The Power of Process Mining and its Applications in the Hotel Industry

Posted August 13, 2024

Process Mining Overview

Process Mining uses event logs (which relates to digital prints) to analyse business processes. It provides companies with an ‘X-Ray’ of their processes, and how they look, by identifying all process variants (what is not part of the ‘ideal’ process). Process Mining relies on building Data Pipelines to centralised digital prints across various systems into Event Logs. By extracting knowledge from event logs readily available in today's information systems, process mining offers insights into process performance and identifies areas for improvement.

How Process Mining Works

• Data Extraction: Data pipelines are built, and event logs are collected from various IT systems within the organisation.
• Process Discovery: Process mining systems analyse these logs to create a visual model of the actual processes. Compared to traditional process mapping techniques, process mining capabilities allow precise identification of all process variants.
• Conformance Checking: The discovered models are compared against predefined models to check for deviations. Variants are studied and companies can narrow down variants to most impactful once: Where do companies lose time and/or money. This helps with identifying bottlenecks, identifying key automation opportunities, and improving workflow.
• Enhancement: Insights from the analysis are used to improve and optimise processes. Changes can be simulated before implementation, KPIs are specified, and dashboards help monitor processes in real-time.

Benefits of Process Mining

• Increased Transparency: Provides a clear view of how processes are executed, including all processes variants.
• Improved Efficiency: Identifies bottlenecks and inefficiencies, helping data-driven decisions to prioritise key areas of improvements.
• Enhanced Compliance: Ensures processes conform to regulatory standards.
• Better Decision-Making: Data-driven insights support strategic planning.

Trends, Technology, and Future Needs in the Hotel Industry

The hotel industry is rapidly evolving, driven by technological advancements and changing consumer expectations. Key trends include:

• Digital Transformation: Adoption of digital tools for enhancing guest experiences and increasing automation capabilities.
• Personalisation: Tailoring services to individual guest preferences using data analytics. The industry tends to move away from traditional customer membership and rewards to personalised experience and exclusivity.
• Sustainability: Implementing eco-friendly practices and technologies. Sustainability and ESG adoption for the hospitality industry has generated a shift from a simple carbon reduction approach to a more global approach, encompassing all business aspects and departments.
• Automation: Utilising AI and robotics for routine tasks to improve efficiency through operational systems, stock and inventory management, health & safety and compliance.
• Data Analytics: Leveraging big data to understand customer behaviour and optimise operations.

Future Needs

• Integrated Systems: Seamless integration of various IT systems for a unified view of operations.
• Advanced Analytics: Greater use of AI and machine learning for predictive analytics.
• Customer-Centric Approaches: More focus on enhancing the overall guest experience through personalised services.
• Sustainability and ESG: Valued by guests, and broadly adopted, all hospitality vendors, developers, owners and operators must move in that direction.

Applying Process Mining to the Hotel Industry

1. Customer Service

Benefits:

• Enhanced Guest Experience: Process mining can identify and eliminate bottlenecks in guest check-in/check-out processes, leading to reduced wait times and improved satisfaction (Dang, 2023). It also helps identify bottlenecks in the customer journey from booking to stay.
• Efficient Complaint Resolution: Analysing customer complaint handling processes ensures faster resolutions and higher guest satisfaction (Dang, 2023) (Mariani, 2022).

Examples:

• Check-in/Check-out Optimisation: Identifying delays during peak times and streamlining the process through better staff allocation or self-service kiosks. Busy days / peak hours and group arrivals are always a challenge for reception operations, process mining helps you understand where the gaps are, and create optimisations models to improve workflow and reduce wait time.
• Complaint Management: Tracking the time taken from logging a complaint to resolution, enabling the identification of steps for automation and improvement. Combined with AI tools, the industry will now be able to drastically improve complaint management and provide personalised problem-solving approaches and outcomes that answer each guest’s preferences.

2. Order to Purchase

Benefits:

• Streamlined Reservations: Optimising the booking process to reduce errors and enhance the guest experience. An X-ray of your reservation process through all sales channels (Dang, 2023) (Hlee, Lee, & Koo, 2018).
• Efficient Service Orders: Ensuring timely delivery of in-room dining and other complementary services and amenities. Learn patterns and identify bottlenecks for up sales (Mariani, 2022).

Examples:

• Reservation Process Analysis: Identifying redundant steps in the booking process and automating confirmations to reduce manual errors? (SpringerOpen)? (MDPI). Identify reservation and lead time for each different sales channels. Take steps and actions to improve multi-channel bookings management. This could also be applied to guests’ reservations for hotel restaurants. Increase table booking for in-house guests and ensure enough tables are open for external bookings to increase revenue.
• Service Order Tracking: Ensuring timely service delivery by tracking in-room dining or spa service orders from request to delivery (Emerald).

3. Procure to Pay

Benefits:

• Efficient Procurement: Streamlining the supply chain and ensuring timely payments to suppliers. Leverage the power of process mining to optimise procurements and cash-flow (Hlee, Lee, & Koo, 2018).
• Automated Reordering: Ensuring consistent supply of essential items without overstocking. Eliminate risks taken with automated reordering (Dang, 2023).

Examples:

• Supplier Management: Mapping the entire procurement process to identify delays in approvals or payments, ensuring timely procurement of supplies (MDPI), including all updates and changes. Preparing a better automated budget helps support your purchase department, with automated changes and updates on POs and Invoices.
• Inventory Automation: Using process mining to automate reordering based on usage patterns, reducing administrative overhead and ensuring timely restocking (SpringerOpen). Most used tools include risks linked to system errors. Identify automation opportunities and RPA deployment to eliminate unforeseen events.

4. Inventory Management

Benefits:

• Reduced Waste: Maintaining optimal stock levels to minimise waste (Dang, 2023).
• Real-time Tracking: Ensuring the availability of necessary items (Mariani, 2022).

Examples:

• Stock Level Monitoring: Real-time tracking of inventory levels and predicting future needs based on historical data.
• Food and Beverage Management: Optimising order quantities by analysing the flow of supplies from delivery to consumption (Emerald). Reduce stock shortages without worrying about overstock.

5. Revenue/Yield Management

Benefits:

• Optimised Pricing: Adjusting room rates based on demand to maximise revenue. Great tools are available on the market, however constant monitoring is needed to ensure information fed in the system is accurate and timely to ensure price accuracy. Process mining allows to centralise and analyse all data needed in one place, which ensures AI technologies perform as needed.
• Effective Promotions: Evaluating the impact of promotional campaigns on bookings. Optimise marketing campaigns and budgets benefiting from real time measurements. Monitor, change and optimise, create and try scenarios, but most importantly, know exactly the ROI of each element of your campaigns.

Examples:

• Dynamic Pricing: Using process mining to adjust room rates in real-time based on demand and competitor pricing (SpringerOpen) (Emerald).
• Promotional Strategy Evaluation: Analysing booking data before, during, and after promotions to understand their effectiveness and inform future marketing strategies(SpringerOpen).

6. Sustainability Practices

Benefits:

• Environmental Impact: Process mining helps identify and optimise processes that reduce waste and energy consumption.
• Sustainable Operations: Implementing eco-friendly practices by analysing and improving operational workflows.

Examples:

• Energy Management: Process mining can track energy usage patterns in hotels, identifying areas where energy consumption can be reduced. For instance, optimising the use of heating, ventilation, and air conditioning (HVAC) systems based on occupancy rates and weather conditions (Mariani, 2022). Broaden the room energy management to hotel management where energy across all areas of the property can be managed.
• Waste Reduction: Analysing waste management processes to identify inefficiencies and implement better recycling and waste reduction practices. This can involve tracking the lifecycle of consumables and ensuring proper disposal or recycling of materials (MDPI). Data can also be used for innovation, identifying and locating opportunities for improvement.

Conclusion
By providing businesses with a real-time x-ray of their operations and processes, process mining is used more and more across various industries: Gas, Petrol, Banking, Manufacturing, Automobile, etc. However, Tourism and Hospitality Industry companies are still to understand how process mining can broadly benefit them and answer the most common challenges the industry is facing and will face in the future. Hotels and Accommodation providers deal with very complex operations due to the number of departments, from reservation to housekeeping, maintenance and F&B. Moreover, these operations are not only impacted by the constant demand variations, but the industry is also overwhelmed by technologies and systems available to them.

As the industry continues to evolve, the integration of process mining will be crucial in maintaining a competitive edge and meeting future demands, providing accurate data management and integrations to ensure good use of AI technologies, and taking data-driven decisions for change, improvements, and the choice in systems and technologies.

References
Dang, T. N. (2023). Systematic review and research agenda for the tourism and hospitality sector: co-creation of customer value in the digital age. Futur Bus J 9, 94.
Hlee, S., Lee, H., & Koo, C. (2018). Hospitality and Tourism Online Review Research: A Systematic Analysis and Heuristic-Systematic Model. Sustainability, 10, 1141.
Mariani, M. a. (2022). Big data and analytics in hospitality and tourism: a systematic literature review. International Journal of Contemporary Hospitality Management, Vol. 34 No. 1, pp. 231-278.