It haunts your every KPI, even though it has already been buried, deep in your archives: STLY, same time last year.
KPIs remain mostly meaningless without context, but who wants their dashboards cluttered up by context? So operators reach for benchmarks. And while every benchmark has its quirks, none enjoys derailing decision-making as much as STLY does.
Be misled
STLY compares today’s values to those archived for the equivalent day last year. So we can immediately judge whether we’re doing better or worse, since it’s the one constant in a sea of fluctuating variables. It feels objective, but in fact isn’t.
Basing today’s decisions on STLY is like determining today’s Grand Prix winner by comparing their split times to last year’s winner’s – last year. In last year’s weather, on last year’s track.
It can be a useful reference point, if fully understood. Because „same time” is not same time, but 365 days old. Last year was played under different conditions. So while handy, it’s but one data point to form the full circle of context.
Be Paralysed or Panicked
Over-reliance on STLY pushes decision-makers into one of two traps: „Ahead of STLY” breeds complacency. The human psyche instinctively becomes reluctant to take any action when „things are going well”, justifying their fear of rocking the boat by proverbs like „if it ain’t broken…”. Until you’re blindsided by reality. And we all know strategic measures usually come into full effect mid-term, rather than „saving the day”.
In contrast, „behind STLY” triggers knee-jerk actions, especially in hotels without live forecasts. Owners see red (in variance indicators) and reflexively demand „remedies”. Managers scramble, treating symptoms with cosmetic fixes – often trading profit for volume.
This human reaction is predictable. The machine’s, unfortunately, is no better. Think your RMS’ AI was any less prone to panicky reactiveness? Just like the good staffer, it has been trained to max occupancy, then max rate, no questions asked. Nowhere did the developers bother to explain the concept of „profitability” to them.
So when your owners or your RMS – or both – ask which emergency measures you are going to adopt to „catch up”, it doesn’t just require a broad and thorough reading of all available data in context and good factual arguments, what’s needed is also strength of character and, in case of the owners, inter-human communication skills. The latter of which not all of those highly analytical artists possess who are expertly running revenue management.
Enter The Panic Spiral
When I was working on the systems of a middle sized hotel group, I could not but notice some of their moves in Revenue Management. To be honest with myself, I may have even kept a pretty critical eye on those, since I was puzzled they did never approach me for any inputs I might have been able to contribute. Their systems and reporting structure were solid, albeit focusing backwards. The eminent benchmarks were the budget, drawn up the previous year, and of course STLY. In-depth market trend analysis and forecasting were noticeably absent.
The various departments stirred into high gear only when some areas obstinately refused to cross the red line etched into their diagrams by STLY. The activity concentrated on stopgap measures however, to achieve results quickly – which, of course, were forthcoming. Rather than starting with a diagnosis of the cause, symptoms were being treated. Unfortunately, often by placebos in shiny packaging, such as „channel diversification”. That is to say, spray-and-pray for quick revenues by eroding margins. Fire sales under a buzzword fig leaf, costing them their strategic positioning and sustainability.
C-level nodded approval – and promptly identified room for cuts in the commercial department’s staff.
Quite another story launched one of my current projects. A hotel spotted their new RMS relentlessly slashing rates, took it offline and called me in to get „the config fixed”. Though, it turns out there was never anything faulty with the software’s configuration. The algorithm just reacted according to its core programming, because the property was „behind STLY” – ignoring that the only difference was a shorter booking window, while actually tracking ahead in demand. The system treated a reporting artefact like a market collapse.
Management sighed relief – their expensive software was fine, just temporarily under-supervised.
Be driven, or understand the drivers
Between the Scylla of panic and the Charybdis of paralysis, to captain a revenue cutter one must read the currents of underlying trends, not react to superficial waves of variances.
Live forecasting not only lets you determine where you stand, but also how you came to be there, and gauge where you will probably end up. All corrective measures can then be based upon our best reading of the future, instead of the past – entailing only the calculated risk of us making a wrong choice, now and then. The greatest challenge about it is to communicate all this in a digestible way. Especially challenging for those of us who’d rather Excel than PowerPoint.
The complex interpretation of multiple metrics is, however, demanding, time consuming, and inherently prone to error. The true evolution of Revenue Management Software through Artificial Intelligence, in my opinion, is not primarily to suddenly „do the better pricing”. Processing millions of data points in seconds is impressive — yet still just a physicist’s quantum leap from the old algorithms. The businessman’s quantum leap is something else entirely: giving the user context.
Zombie vs. AI
A modern example might look something like this:
ADR for May trending upward: +2 % vs. budget, +4 % vs. STLY. Main driver: apartment bookings through newsletter campaign. Pick-up remains strong – recommend +5 % weekend rate adjustment. Confirm?
That’s no longer just raw data – it’s context at a glance, expressed in natural language.
Whether through more advanced RMS or the experienced people behind them, the real step forward will be systems that communicate like this:
ADR for May continues to rise and now sits above both budget and STLY. Driver: your successful newsletter marketing for apartments. Those are nearly sold out – hold back the rest for longstays. Lower categories are booking more slowly – keep prices steady there. ADR will normalise once cheaper rooms fill. Hold connecting standards for families who missed apartments. The individual segment is likely to finish the month several thousand euros ahead of budget.
Pro tip: Your boardroom dashboard won’t talk – no matter how long you stare at it. Your revenue manager might. You just have to listen.
