catered to key user segments; a different offer for a guest who buys breakfast everyday vs. a guest who only comes in once a week vs. someone who frequently visits a competitor, and so forth.”
Menking notes, “Actionable data that is aligned to clear and focused company objectives is the new gold standard, and it’s how the top brands are winning.” In fact, Menking insists that the quality of a brand’s data is best measured by the actions it inspires and the results achieved. “It is no longer enough to know the traditional data points. Every stakeholder within your brand — marketing, ops, procurement — needs a lot more than aggregated data, they need actionable data. The tools of the future will do the heavy lifting of analytics and take the guesswork out of responding to information. Data is only as good as the action you can take.”
Restaurants Leveraging Data
Here, we take a look at just a few of the restaurants and solutions providers delivering on the promise of predictive analytics:
Brinker International Inc., the casual dining restaurant company that includes 1,600 franchise locations for Chili’s Grill & Bar and Maggiano’s Little Italy, has made Teradata Vantage platform (delivered as a service on Amazon Web Services) the core of its data analytics initiative. “Being a data-driven organization allows us to make informed decisions to create a better guest and team member experience,” said Pankaj Patra, Senior Vice President and Chief Information Officer at Brinker. “As we looked for more flexible and cost-effective ways to manage and access our data, we evaluated quite a few cloud-native providers. After careful consideration, we decided the best course of action would be to migrate to Teradata Vantage in the cloud and take advantage of its as-a-service offerings to support our analytic goals.” Teradata Vantage allows partners such as Brinker to focus on actionable insights rather than managing infrastructure. Its machine learning integration enhances sales forecasting, supply and demand, traffic, workforce management, and customer-recommendations engines.
Appetize, the cloud-based POS and management platform, announced a partnership with Restaurant365, the cloud-based accounting and back-office management platform. The powerhouse combo allows restaurant operators to combine their ordering systems, operations management, and accounting that, among other benefits, enhances predictive analytics capabilities. “Restaurants today are looking for a way to integrate their disparate systems for an automated, real-time front- and back-office experience,” said Jason Pratts, chief information officer at Appetize, in a statement. “We’re thrilled that Appetize and Restaurant365, two leaders in cloud-based restaurant solutions, have partnered to deliver a single streamlined POS, accounting, and operations platform for restaurants to maximize revenues.” Restaurant365’s financial and operational reporting can drive actionable insights into sales, menu engineering, food costs, and more, and Appetize allows restaurants to act on insights quickly with updates to menus, pricing, promotions, and other core customer-facing tools.
Smartbridge is helping to power predictive analytics at major chains including Chipotle Mexican Grill, Wingstop, Red Robin, Sonic Drive-In, and Yum! Brands, to name just a few. It partners with Snowflake, Azure, MicroStrategy, Attunity and other platforms to build an enterprise strategy for restaurants that includes machine learning and artificial intelligence. Smartbridge can optimize labor scheduling, sales forecasts, food cooking forecasts, and budgeting, and offers a “silent, non-intrusive” guest-recognition and loyalty program that can increase speed of service and order accuracy. It also optimizes drive-thru lanes and reduces wait times by initiating intelligence-driven cook-ahead processes.
Analytics for Hotels
Here, some of the hotel-focused analytics initiatives that can point the way in welcoming guests back to a property.
IHG affirmed its commitment to investing in data-driven decision making by appointing David Oppenheim as Senior Vice President, Analytics & Insights in September. Claire Bennett, Global Chief Marketing Officer at IHG, commented in a statement: “At IHG, we are focused on driving our business forward using data and insights to make strategic decisions. Data and analytics play an increasingly critical role in our customer journey and assessing marketing performance. Having the right data allows us to deliver more impactful experiences to our guests and build deeper relationships. We are thrilled to have David on board with deep expertise in this segment to help us advance our work in this space and unlock the full power of data in everything we do.”
OTA Insight is a cloud-based intelligence platform that now offers Market Insight, a predictive market-intelligence tool that captures hotel booking intent in real time. “The way we’ve been looking at data to gauge booking demand all these years has been quite limited,” said Sean Fitzpatrick, CEO at OTA Insight, in a statement. “Hotels have traditionally based revenue decisions primarily on OTB data, which provides some indicators on the potential for future demand, but in reality it’s only part of the picture.” Market Insight gathers data-points from “top-of-funnel” sources, including hotel web searches, online reviews, flight data, events, holidays, alternative lodging inventory data, and even weather forecasts and uses its unique AI-powered technology to deliver location-specific and segmented demand insights.
Twiddy & Company, a vacation rental company in the Outer Banks, North Carolina, that represents more than 1,000 homes, built its own in-house analytics team (currently eight members). By leveraging SAS Analytics, the team delivers insights to homeowners to help them make the best possible decisions about their investments. As the pandemic and economic downturn hit the Outer Banks, Twiddy’s analytics team was able to research and optimize digital advertising and marketing campaigns to help match interested renters with available inventory despite bridge closures and limited revenue. The result speaks for itself: In May, Twiddy decreased vacancies at twice the rate of its competitors.