October University for Modern Sciences & Arts

Faculty of Management Sciences

Management decision support system
MIS461

Case study: Starwood Hotels & Resorts Manages Hotel Profitability with Data Warehousing
Submitted to: Dr. Amr Elmaghraby
Submitted by:
Name ID
Aya Gamal 212175
 1. Introduction and Context:
Starwood Hotels & Resorts Worldwide, Inc., a global leader in the hotel and leisure industry,
operates over 1,100 properties in nearly 100 countries. With a commitment to knowing and
serving its guests, Starwood operates 1,112 properties and employs 154,000 individuals, making
it a major player in the hospitality industry. Starwood Hotels have a diverse portfolio of
internationally renowned brands, including St. Regis, Westin, Sheraton, and W Hotels, the
company's operations span a wide range of services and locations. However, as Starwood
expanded its global reach, it faced challenges in managing and accessing critical data needed for
efficient hotel operations and customer service. This inefficiency led to delays in decision-
making, which, in the competitive hotel industry, could have a direct impact on revenue and
customer service. The organization needed a solution to streamline data access and reporting
processes to address these challenges. One of the primary challenges was the exponential
increase in data due to the expansion of its operations. This data included information on hotel
revenue, central reservations, rate plans, guest information, sales data, and more. The
organization was reliant on a single enterprise data warehouse to retrieve essential information
needed for efficient hotel management, as well as for its loyalty program, Starwood Preferred
Guest (SPG), which depended on various types of data for decision-making. The existing data
infrastructure struggled to keep up with the data growth and demands. The central reservation
system (CRS) reports, which were crucial for hotel management, took too long to generate, with
some reports taking up to 18 hours. This delay was particularly problematic for hotel managers
who needed to make timely decisions about room rates, occupancy, and other aspects of hotel
operations. As the hotel chain experienced significant expansion, especially in the Asia/Pacific
region, the need for critical business information regarding its hotels and customers grew
substantially. To efficiently manage hotels, make informed decisions about room rates, and
improve overall profitability, Starwood Hotels relied on enterprise data warehousing and
decision support systems ( Sharda et al., 2014).
2. Problem Statements:
The problem faced by Starwood Hotels & Resorts was primarily related to data management
and access inefficiencies as a result of their rapid global expansion. The existing system failed
to deliver crucial information to hotel managers and administrators in a timely manner. Reports
generated by the central reservation system (CRS) could take up to 18 hours to process, leading
to delays in making rate adjustments and potential loss of revenue ( Sharda et al., 2014).
2.1 Data Growth and Demands:
Starwood experienced significant growth in the number of hotels it operated, particularly in the
Asia/Pacific region. This expansion led to a substantial increase in the volume of data generated
by the organization, including data related to hotel operations, customer information, sales, and
loyalty programs. The existing data infrastructure was unable to efficiently handle this data
growth.
 2.2 Inefficient Data Retrieval:
The central reservation system (CRS) reports, which contained critical information for hotel
management, took an extended amount of time to generate. Reports that could take as long as
18 hours to produce were too slow for the organization's needs. For example, the transient pace
report, which presented segmented information on reservations, was delivered to hotel managers
5 hours later than required. The existing data infrastructure could not keep pace with the data
growth, and reports from the central reservation system (CRS) took as long as 18 hours to
generate. Delays in receiving vital information hampered hotel managers' ability to adjust rates
promptly, potentially resulting in lost revenue. ( Sharda et al., 2014).
2.3 Delayed Decision-Making:
The delays in data retrieval and report generation prevented hotel managers from making timely
adjustments to room rates. This delay had the potential to result in lost revenue because hotel
managers couldn't respond quickly to changing market conditions

3. Objectives:
1. Reducing the time for extract, transform, and load (ETL) operations from 18-24 hours to
4-6 hours.
2. Enabling real-time data feeds and immediate data access, reducing the time to minutes
instead of 24 hours.
3. Ensuring that hotel managers worldwide have up-to-date data to enhance efficiency,
profitability, and customer service.
4. Providing efficient reporting tools for various functions, including customer relationship
management (CRM) and sales.
5. Analyzing marketing campaign results in days or weeks, as opposed to months.
4. The Benefits:

4.1 Increased Efficiency:

Hotel managers have up-to-date data for their hotels, enabling them to make more
informed operational decisions and manage room occupancy rates effectively.
4.2 Improved Customer Service:
With faster access to data, Starwood can ensure rooms are available for premier
customers, enhancing the overall guest experience.
4.3 Cost Savings:
 Timely data access helps in optimizing pricing and maximizing revenue, ultimately
contributing to cost savings and profitability.
4.4 Streamlined Marketing:
Marketing campaign management becomes more efficient, allowing for quicker analysis
of campaign results and adjustments as needed.

5. Methodology:
The methodology for implementing the Decision Support System (DSS) at Starwood Hotels &
Resorts involved a systematic approach, beginning with an assessment of their existing systems,
followed by vendor selection, solution design, development, and integration of Oracle Exadata
Database Machines and Oracle Linux. Data migration and transformation were carried out to
minimize downtime during the transition. User training, testing, and user support were integral
parts of the process. The DSS was deployed across properties in phases, and a robust
monitoring and maintenance plan was established. The methodology also included collecting
user feedback, focusing on scalability for future growth, and ensuring long-term effectiveness.
This well-structured approach was essential for optimizing data management, decision-making,
and customer service at Starwood (Mullins, 2016).

- Technologies Used:

1. Oracle Exadata Database Machine X2-2 HC Full Rack:

This is a powerful database appliance designed for high-performance data warehousing.
It is optimized for handling large volumes of data and complex queries efficiently.
2. Oracle Exadata Database Machine X2-2 HP Full Rack:
This complements the HC Full Rack, providing additional computing and storage
capacity. Together, these machines form a robust infrastructure for data warehousing.
3. Oracle Linux:
The operating system used to run these machines ensures a stable and reliable
environment for data processing (Mullins, 2016).
 6. Data Sources and Integration:

Data sources and integration for Starwood's Decision Support System (DSS) involved a
comprehensive strategy. Initially, an analysis of their data sources was performed, identifying
various types of data critical for hotel operations, such as revenue, reservations, guest
information, sales data, and loyalty program data. To streamline data integration, Oracle Exadata
Database Machines and Oracle Linux were implemented. These technologies enabled real-time
data feeds and global data accessibility, ensuring that data could be accessed efficiently across all
properties. Data migration and transformation processes were executed to minimize disruption
during the transition. Additionally, a robust monitoring and maintenance plan was established to
maintain data integrity and accessibility. The methodology focused on scalability, ensuring the
DSS could accommodate future data growth while providing up-to-date information to support
informed decision-making and improved customer service. the DSS integrated various data
sources, including revenue, central reservations, rate plans, guest information, sales data, and
more(Oracle, n.d.).

7. Modeling and Analysis Techniques:

The DSS employed Oracle Exadata's capabilities for efficient data processing, enabling real-time
analysis. It relied on algorithms, statistical analyses, and optimization techniques to process and
interpret the vast data sets efficiently. These methods enabled the system to generate operational
reports, CRM analyses, sales and marketing campaign assessments, and more. The utilization of
Oracle Exadata Database Machines optimized the DSS's performance for handling complex
queries and large data volumes. As a result, the DSS provided timely and meaningful data-driven
insights that improved decision-making, enhanced customer service, streamlined marketing
efforts, and contributed to cost savings, all of which ultimately boosted profitability and
operational efficiency (Oracle, n.d.).
8. User Interface and Interaction:
to provide an efficient experience for various users, including hotel managers, corporate
executives, sales and marketing teams, IT professionals, customers, financial analysts, and
business relationship managers. The DSS offered user-friendly interfaces that allowed users to
easily access and interact with the data. It enabled input and feedback from users, which played a
vital role in the decision-making process. Through these interfaces, users could quickly retrieve
up-to-date data, analyze information, and adjust strategies. This responsive and user-centric
approach significantly enhanced the effectiveness of the DSS in supporting informed decisions,
improving customer service, and optimizing business operations ( Sharda et al., 2014).
- The beneficial users :

1. Hotel Managers:
Hotel managers were among the primary beneficiaries. They gained access to up-to-date
data, enabling them to make informed decisions regarding room rates, availability, and
occupancy. This, in turn, allowed them to optimize revenue and enhance customer
service by ensuring rooms are available for preferred guests.
2. Corporate Executives:
Executives at the corporate level benefited from the improved data access by obtaining
near-real-time information. This allowed them to make optimal business decisions and
provide ideal amenities for guests.
3. Sales and Marketing Teams:
The implementation of data warehousing facilitated more efficient reporting tools for
CRM and marketing campaign management. Sales and marketing teams could analyze
results in a shorter time frame, enabling them to make data-driven decisions and
adjustments to their strategies.
4. IT Professionals:
IT professionals within the organization were responsible for implementing and
maintaining the data warehousing solution. They benefitted from the streamlined data
processing and the ability to provide the business with the necessary technology
infrastructure to support data-driven decision-making.
5. Customers:
 While not direct users of the data warehousing system, customers of Starwood Hotels &
Resorts indirectly benefited from the improved customer service. Timely access to data
allowed the company to better meet customer needs and preferences.
6. Financial Analysts:
Financial analysts within the organization would have had access to more accurate and
up-to-date financial data, making their forecasting and budgeting processes more
effective.
7. Business Relationship Managers:
Individuals responsible for maintaining relationships with customers and partners, such
as Gordon Light mentioned in the case, could use the data to enhance customer
experiences and partnerships.

9. Decision-Making Process:
The DSS using Oracle Exadata enabled timely rate adjustments, efficient room management, and
the analysis of marketing campaign results. It facilitated informed decisions across various hotel
functions. The DSS facilitated same-day or next-day analyses, allowing for quick adaptations to
changing market conditions. This, in turn, improved decision-making across various aspects of
the business, contributing to higher efficiency, customer satisfaction, and profitability.
10. Performance Metrics and Evaluation:
The success of the DSS implementation was measured based on improvements in ETL time, data
access speed, and the ability to provide real-time data to hotel managers. User satisfaction was
considered, along with the accuracy of financial data. The system's influence on business
decision-making speed and quality was assessed. These evaluations determined the DSS's
effectiveness in meeting its objectives, enhancing efficiency, improving customer service, saving
costs, and empowering better decision-making for increased profitability and
competitiveness(Oracle, n.d.).
11. User Feedback and Acceptance:
User feedback such as hotel manager and corporate executive indicated enhanced efficiency and
data access, leading to higher user satisfaction and faster decision-making processes. Their
feedback helped identify areas for improvement and provided valuable input for system
enhancements. Furthermore, user acceptance was essential for the DSS's continued success, and
it played a significant role in refining the system to meet users' needs effectively (Sharda et al.,
2014).
 12. Implementation Challenges and Lessons Learned:
The implementation of the data warehousing using the Oracle Exadata solution faced several
challenges. These included adapting to the rapid data growth resulting from global expansion,
overcoming delays in data retrieval, and ensuring smooth integration of the new technology.
Lessons learned from the implementation emphasized the importance of staying ahead of data
growth, optimizing data access and reporting speed, and effectively managing technology
integration. Addressing these challenges and learning from them was essential for the successful
deployment of the DSS. The implementation of addressed these challenges, resulting in
significant improvements in data processing and access ( Sharda et al., 2014).
13. Results and Impact:

The implementation of the Oracle Exadata Database Machines and Oracle Linux brought about
significant improvements for Starwood Hotels & Resorts. The adoption of Oracle's data
warehousing technology had a transformative impact on Starwood Hotels & Resorts, enabling
them to overcome their data management challenges and significantly improve operational
efficiency, customer service, and profitability. The organization could now make more data-
driven decisions and respond rapidly to market changes, ultimately enhancing its competitive
position in the industry (Mullins, 2016).

13.1 ETL Operations Improvement:

The time required for Extract, Transform, and Load (ETL) operations for operational reports
was reduced from 18 to 24 hours to just 4 to 6 hours. This marked a six-fold
improvement in data processing speed.

13.2 Real-Time Data Feeds:

Real-time data feeds became possible, allowing transactions to be posted immediately to the
data warehouse. Users could access data changes within 5 to 10 minutes, compared to the
previous 24-hour delay.

13.3 Global Data Accessibility:

The accelerated data access ensured that all Starwood properties could access up-to-date data
for their reports globally, regardless of their location. This facilitated same-day or next-
day analyses, improving efficiency and profitability.

13.4 Enhanced Reporting:

Beyond operational reports, reporting tools used for CRM, sales and catering, and marketing
campaign management became more efficient. This enabled managers to analyze results
in days or weeks instead of months.
 14. Conclusion and Recommendations:
The implementation of the DSS using Oracle Exadata was highly successful for Starwood Hotels
& Resorts. It provided near-real-time information, enabling optimal business decisions and
improved guest services. To further enhance the system, it is recommended to continuously
monitor its performance and consider updates or expansions to meet evolving business needs.

15. References

1. Sharda, R., Delen, D., & Turban, E. (2014). Business intelligence and analytics:
Systems for decision support. Pearson.

2. Mullins, C. S. (2016, February 17). What to expect from Oracle Exadata

Database Machine: TechTarget. Data Management.
3. Starwood centralized data to create real-time competitive offerings. Oracle. (n.d.).
https://www.oracle.com/customers/starwood-hotels-1-exadata/
4. Starwood Hotels: RMAN in Oracle Database 10g best practices for maximum ...
(n.d.). https://www.oracle.com/us/solutions/starwood-rman-casestudy-130625.pdf