Actabl Wants to Revolutionize the Way Hotel Operations Teams Leverage Data
By Jordan Hollander
Last updated October 28, 2022
8 min read
Commercial teams in the hotel industry have come a long way in leveraging data across departments like revenue management and marketing - but hotel operations for the most part still remain in the dark ages with hoteliers making decisions based on feel and conjecture.
Remember when retail behemoth Target learned how to leverage website browsing data to predict pregnancy? The data that lead to this goldmine of an insight was somewhat surprising, “Many shoppers purchase soap and cotton balls, but when someone suddenly starts buying lots of scent-free soap and extra-big bags of cotton balls, in addition to hand sanitizers and washcloths, it signals they could be getting close to their delivery date.” This insight gave Target a competitive advantage in the highly lucrative “new-mommy” category so imagine what kinds of competitive advantage could be unlocked at your property using similar techniques.
Every hotel GM, operations manager and management company knows that there are a myriad of opportunities to generate more efficiencies (and profit) in their businesses but historically it’s been incredibly difficult for hotels to see true cause and effect in a brick and mortar environment. The key barrier to making these connections is a lack of insight on the impacts between inputs and outputs. In the Target example, the retailer’s ecommerce website analytics and sales data are fully integrated which made that insight possible - but the integration of inputs and outputs typically isn’t present in hospitality operations.
For example, let’s say you want to run a test to see if sending a different sequence of upsell messages to guests yields a material change in total guest spend. Historically, hoteliers could see how those upsell messages directly converted but couldn’t see whether that guest was more likely to book a massage, for example, if they didn’t convert with that exact promotional campaign. There are literally thousands of small experiments hoteliers can run to optimize their businesses. But, since inputs and outputs haven’t historically been in the same dataset it’s been challenging to justify outside the box experimentation.
The secret sauce behind the success of tech giants like Google, Airbnb and Amazon are precisely in their ability to run consistent, rapid tests over extended periods of time to develop compounding gains (and a competitive advantage). What if you could easily run dozens of small experiments in your brick and mortar hotel business that would compound over extended periods of time to drive dramatic improvements?
The team behind Actabl believes that they can do exactly that by bringing data science into hotel operations.
Actabl, launched on June 28th at HITEC 2022 in Orlando, is the brainchild of leading technology investment firm ASG and is a culmination of their vision for the future of hospitality. ASG has strategically acquired several leading tech firms in the space and is now bringing them together to provide hoteliers with a completely new kind of operational tool that will enable rapid compounding experimentation.
Actabl has some BHAGs (big hairy audacious goals) that they are aiming to accomplish that will unlock value for hotels. Actabl wants to:
- Combine insights and operations to create a feedback loop that will allow hotel operators to build a living playbook that serves as a new standard for operations.
- Empower hoteliers with actionable (or ‘Actabl’) data from across their tech stacks so that they no longer have to “shoot from the hip.”
- Allow hotel operations teams, for the first time ever, to set up optimization ‘experiments’ and measure the true impact of initiatives by controlling inputs and outputs under one roof.
- Launch a hotel operations data science renaissance like the ones that revolutionized revenue management in the 90s and digital marketing in the 2000s.
Actabl’s vision is to bring digital attribution to brick and mortar hotel businesses. For brands: Actabl will unlock opportunities for the big chains (who don’t control assets) like never before by bringing together operational data from franchisees into a single, actionable business intelligence dashboard. For independents: Small and medium sized operators will be able to run experiments like large enterprises and access data and benchmarks beyond the scope of their four walls.
In this article, we’ll dive into the opportunities that are being unlocked as Actabl brings these historically distinct datasets under oneroof.
Understanding the Product Suite Behind Actabl
ASG has strategically acquired four companies in the last few years based on each tool’s unique ability to connect the operational inputs and outputs that unlock value for hotels.
ASG’s first acquisition in the space was Transcendent, a CapEx planning and enterprise asset management tool that is widely used among large chains. More recently, in 2021, ASG acquired the award-winning staff collaboration, guest services, and operations platform, ALICE. ASG’s latest acquisition, also announced at HITEC Orlando 2022, is the hotel industry’s premiere labor management optimization provider - Hotel Effectiveness. With regards to inputs, ASG has now compiled datasets around operations KPIs, maintenance, capital expenditures and labor.
The last piece of the puzzle was getting to the outputs - specifically how can you track the financial outcomes from any changes to the aforementioned operational inputs or processes? In November of 2020, ASG acquired leading BI tool and financial reporting software, Profitsword, which, when combined, will track the results of the operations and labor management functionality from ALICE, Hotel Effectiveness, Transcendent, and over 250 integrations partners.
Most hoteliers will be familiar with at least one of Actabl’s sub-brands each having strong track records in the hospitality industry:
Connecting the Dots: Labor, CapEx and Operations KPIs
So, what is possible when connecting these three operational inputs businesses directly into Profitsword’s reporting data? Hoteliers will be able to unlock insights that were previously unattainable.
To better understand the potential of bringing these products under one roof, HotelTechReport sat down with a hotel technology executive who is experienced with both Transcendent and Hotel Effectiveness. The prospect of bringing these products under one roof and combining them with the ALICE product suite is something that the veteran IT exec is particularly excited about.
“Having disparate data is a problem in all hotel groups and any hotel IT person will tell you that their biggest pain point is around software integrations. The Actabl suite has the potential to solve these critical issues that hold the hotel industry back,” says the executive. “Workaround integrations that rely on PDF exports, Excel data entry or XMLs are bogged down by page break errors, data integrity issues, and frankly, make it nearly impossible to leverage the data beyond the most basic use cases. Actabl will undoubtedly solve those issues; but, what I’m even more excited about is what this combination of tools can do in the medium to long term. The thing that excites me most about this combination are the things we don’t even know are possible yet by bringing these datasets into the same view."
Beyond the executive's excitement about the short term pragmatic solutions for integrations and data integrity issues, he is an Actabl bull who sees tremendous potential in the firm’s ability to leverage artificial intelligence (A.I.) to unlock surprising insights and opportunities for hotel operators.
In the short term, deeper integration between the Actabl sibling tools will unlock insights that hoteliers wish they could access today but can’t easily uncover. For example, by bringing preventative maintenance (Transcendent) and labor management (Hotel Effectiveness) into a single system, a hotel could make better decisions around expensive equipment like PTAC systems (heating and cooling).
Imagine a scenario where a management company has two preferred PTAC systems - an expensive one and a cheaper one. To the average operator this might be a commodity where they’d opt for the cheaper unit; however, if an operator could associate each unit with labor hours in Hotel Effectiveness they might uncover that the “cheaper” unit is in fact more expensive over the lifetime of the asset as it requires significantly more maintenance (i.e. labor hours). Now imagine going one step further by integrating Profitsword’s financial reporting data. The same hotel group might uncover that due to the cheaper PTAC unit’s required maintenance - rooms with that unit experienced more downtime. So not only can a hotel owner track which unit is more expensive when it comes to long term labor expense, but they could also add the opportunity cost (i.e. lost revenue) from room downtime into their calculation.
Previously, hoteliers couldn’t analyze a cost center requiring maintenance like a PTAC unit from the lens of how much lost revenue the unit cost the hotel.
Here are some more examples of experiments that hoteliers can run with Actabl:
- By connecting ALICE with Profitsword…hoteliers will be able to set up an experiment to see the indirect correlation between upsell messages sent via ALICE and total guest spend through Profitsword.
- By connecting Hotel Effectiveness with ALICE…They’ll be able to see not just the fact that they are over or underspending on housekeeping but go deeper to understand why that is the case.
- By connecting Transcendent to Profitsword…Actabl can also help hoteliers compare Transcendent CapEx budgets to Profitsword actual numbers.
The first phase of Actabl is about combining revenue, maintenance, labor and service request data into one unified view to yield new insights and the next step is unlocking human potential with this data. Most management firms have large data analyst teams. Management company data teams spend a significant amount of time exporting, auditing and cleaning data. For example, team members may have to manually export labor utilization data from Hotel Effectiveness then run a VLOOKUP in Excel to align that data with Profitsword data. This doesn’t sound like a huge task but let’s say this is run on a monthly basis and takes 30-minutes to execute. Now you have about 20 of those reports that need to be exported, combined and audited before analysis can begin - that’s 10 hours each month that can now be deployed towards higher value analysis such as running operational experiments like the ones we’ve listed above.
Eliminating these manual data hygiene processes doesn’t just help human analysts get straight into high value work - but it unlocks the potential to perform what the executive calls, “true business intelligence,” i.e. leveraging predictive A.I. and machine learning. Homogeneous, accurate and unified data is the prerequisite for unlocking the potential of artificial intelligence and the combined products under Actabl are in arguably the best position in the industry to begin unlocking this highly lucrative asset.
Enabling Hotels to Unlock the Power of Testing
As the rest of the world enters the era of Web3, the world of hotel operations is still grappling with Web 2.0 largely as a result of the hotel data problems that the hotel IT exec laid out in our interview. For the first time ever, Actabl is bringing operations data like preventative maintenance, labor management, guest requests and housekeeping under the same roof as revenue data (and the broader P&L). This combination has the potential to unlock experimentation capabilities and, in turn, unprecedented creativity within hotel operations.
To illustrate why the combination of inputs and outputs under one roof is so game changing let’s look at Google. Google’s trojan horse competitive advantage is Google Analytics. By providing free analytics software to website owners, Google can also leverage that behavioral data to develop better search results. Imagine a user searches for “red shoes” on Google, lands on a page with red tap dancing shoes and immediately comes back to Google as they were searching for red tennis shoes. That behavioral data (the output) or what happened when the user landed on the page, namely the bounce and return, gives Google unique insight into how it should be ranking pages (the input) providing a highly effective feedback loop that ultimately has created the best search experience on the planet.
Google needed a trojan horse to bring both inputs (web searches) and outputs (website behavior) under a single roof - but hotels don’t. Hotels already have access to both of these data sets, the problem is that the data historically wasn’t standardized into a single system and therefore could not be acted upon - until Actabl.
There are thousands of unique insights that can be uncovered by connecting operational inputs with financial outputs in hospitality but the most exciting piece will come by applying machine learning to this new unified dataset within a property, across a portfolio and eventually across the entire industry. Hotel operations strategy is on the verge of a data renaissance similar to what revenue management has experienced over the last 20 years and Actabl is redefining what the next generation of hotel operations software will look like.
This article was created collaboratively by Actabl and HotelTechReport