Overview of the hospitality industry in Australia
The aim of this report is to discuss about the role of business analytics (BA) strategy in an industry. In order to understand the significance of business analytics strategy, the hospitality industry of Australia is used in practical manner. The report is also describing the existing problems faced by the hospitality organizations and successful implementation in the associated industry. In addition, the report is also describing advantages, challenges, drawbacks and recommendations to improve the business analytics strategy in a specific industry.
The hospitality industry of Australia is booming from last decades and playing an essential role in nation’s economy. In industry is providing several employment opportunities to the individuals to develop their career so that it has importance for the individuals in getting better employment opportunities. As well as, the industry is providing livelihood chances to more than 300,000 individuals over the nation. There are different subsectors of hospitality industry such as hotels, events, gambling, travel services, restaurants, tourist services, visitor attraction and food service providers. The spending of the visitors is predicted to reach $167 billion by the end of 2025, which is a big portion of the Australian economy. Australia is an attractive place, which attracts the visitors from across the world. The annual growth is continuously constant more than five percent over the past five years (Hotel Management, 2018). Due to growing industry, the investors have good investment opportunities in the country. In this concern, it is analyzed that hospitality industry has great importance in the nation’s economy. As well as, it is essential for the hospitality organizations to have appropriate business analytical strategy to make better business decisions and strategic moves in the business processes.
There are several drivers of adopting business analytics strategy for the hospitality organizations. These drivers are the challenges faced by the hospitality organization in the associated market. These problems or challenges are discussed as below:
Increasing competition: Due to growing growth the hospitality industry is becoming highly competitive and affecting to the associated organizations. In order to make competitive business strategy, it is essential for the hospitality organizations to adopt an appropriate business analytics strategy (Korte et al., 2013). The business analytics strategy will enable the organizations to analyze the generating trends in the market that are attracting to the customers. In this concern, the increasing competition is a major driver of adopting business analytics strategy in hospitality industry.
Drivers of adopting Business Analytics (BA)
Changing way of communication: In the developing technology, the way of communication is changing continually. The trend of social media is increasing in the organization. Most of the big brands are using different social media platforms to promote their services and communicate with the potential customers. As well as, the customer also prefer same way to get excellent services from the organization (Leugn et al., 2013). In this concern, development is also a big concern for the developing hospitality organizations.
Changing perception of the customers regarding the products and services: In the developing community, the customers are having more aware about the quality of the products and services. They prefer to quality food products that contains food ingredients and healthy for the health.
Hiring skilled and experienced staff: It is a big challenge for the hospitality to hire skilled and experienced to be competitive in the growing industry. Hiring skilled and experienced is essential for the hospitality organization to sustain in the highly competitive industry. This challenge is faced by 54% managers and hospitality business owners. In this concern, it is the major issue and driver of adopting business analytics strategy in organizations.
Customer satisfaction through product value is the end goal of each organization. In this concern, it is essential for the hospitality organizations to implement innovative ideas and services to pull in front of the competition and attract the customers. The business analytics strategy is helpful for the organizations in attaining these goals. The major benefits that can be achieved through business analytic strategy are discussed as below:
Helpful in quantifying company value: In the competitive industry, the organizations make efforts to retain the employees for long-term and drive the company in successful manner. With the help of business analytics, the hospitality organizations can measure value of the organization in numbers (Laursen and Thorlund, 2016). The management can use different data to have proper focus on operating activities that are keeping in line the value of the company.
Helpful in encouraging smart decision-making: It is essential for an organization to have fast development and movement in the business activities to stay ahead of the competition. The accessibility of the essential data provides power to the companies to make quick and accurate business decisions that can leverage the operational activities in desired manner (Akter et al., 2016). Therefore, the management should provide an access of vital data to the team to gain success. In this concern, business analytics strategy is helpful for the hospitality organization in making fast and quick decisions without consuming time.
Perceived benefits from the BA
Provides clear insight: The organizations can be more responsive regarding the changing circumstances and have find revealing insights in faster way. As well as, they can make decisions without consuming much time in understanding the happenings in the associated market. Different graphs, charts and other visual aids enable the decision-maker to take decisions in quick manner. In this concern, the business analytics strategy situates each member in faster motion (Holsapple et al., 2014). The data visualization technique in business analytics presents the data in more visualize and organized manner through which the organizations can understand the concerning issues in more professional and clear way.
Keep updated about the market changes: At present time, world is moving quicker than ever before. With the moving world, the mindset of the customer is also changing rapidly regarding products and services provided by the companies. It is essential for the organizations to be updated about these movements or changes in the community to be competitive (Holsapple et al., 2014). The management can protect the business from unpredictable movements with the help of business analytics process, which enables the organization to implement innovation in the services as per demand of the market.
Helpful in improving efficiency: The business analytics strategy is helpful in encouraging the cultural efficiency of an organization and teamwork, where the employees can express their insights clearly and contribute in decision-making process. Therefore, the hospitality organizations can improve their efficiencies of attaining organizational goals and objectives through considering business analytics strategy.
The hospitality industry of Australia has been employees the business analytics strategy in different ways for further development. Over the last decade, the technology is changing rapidly and providing advantages to the organizations to drive innovation and disruption in the hospitality industry. The hospitality industry adopted business analytics strategy in different ways, which are discussed as below:
Website optimization and personalized marketing: In the competitive and developing business environment, the hospitality organizations are providing personalized services to the visitors through processing and tracking the behaviour and attitude of the customers. The technological development has been enabled the organizations to provide personal touch and effective services to the customers (Simmons et al., 2011). The organizations can use personalized marketing services to attract and satisfy the customers in more preferred manner. For instance, a businessman visits to a hotel on a frequent basis. The hotel can target this person while planning next promotional campaign. The hotel can send email to the businessman by saying that “you have enjoyed our great hospitality services in past, so the hotel is providing a coupon for a free drink and appetizer to you on next visit in the hotel”. The hospitality organizations are using several similar personalized marketing automation instruments to provide more personalized services and attract the customers. Another way used by the hospitality organizations is website optimization through which the organizations are boosting their businesses among the competitive organizations. It is an effective way of promoting the business activities in the market to formulate a strong customer base.
BA strategy employed by the industry
Revenue management: In business analytics, the term revenue management is considered as an application of disciplined analytics through which the management can predict the consumer behaviour and attitude at micro level and can optimize the availability of the products with competitive price to maximize growth of revenue. Through the revenue management process the organizations aim to sell right product to right customers on right price. For this, the organizations analyze the alternative products and services in the market and compare them with their products and services for better decision. The application of revenue management is enabling the organizations to understand the customer perception about the value of the product concerning to placement, price and availability with each consumer segment (Bodea and Ferguson, 2014). In this concern, the hospitality organizations are analyzing past consumer behaviour, market demand, data related to competitors, daily pick-rates and different elements that are essential for the businesses. With analysis of entire data, the organizations can reach to smart conclusion.
Energy consumption: The business analytics strategy can also be used for the internal operation of the hospitality organization. It is analyzed that the approx 60 to 70 percentage of utility costs leads to consumption in hotels, which is essential to provide comfort for the visitors. However, the Australian hospitality industry is controlling the cost of energy consumption without disturbing the visitor comfort by consuming the energy in more efficient manner. The managers of the hotels are using modern software solution to collect relevant data about weather, rate of electricity and energy consumptions in buildings to construct a comprehensive ‘energy profile’ (Krishnamoorthi and Mathew, 2015). Through these efforts, the hospitality industry has reduced the cost of energy by 10 to 15%.
Investment management: The data analytics of investment are helpful for the organizations to transform the hospitality industry in the country. In Australian hospitality industry, the organizations are taking evidences based on pricing and customer cantered marketing strategy and return on capital invested in the industry to take better investment decision. The organizations are getting relevant information and considering this information while taking any investment decision in the industry.
The success of business analytics strategy relies to organizational alignment and process. Therefore, there are several challenges faced by the industry while implementing business analytics strategy. These challenges are discussed as below:
Expensive: It is analyzed that the process of business analytic strategy is much costly for the small organizations as the software of data collection and analysis are highly expensive (Mithas et al., 2013). The strategy leads to several expenses in different analytical activities that cannot be afford by the SMEs.
Absence of training: There is no any specific training and development program for the individuals to train them about the collection of data and analyze the collected data, which is a big challenge in Australian hospitality industry and decreasing the reliability of the end results of analytic strategy.
Absence of BA impact or low use of BI: It is analyzed that the administration of the organizations are using BA strategy in analyzing the market but they are not considering the analysis of BA strategy in proper manner, which is not good for the organizations in attaining long-term objectives.
Strategic alignment: It is analyzed that the business analytics strategy is used by the top executives of the organization. Therefore, there is lack of alignment trust and availability among the team members that can influence on their profitability in big manner.
Actually the BA strategy benefited for the hospitality organization in analyzing the current market trends in the industry that are influencing to business operations. As well as, the strategy provided a scenario of generating innovations in the industry that must be adopted by the organization to be competitive in the industry. Based on the collected data from this strategy, the decision making process of the organizations has improved in effective manner. In this concern, the strategy of business analytics became helpful for the hospitality organizations in improving their working efficiency in effective manner.
BA strategy has several advantages for the organizations however there are several drawbacks of the strategy. The major drawback of the strategy is that the implementation of the strategy wastes money and time of the organization. As well as, the BI strategy requires highly skilled personnel to manage the different analytical tools to get an appropriate and reliable conclusion (Vidgen et al., 2017). In addition, the BI strategy includes potential of high initial investment and significant maintenance cost that may influence to financial position of the organization.
Conclusion
From the above discussion, it can be concluded that business analytics strategy had played an essential role in transforming the Australian hospitality industry. Business analyst strategy has improved the efficiency of the organization of attaining the goals and objectives in the competitive market. Through an effective business analytics strategy the organizations can implement innovations in their operational activities and attain competitive advantages in the associated industry. It is also analyzed that there are several advantages and disadvantages of business analytics strategy that can influence to the business operations in big manner. Therefore, the organizations should consider these advantages and disadvantages while implementing business analytics strategy in the organization.
Based on the above discussion, it is analyzed that there are several challenges or drawbacks in business analytics strategy that are deceasing its importance in the hospitality industry. In this concern, it can be recommended that are organizations must implement training and development programs to improve the effectiveness of the business analytics strategy for the organization. As well as, the management should implement the end conclusion of the business analytics strategy in the organization to attain the competitive advantages and transform the industry in more opportunistic industry. The management should also involve the views of the employees while implementing the results of business analytics strategy to get better business results. In addition, the organizations should also make efforts to fine new and cost effective ways of business analytics strategy to collect and analyze relevant data for better of the organization.
References
Akter, S., Wamba, S. F., Gunasekaran, A., Dubey, R., and Childe, S. J. (2016) How to improve firm performance using big data analytics capability and business strategy alignment?, International Journal of Production Economics, 182, pp. 113-131.
Bodea, T., and Ferguson, M. (2014) Segmentation, revenue management and pricing analytics. USA: Routledge.
Holsapple, C., Lee-Post, A., and Pakath, R. (2014) A unified foundation for business analytics, Decision Support Systems, 64, pp. 130-141.
Hotel management (2018) Why Australia’s hospitality industry is booming. [Online]. Available at: https://www.hotelmanagement.net/transactions/why-australia-s-hospitality-industry-booming (Accessed: 11 October 2018).
Korte, D., Ariyachandra, T., and Frolick, M. (2013) Business intelligence in the hospitality industry, International Journal of Innovation, Management and Technology, 4(4), pp. 429-431.
Krishnamoorthi, S., and Mathew, S. (2015) Business analytics and business value: a case study.
Laursen, G. H., and Thorlund, J. (2016) Business analytics for managers: Taking business intelligence beyond reporting. USA: John Wiley & Sons.
Leung, D., Law, R., Van Hoof, H., and Buhalis, D. (2013) Social media in tourism and hospitality: A literature review, Journal of travel & tourism marketing, 30(1-2), pp. 3-22.
Mithas, S., Lee, M. R., Earley, S., Murugesan, S., and Djavanshir, R. (2013) Leveraging big data and business analytics [Guest editors’ introduction], IT professional, 15(6), pp. 18-20.
Simmons, G., Armstrong, G. A., and Durkin, M. G. (2011) An exploration of small business website optimization: enablers, influencers and an assessment approach, International Small Business Journal, 29(5), pp. 534-561.
Vidgen, R., Shaw, S., and Grant, D. B. (2017) Management challenges in creating value from business analytics, European Journal of Operational Research, 261(2), pp. 626-639.
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