The hospitality sector is undergoing a significant transformation driven by advancements in cloud computing, data analytics, and the use of AI. These technologies are reshaping how hotels and other establishments interact with guests, manage operations, and enhance overall service delivery.
The role of the cloud is pivotal in this transformation. Offering flexible and scalable IT infrastructure, the cloud allows hotels to gather, manage, and analyze extensive datasets.
The ability of AI to predict guest preferences based on past behaviors allows for hyper-personalization of services, including the tailoring of experiences such as suggesting relevant activities or dining options, which can significantly enhance guest satisfaction and loyalty.
AI can streamline operations by optimizing room rates, anticipating maintenance needs, and even improving staff scheduling. All of this contributes to a smoother guest experience. The integration of AI in security systems allows hotels to monitor foot traffic and manage guest flow more effectively, further enhancing operational efficiency.
All these advanced capabilities offer advantages for financial management in hospitality.
The challenges for financial management with siloed data
The hospitality industry faces significant challenges when it comes to financial management and data integration. Many hotels and hospitality businesses still operate with siloed data across several properties, departments and systems. In an industry where revenue volatility and demand fluctuations are paired with high operating costs and expense control, managing cash flow and debt servicing need to rely on a robust and agile enterprise data strategy.
Johnny Clemmons is the Global VP and Industry Head for Professional Services, Construction, Travel & Transportation at SAP, a global leader in enterprise applications and business AI. Clemmons explains that operational inefficiencies caused by siloed data, often across multiple systems, lead to poor collaboration within teams and different business divisions. As a result, there is a lack of oversight across all operations.
“When you have siloed data in different departments, then revenue management, procurement, payroll and accounting may not have access to the same information,” Clemmons says. “That lack of integration could lead to inefficiencies like inaccurate financial reporting & forecasting, inefficient costs control & budgeting as well as compliance & risk management issues. The reconciliation of all those processes, across multiple systems, creates the operational inefficiency.”
As an example, inefficient cost control takes deeper roots into guest facing operations and marketing. Clemmons notes that without seamless access to data, marketing, operations, and customer engagement efforts become disjointed. Teams struggle to align on strategies, manage campaigns, and deliver a consistent experience to guests. This inability to share data fluidly across the organization creates blind spots and makes it challenging for hospitality businesses to make informed, data-driven decisions. Rectifying these issues takes up more time for staff and increases costs.
“Without that unified data, getting accurate reports and forecasts can become very challenging and it can hinder the businesses’ ability to make informed decisions,” says Clemmons. “You can’t manage your inventory levels effectively. You can’t plan properly for future demand. You don’t have that critical data at hand when you need it.”
This siloed reality leads to difficulty in scaling and adapting processes as the business grows. “As these hotel chains expand into multiple properties, operating in different geographies, processes become more complex and costly, limiting your ability to expand and adapt to changing conditions,” explains Clemmons.
Ultimately, these operational inefficiencies can have a significant financial impact, leading to higher costs, disparity in guest experience, dissatisfaction, and missed revenue opportunities for the hoteliers. Furthermore, dissatisfied guests may require compensation and even worst / offer their loyalty to the competition.
The platforms transforming financial management in hospitality
Clemmons says that the key to solving these issues is integrated cloud-based solutions – such as the new SAP Business Data Cloud solution – that enable the integration of data from various sources, both within SAP and external systems. This allows hospitality businesses to unify their data in a contextualized and highly secure manner, avoiding the need to replicate data into multiple systems for analytics.
In addition, AI-powered financial management tools can help automate repetitive tasks, provide real-time insights, and enhance decision-making. AI can be used to fully harness the power of a holistic Total Revenue Management (TRM) approach and optimize revenue streams across Rooms & accommodation, Food & Beverage, Meeting and Events, Ancillary products and services as well as distribution & channel management. In addition, when hotel chains achieve full data integration, they find themselves in a position to incorporate cost control, guest experience, and sustainable profitability into decision making.
The SAP Business Data Cloud is also designed to preserve the business context and security of the data, ensuring role-based access controls are maintained. This helps address the challenges of data security and integrity that can arise when integrating data from multiple sources. The fully managed SaaS solution combines financial and non-financial data layers to enhance decision-making capabilities. The platform unifies and governs all SAP data while seamlessly connecting with third-party data.
“Having the underlying technology that unifies all these things really provides you with that foundation for next-level AI-enabled financial management; making it much more efficient, reducing and eliminating the repetitive tasks,” says Clemmons. “What we’re talking about here is really unifying all your business data across your entire operation, both SAP and non-SAP, and exposing that data in a way that’s going to allow you to build out AI-based use cases that are going to support that next level of process improvement. It is all really helping you to see deeper into your data, enabling you to act on it much more effectively.”
To learn how SAP can support your hospitality goals, download the free paper below.
