Navigating Data: 3 Common Strategy-Setting Mistakes for Revenue Leaders to Avoid

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It’s good news, bad news time.  

The good? Hoteliers now have access to more critical guest, operations, and market data than ever before. The bad? It’s also become easier than ever to suffer from “analysis paralysis” as revenue leaders look to analytics to help them develop growth strategies.  

It’s a common issue—despite all industries making significant advancements in data gathering, a Forrester report found 74% of companies expressing a desire to be “data driven”, yet only 29% feel they’re successful at connecting analytics to their strategies.* That’s a substantial delta for the use of big data, but hoteliers can close this gap with a thoughtful approach to how they form strategic plans.  

It starts with avoiding some of the most common strategic planning pitfalls. In a recent webinar, Joyce de Kruif, principal industry consultant at IDeaS, shared some of her insight into where hoteliers tend to misstep.  

Mistaking aspirations and tactics for strategy

Data gathering and improved analytical capabilities make it easy to monitor a wide range of key performance metrics. But sometimes this wealth of measurable granular information can lead to metrics tunnel vision where well-intentioned leaders state their strategy is a KPI-centric statement of “grow RevPAR by X%”.  

While that statement isn’t bad to have in mind, it’s simply a goal for measuring the effectiveness of a strategy, not a strategy in itself. You can have a goal of “making more money” but what are you doing to make that happen? This leads to another common issue for strategic plans: confusing tactics with strategy.  

This misstep is very easy to make as both tactics and strategies address how you’re going to solve a problem or reach a goal. But a strategy should focus on the big picture positioning, and tactics are the tangible steps you’ll take to get there.  

For example, an overarching goal of growing hotel revenue by 2% could be supported by a strategy of improving meeting and events performance, which is done tactically by using software tools to improve RFP response times, better evaluate group business opportunities, and so on. The individual tactics can be measured as well, but it’s important to ensure these tactical measurements don’t conflict with the overarching goal.  

Losing competitive focus

For hoteliers struggling with strategic planning, often the outcome can look a lot like they’ve dusted off last year’s plan and said, “Let’s do that again—but better.”  

While sometimes better execution of generally the same strategy is a valid move, it’s important to not get complacent with your strategic approach. If you’re engaging in strategic planning, take a fresh look and ask, “How does this give us a competitive edge?”  

Strategic planning efforts need to consider your competitive landscape. What are the threats? Are there opportunities for your property to differentiate? What can you realistically do to address these or take advantage?  

Don’t get us wrong, shoring up weaknesses by implementing revenue management tools and best practices is a great way to potentially gain market share initially. But you’ll need to look outward if you want to continue building upon that success and move on from being “on par” with your competition.

Failing to tie strategy to data insights

It happens all the time. Well-intentioned strategic plans get drawn up, but eventually fall to the wayside as their lack of tethering to data insights makes them irrelevant in short order.  

An insight is simply a learning that leads to new value. If your strategy isn’t based on data insights, there’s a good chance it’s not going to drive value for your organization or your guests. Of course, it takes some effort to identify those insights efficiently, but there are some approaches that can help:

• Use reporting dashboards & visualizations: Compiling data into easily digestible reports and visualizations helps to quickly surface the truly noteworthy fluctuations in key metrics. With these in place, it’s easier to ID the Big (statistically significant), Useful, and Surprising (BUS) information worth further investigation.  

• The “5 Whys” technique: With data point(s) of interest identified, it’s time to drill down into what’s causing them. Taiichi Ohno’s “5 whys” approach of asking “why”-based questions is a simple way to reach that root cause and reveal areas of opportunity.

• Forward-looking data analysis: Many revenue leaders analysis time is understandably focused on reporting past performance, but that doesn’t leave much room for hypothesizing and future opportunities. Dedicating time to simply be curious and explore correlations and trends can be fruitful.  

The right tools for the job

Often the biggest detriment to developing data-driven strategies is time. Advanced automated revenue management systems significantly reduce the time spent tending to tedious tactical efforts and compiling reports. This helps revenue leaders find time to dig in for the valuable strategic insights that provide a true competitive edge.  

Could your hotel benefit from a revenue management solution? See our Ultimate Buyer’s Guide for key benefits, considerations, and more.  

*Brian Hopkins, Ted Schadler, James McCormick, “The Insights-Driven Business”, Forrester

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