What are you rooting for — Data or Gut?
Dear diary,
After my strategy call with a hotel last week, I learned a vital business rule- always maintain a balance between data analysis & gut feeling.
In the call, I had noticed that according to the data, the hotel was performing exceptionally, after the slow-down of the pandemic & people traveling again. The data suggested immense growth as compared to last year's same month, and I was elated to share it with the property.
However, the owner was not convinced of their over-the-top performance, and he told me that his gut told him things just couldn’t be this good!
In such a scenario, the revenue manager would judge an owner to be a pessimist, right? After all, how could the data be wrong?
“We should be doing even better”, said the owner. Of course, I dove deeper into the data and realized that we had been comparing the current performance with 2020.
Compared to how terrible Spring of 2020 was, any performance was bound to look exceptional!
So, I changed the parameters, and compared current performance with the performance in the year 2019 and was surprised to see the growth falling to half of 2019.
The owner’s gut feeling was right, and it quickly exposed the flaw in my analysis.
However, we also noticed that in 2019 the hotel was running special discounts for guests who stay longer, and current trends pointed towards the opportunity to apply the same special discount for the current year.
Even though the owner was now skeptical of the data, he decided to go for it.
As a result, the property started seeing reservations that flew into the property like bees into a honey bowl. This time data patterns did suggest the right thing for the property.
I Learned an important lesson that day: We should rely both on data as well as on gut feeling.
While relying on any one of the factors alone can be deceiving, we should try to strike a balance between the two. In this case, the owner’s gut feeling was based on his experience with the hotel and the flow of business, so it was that combination of his experienced-based gut and my data backup that led us both to the right solution for the problem.
Therefore, we need the “gut-check” to validate what the data is telling us– but there will always be patterns in the data that our “gut” might not initially pick up.
