How To Use Benchmarking To Evaluate Performance And Maximize Revenue
Introduction & Background:- Fergal Mc Carthy¦Luke Bourke¦Fergus Cooney- Early career in hotels – operations - finance… 2000 Caught a bug SaaS 2009 Benchmarking for hotels Ireland 2011 The call from hostels hostelbench
Benchmarking…history and evolution• Xerox believe that they formally invented/introduced benchmarking in early ‘80’s• Robert Camp Ph.D. • Introduced benchmarking to the logistics operation of Xerox in 1981 “..the continuous process of measuring our products, services and practices against our competition…” * • *The Healthcare Forum Journal, January-February 1993, Vol. 36, #1, as "The Source."
Benchmarking…history and evolution• Cobbler’s bench • “The term benchmarking was first used by cobblers to measure peoples feet for shoes. They would place someones foot on a "bench" and mark it out to make the pattern for the shoes” Wikipedia• Xerox Corporation in the 80’s • “the continuous process of measuring products, services, and practices against the toughest competitors or those recognized as industry leaders.” David Kearne CEO, Xerox Corp.
Benchmarking…history and evolutionWhat are the odds?*• Image courtesy of www.irishracing.com
Benchmarking…history and evolution..• Formally and informally • Racetrack – “bookies benchmark their odds “against recognised industry leaders” • Supermarkets – forever benching price of products • Automotive industry- benchmark everything from 0-60mph stats to fuel consumption • Informal “Ring-around” in hotels : “What are you selling at tonight ..?”
Benchmarking in Hotels Hotels – mid 1990’s • STR Global 2008 Acquisition and consolidation of: Andersen/Deloitte Hotel Industry Benchmark Survey: 1996 Overlook Hospitality Management of Stockholm The Bench – early 2000’s Small Independent Irish company Source: http://www.strglobal.com/about/History/STR_Global.aspx
Benchmarking in Hotels What happens? • Occupancy, Rate and RevPAR Used on a daily and weekly basis by over 40,000 properties worldwide • Suite of reports • Classified by City, Star-rating, CompSet
Benchmarking in Hotels Why? • Formalising the informal • Reducing resource time allocation • Consolidating channel search* • Ryanair & Southwest airline
Benchmarking in Hotels Consolidating channel search* • Findings: over 100 hotels – variable non-standard % of room stock • Attributed to multiple different channels • Compare like-with-like?
Benchmarking in Hotels Common platform • Weekly Submission with ultimate goal • “AN INFORMED DECISION!”
Benchmarking –the call from hostels! O Timeline - call came in 2010 – acted in Summer 2011 O Research - spoke with industry luminaries O Conclusion: Potential market worth exploring
Hostels ..the story so farO Beta trial since August/SeptO Break / fixO Ready to launch this month – Open for Business
How does it work…• Weekly Submission: • You submit your data online - beds sold and rate(s) - in confidence • Likewise your competitors confidentially submit their data
How does it work…• This generates a suite of reports – (demo to follow)• Region/City - Occupancy, Rate, RevPAB (Rev per available bed)• Competitive Set (Compset) – minimum 4 others aggregated
Business Application and benefits. Fundamental aim ¤ To help you make informed decisions And / Or ¤ To maximise you bed revenues for any given week
Security & Data Integrity¨ Data integrity ¡ All data is stored in a commercial ISP data center ¡ Is it safe? ú Data access is protected via a secure hash algorithm ú Server itself is firewalled¨ Can I retrieve my data in full if I leave the service? ¡ Yes – for 30days.¨ Will my data be passed on to third parties? ¡ No. Other than regional reports E.g. Hostel Occupancy for Dublin Nov 2011 was…
Here’s one I made earlier§ Brief Demo.§ Sample Id’s available to anyone looking to try this at home.
Back to the future“In four hours the ship blows up”...James Doohan• Revenues are only one aspect of benchmarking• Cost benchmarking…KPI’s• Feature kaizen