Smart hoteliers use benchmarking strategies to understand their
properties’ performance compared to historical data and compared to their
competition.
Generally this is done by comparing figures – whether for occupancy,
ADR, RevPAR or another metric – from one period to the same period one year
prior.
Then came 2020 – a year when travel came to a halt due to
the COVID-19 pandemic, skewing the data so dramatically that it is meaningless
as a point of reference.
During a session of STR’s virtual Hotel Data Conference this
week, The Next Normal: Benchmarking Post Pandemic, the company’s vice president
of analytics, Isaac Collazo, says hoteliers have to think differently about benchmarking
for the next couple of years.
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With all traditional metrics at record lows during 2020, the
gains that are already materializing in some markets can be interpreted with too
much optimism if compared as percentage increases year-on-year or
month-to-month.
“Once we get back to ’23, then traditional benchmarking starts
working again,” Collazo says.
For now, Collazo advises hotelier to use indexes: picking a
specific point in time pre-pandemic and measuring current data against that
point.
“This is a simple, easy way to measure your progress in
recovery because now you can say I had double-digit gains every month, but even
with double-digit gains I’m not back to where I was in 2019 or 2018, whichever the
case may be,” Collazo says.
“There’s even been talk of using a five-year average - the
five years ending in 2019 - and benchmarking against that. Once you set that
level, that foundation, then ... it lets you map out that recovery.”
Data from a hotel’s direct competitors can also be incorporated
in the index so hoteliers can track their progress relative to their market.
Collazo says larger hotel portfolios should segment their
properties – for example by size or type of market – to provide a more useful analysis.
“The beauty is then I can quickly check my portfolio and see
what’s coming back sooner, faster, where I should prioritize,” he says.
“That’s the idea of benchmarking; it’s about getting your focus,
knowing where you should look rather than trying to do everything shotgun
approach.”
In addition to looking at historical data, hoteliers should
also analyze their future reservations.
“If you are ahead in forward bookings but always behind when
the days pass, then you really need to find out what’s going on,” he says.
“Are people booking my hotel and then doing something differently?
And the question is why. That’s why you want to have this data to ask the right
questions.”
And as the alternative accommodation sector continues to
grow – in fact accelerated by the pandemic - hoteliers should also “remove
their blinders” to understand what is going on across the total accommodation
market in which they compete.
“You need to broaden that view to know what’s leaking, what’s
going to someone else that you didn’t know because you were only looking at one
aspect: hotels. So total accommodation [reports] should be important to all
hoteliers,” Collazo says.