how to use benchmarking to evaluate performance and maximize revenue
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December 2011
hostelbench
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Introduction & Background:
- Fergal Mc Carthy¦Luke Bourke¦Fergus Cooney
- Early career in hotels – operations - finance…
2000 Caught a bug SaaS2009 Benchmarking for hotels Ireland
2011 The call from hostels hostelbench
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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."
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Benchmarking…history and evolution
• Cobbler’s bench• “The term benchmarking was first used by cobblers to measure people's
feet for shoes. They would place someone's 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.
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Benchmarking…history and evolution
What are the odds?*
• Image courtesy of www.irishracing.com
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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 ..?”
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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
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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
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Benchmarking in Hotels�Why?
• Formalising the informal
• Reducing resource time allocation
• Consolidating channel search*
• Ryanair & Southwest airline
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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?
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Benchmarking in Hotels�Common platform
• Weekly Submission with ultimate goal
• “AN INFORMED DECISION!”
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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
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Hostels ..the story so farO Beta trial since August/Sept
O Break / fix
O Ready to launch this month – Open for Business
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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
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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
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Business Application and benefits.
Fundamental aim
¤ To help you make informed decisions
And / Or
¤ To maximise you bed revenues for any given week
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Who’s interested?
� Owners / Managers
� Credit institutions
� Potential owners / investors
� Tourism boards – greater unity => Stronger lobby*
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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 algorithmú 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…
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Here’s one I made earlier
§Brief Demo.
§Sample Id’s available to anyone looking to try this at home.
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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
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Questions?
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www.Hostelbench.com
Nollaig Shona daoibh go léir…
…agus go mbeimíd ar ais arís le chéile an bliain seo chugainn
Go raibh maith agat a GoMio don cuireadh.
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Next year my profile will look less like this:
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And more like this:
*Image courtesy of Crystal Henrickson, www.Yelp.ca
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December 2011
hostelbench