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The Analytic
Hospitality Executive
Wiley & SAS Business
Series
The Wiley & SAS Business Series presents books that help senior-level
managers with their critical management decisions.
Titles in the Wiley & SAS Business Series include:
Analytics in a Big Data World: The Essential Guide to Data Science and its
Applications by Bart Baesens
Bank Fraud: Using Technology to Combat Losses by Revathi Subramanian
Big Data Analytics: Turning Big Data into Big Money by Frank Ohlhorst
Big Data, Big Innovation: Enabling Competitive Differentiation through
Business Analytics by Evan Stubbs
Business Analytics for Customer Intelligence by Gert Laursen
Business Intelligence Applied: Implementing an Effective Information and
Communications Technology Infrastructure by Michael Gendron
Business Intelligence and the Cloud: Strategic Implementation Guide by
Michael S. Gendron
Business Transformation: A Roadmap for Maximizing Organizational
Insights by Aiman Zeid
Connecting Organizational Silos: Taking Knowledge Flow Management to
the Next Level with Social Media by Frank Leistner
Data-Driven Healthcare: How Analytics and BI are Transforming the
Industry by Laura Madsen
Delivering Business Analytics: Practical Guidelines for Best Practice by
Evan Stubbs
Demand-Driven Forecasting: A Structured Approach to Forecasting,
Second Edition by Charles Chase
Demand-Driven Inventory Optimization and Replenishment: Creating a
More Efficient Supply Chain by Robert A. Davis
Developing Human Capital: Using Analytics to Plan and Optimize Your
Learning and Development Investments by Gene Pease, Barbara
Beresford, and Lew Walker
The Executive’s Guide to Enterprise Social Media Strategy: How Social
Networks Are Radically Transforming Your Business by David Thomas
and Mike Barlow
Economic and Business Forecasting: Analyzing and Interpreting
Econometric Results by John Silvia, Azhar Iqbal, Kaylyn Swankoski,
Sarah Watt, and Sam Bullard
Foreign Currency Financial Reporting from Euros to Yen to Yuan: A Guide
to Fundamental Concepts and Practical Applications by Robert Rowan
Harness Oil and Gas Big Data with Analytics: Optimize Exploration and
Production with Data Driven Models by Keith Holdaway
Health Analytics: Gaining the Insights to Transform Health Care by Jason
Burke
Heuristics in Analytics: A Practical Perspective of What Influences Our
Analytical World by Carlos Andre Reis Pinheiro and Fiona McNeill
Hotel Pricing in a Social World: Driving Value in the Digital Economy by
Kelly A. McGuire
Human Capital Analytics: How to Harness the Potential of Your Organization’s
Greatest Asset by Gene Pease, Boyce Byerly, and Jac Fitz-enz
Implement, Improve and Expand Your Statewide Longitudinal Data
System: Creating a Culture of Data in Education by Jamie McQuiggan
and Armistead Sapp
Killer Analytics: Top 20 Metrics Missing from Your Balance Sheet by Mark
Brown
Predictive Analytics for Human Resources by Jac Fitz-enz and John
Mattox II
Predictive Business Analytics: Forward-Looking Capabilities to Improve
Business Performance by Lawrence Maisel and Gary Cokins
Retail Analytics: The Secret Weapon by Emmett Cox
Social Network Analysis in Telecommunications by Carlos Andre Reis
Pinheiro
Statistical Thinking: Improving Business Performance, second edition,
by Roger W. Hoerl and Ronald D. Snee
Taming the Big Data Tidal Wave: Finding Opportunities in Huge Data
Streams with Advanced Analytics by Bill Franks
Too Big to Ignore: The Business Case for Big Data by Phil Simon
The Value of Business Analytics: Identifying the Path to Profitability by
Evan Stubbs
The Visual Organization: Data Visualization, Big Data, and the Quest for
Better Decisions by Phil Simon
Using Big Data Analytics: Turning Big Data into Big Money by Jared Dean
Win with Advanced Business Analytics: Creating Business Value from
Your Data by Jean Paul Isson and Jesse Harriott
For more information on any of the above titles, please visit www
.wiley.com.
The Analytic
Hospitality
Executive
Implementing Data Analytics
in Hotels and Casinos
Foreword xiii
Acknowledgments xvii
ix
x ▸ C o n t e n t s
Conclusion 337
Additional Resources 340
Notes 341
References 385
Index 389
Foreword
Data, it has often been claimed over the past several years, is the new
oil. I’m not convinced this is entirely true, but there are some curious
similarities. Just as oil slumbered as an unappreciated resource until
the late nineteenth century and then awakened wholesale changes
to the world economy, data in many ways has the potential to do the
same. But in contrast to oil that sat beneath the earth for thousands of
years relatively undetected, data is flooding all around us in seemingly
unmanageable variety and volume. Data is everywhere, but perplex-
ingly the more we have of it, the more it becomes increasingly difficult
to harness and exploit.
This is particularly true in the hospitality industry where our cul-
ture has been historically high touch and low tech. Yet, every hour
of every day hotels, restaurants, and casinos generate millions of data
points as customers interact with reservation systems, loyalty pro-
grams, credit card exchanges, point of sale systems, and simply check
in and out of hotels. Although the traditional success of most hospital-
ity companies has largely been due to their ability to use customer ser-
vice, facilities, and location as differentiators, this is no longer enough.
Today, our service-driven industry has become extremely compet-
itive in almost every way conceivable. For small and large companies
alike, there has never been a time with more focus on performance—
financial performance, stock price, customer loyalty, market share,
you name it. The competitive landscape has quickly transitioned to
finding a way to best use data to drive strategy and performance.
As a hospitality industry executive and consultant for almost 30
years, I have witnessed this transition firsthand and I can appreciate
what a challenging journey it has been and continues to be for many
of us. Although I have enjoyed some success over the years helping to
drive the adoption of data-driven decision making and performance
enhancement during my time with Pricewaterhousecoopers, Host Hotels &
Resorts, and now Hilton Worldwide, I really wish Kelly McGuire
could have helped me out and published The Analytic Hospitality
xiii
xiv ▸ F o r e w o r d
Executive 25 years earlier. As you will soon realize when reading her
book, Kelly serves up a brilliant recipe for understanding all of the key
principals in a readable and business-faced format. If you are think-
ing about becoming a better analytic hospitality executive, then this is
your guidebook.
I first met Kelly when I joined the advisory board for the Center for
Hospitality Research at Cornell University’s School of Hotel Adminis-
tration. We are both alumni; she with a master’s degree and a PhD,
and I with an undergrad degree many years earlier. What impressed
me about Kelly when we first met was that I immediately recognized
her as an “hotelier.” Not solely an academic mind, she had that rare
combination of technical intelligence matched with a keen apprecia-
tion for the business of hospitality. It’s actually easy to see how she
came up with The Analytic Hospitality Executive because that is who she
is. I know her to be an analytics evangelist who is passionate about
helping the hospitality and travel industries realize the value of data-
driven decision making.
In this book, Kelly McGuire masterfully articulates the keys for
successfully building a strategic analytical culture in your h ospitality
organization. She will emphasize the absolute necessity for senior
executive–level buy-in and support. Additionally, she will stress the
need for an organizational commitment to fact-based decision m aking
and the allocation of the right business resources. Not just dollars
allocated to technology, but the dedication of the business to t ransition
to an actionable data-driven decision-making process. The days of
devoting 80 to 90 percent of resources to data collection and validation
need to come to an end.
There is no message that resonates more strongly from Kelly’s book
than that it’s all about the data. If you learn nothing else from this
book and the real-life stories depicted within, please take one word of
advice from those of us who have walked the path. Start with the data.
As Kelly explains in this book, data is often not the sexy part of an-
alytics. The potentially rich data trapped in fragmented legacy systems
like those prevalent in the hospitality industry are plagued with chal-
lenges. The possible solutions often lack clear ownership and funding
as other priorities jump to the front of the line. In my view, this is
always shortsighted as getting the data right is perhaps the most im-
portant building block for success.
F o r e w o r d ◂ xv
Much like my golf game, it’s always more appealing to find a short-
cut. Hard work and practice are no fun for most of us. Every year there
is new driver technology that promises to let us all hit it right down
the middle and 50 yards further. Why take lessons and practice when
you can just buy new technology? Of course that strategy continues to
disappoint in lowering my handicap.
Similarly, many executives are often too eager to embrace the
popular new technology and the vernacular of the day. Lately, big data
seems to be the magic term that gets everyone excited. As Kelly will
explain, today’s big data is tomorrow’s small data. It’s not just science;
there is a lot of art as well. Being too quick to buy a shortcut solution
and rush to fancy dashboards without focusing on the underlying data
and organizational alignment almost always lead to failure.
In my experience, and as Kelly describes in this book, data is the
key to the successful creation of a strategic analytical culture. It’s the
business taking ownership and demanding a “single source of truth.”
It’s the commitment to establishing a common business language and
what Kelly describes as a sound and sustainable data management
strategy.
In this amazing book, Kelly McGuire will provide a tool kit to help
all of us navigate the path to a strategic analytical culture in our orga-
nizations. She understands the challenges hospitality companies are
facing in these highly competitive times. Strategically leveraging data
has never been more important. We all need to be better analytic hos-
pitality executives. In that regard, this book is essential.
The experience of writing this book was very different from writing
the first one. Of course, changing jobs and moving right in the middle
of the process definitely influenced that. Having this project did add a
little bit of stress, but it also helped me through the transition. It was a
constant that reminded me of my passions and interests, as I was figur-
ing out what to do with my extra furniture or trying to find a new dry
cleaner. Of course, now that it’s ready to be published, I suddenly have
fewer excuses for not unpacking those last few boxes. . . . As with my
first effort, the best thing about the process was that it gave me an ex-
cuse to reach out and reconnect with people who inspire me, and who
I so very much enjoy speaking with. There is a fantastic community of
dedicated analytic hospitality executives out there, and I am humbled
and privileged to be a part of it.
I must start out by once again thanking the team at SAS that
helped me through this book so soon after the first. My development
editor, Brenna Leath, and my marketing support, Cindy Puryear, in
particular, have made this process both easy and fun. Thanks for being
responsive, even after I left the fold.
I also want to thank my previous boss, Tom Roehm, for pushing me
to do this. One book wasn’t going to be enough; I had to write two to
prove, actually, I can’t really remember what I was trying to prove . . .
but I’m glad I felt I had to. I must thank my new boss, Jeremy
TerBush, for being open to letting me see this through, for his genuine
excitement about the project, and for how much fun we have had and
will continue to have making a difference for the business, for our
stakeholders, and for the careers of the individuals on our team. I have
admired Jeremy’s dedication, leadership, and achievements from afar
for many years. It is an honor to be a part of his team.
A special thanks goes to Dexter Wood, for sharing his experience
and his perspective through this process. Conversations with Dex
inspired a lot of the thinking that went into the book. He pushed me to
challenge the material and myself, and it is much appreciated. Thank
xvii
xviii ▸ A c k n o w l e d g m e n t s
you for authoring the foreword and the case study in Chapter 2, but
more important for believing in the value of data analytics, for believing
in this project, and for believing in me. And speaking of Big Red Ana-
lytic Hospitality Executives, I very much appreciate the genuine enthu-
siasm and passion that Dave Roberts has for analytics and for revenue
management. He has been a great inspiration and a great advocate.
Thank you, Dave, for your tireless pursuit of the importance of analyt-
ics in hospitality! I also appreciate the support and inspiration from Ted
Teng, a consummate #hotelieforlife, whose dedication to advancing the
industry and the people in it has been an inspiration to us all.
Many people generously gave their time to this project, and it is
much appreciated. My partner in crime, Kristin Rohlfs; my other part-
ner in crime, Natalie Osborn; and Alex Dietz, Anne Buff, and Analise
Polsky lent me their expertise as technical editors, and the book is
much better for it. Dave Roberts, Jeremy TerBush, David Koch, Ber-
nard Ellis, David Turnbull, R. J. Friedlander, Natalie Osborn, Paul van
Meerendonk, Kate Kiesling, Fanie Swanepoel, and Andy Swenson
took time from their very busy schedules to lend their expertise to
lengthy case studies. Michael Smith and Kate Keisling took a panicked
phone call at short notice when I realized I was out of my depth. I
also very much appreciate the inspiration provided by the analytic
hospitality executives who let me quote them, learn from them, and
be inspired by them.
Speaking of analytic hospitality executives, two more of my favor-
ites should be personally recognized for their support of me and my
efforts. Thank you, Mark Lomanno and Tom Buoy, for sharing your
critical and thoughtful perspectives with me and letting me run with
them, for your passion for the industry, and for the time you have
spent making me and others better at what we do. I also appreciate
the encouragement and advice from Gary Cokins, another prolific SAS
author, and from Michele Sarkisian, whose passion for all things hos-
pitality is both remarkable and contagious.
I highly value my relationship with the global team at HSMAI,
who have been great advocates for education and the advancement
of the hospitality industry, and great supporters of me as well. I must
thank Juli Jones in particular, who works so hard and is so good at
Acknowledgments ◂ xix
1
I believe in intuitions and inspirations. . . . I
sometimes feel that I am right. I do not know
that I am.
—Albert Einstein
H
ospitality executives struggle to find the balance between deliver-
ing a guest experience that fosters loyalty and repeat business, and
delivering on their revenue and profit responsibilities to stake-
holders, shareholders, or franchisees. If you invest too much in the
guest experience, you could impact profits, but if you focus on too
many cost-cutting measures to drive profits, you can negatively impact
the guest experience.
Decisions made in one department of a hotel can have impacts
across the organization. For example, without a good understanding
of food cost, a marketing program providing restaurant discounts could
affect profitability. Without understanding check-in and checkout pat-
terns, a labor-savings initiative might create long lines at the front desk,
impacting the guest experience. Today, your service mistakes are broad-
cast through social channels and review sites as they happen. The com-
petition is no longer just the hotel next door, but it is also third-party
distribution channels and alternative lodging providers like AirBnB, all
waiting in the wings to win your guests from you. On top of all that,
recent merger and acquisition activity is creating scale never before seen
in this industry, and global economic conditions continue to be unstable.
When the stakes are this high, you need something to help shore
up that balance between delivering an excellent guest experience and
meeting profit obligations. Analytics can be that thing. Tarandeep
Singh, Senior Director, Revenue Performance and Analytics, Asia,
Middle East, and Africa says, “Analytics is like GPS—it helps you be
on track, and even pings you when you go off.” Fostering a culture of
fact-based decision making ensures that the organization can find the
right direction, understand the trade-offs, hedge against risk, know
the next best action, and stand the best chance to be competitive in an
increasingly crowded marketplace.
Einstein reminds us in his quote at the beginning of this chapter
that there is still room for intuition and inspiration in this vision. Your
2
Building a Strategic Analytic Culture in Hospitality and Gaming ◂ 3
So, what does a strategic analytic culture (SAC) look like? Figure 1.1
outlines the interrelated components of a SAC.
Executive
management
commitment
Enterprise Commitment
use of to data
analytics management
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