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The Latest Strategic
Weapon for the
Lodging Industry?
Hotel companies can capture huge amounts of data about guest's buying
habits. But to store, retrieve, and use those data requires a special kind
of technology---the data warehouse.
The ability to collect, store, and process large amounts of data can provide hospitality companies with strategic competitive advantages. It can help managers make more effective decisions and fewer ineffective decisions. American Airlines, for example, analyzes hundreds of gigabytes (Gb) of data every day to support its yield-management activities. American Airlines CEO Robert Crandall estimates that these activities deliver the company an additional $500 million per year in revenue.1Even small companies find their need for large amounts of data has increased with their need for more and better information. Trend analysis, for example, requires a great deal of historical data no matter what size the company.
The latest concept for information handling is data warehousing. In a data warehouse a group or company develops a central information storehouse designed to answer business questions. The concept goes back to the mid-1980s and is generally credited to Bill Inmon of Prism Solutions.2
A data warehouse is a corporatewide database-management system that allows a company to manipulate large volumes of data in ways that are useful to the company: establishing sources, cleansing, organizing, summarizing, describing, and storing large amounts of data to be transformed, analyzed, and reported (see Exhibit 1). By contrast, a data mart is a smaller, more limited version of a data warehouse that is established for one group of users or for one subject area and is available to a relatively small number of persons (see Exhibit 2, on page 30). In this article I discuss the development and application of data warehouses and data marts.
Data warehouses and data marts are differentiated from traditional database systems by more than just their size, although size is a factor. While traditional database systems are capable of accumulating large amounts of data, their limits are soon exceeded when they are connected with operating systems, such as hotel reservation systems, that continuously feed the database. Traditional database systems also tend to break down when the quantity and intensity of queries expand to support intense analysis. In addition, traditional databases...