How many executives in the hotel industry really know the odds involved in the outcomes of their important decisions? The hotel industry is filled with dedicated, educated, and intelligent individuals who despite their hard work and experience, have no real idea of the probabilities of success or failure associated with alternative courses of action available to them when faced with complex decisions.

A competitive advantage will always be acquired by those who use quantitative analysis in assessing probabilities, understanding the results, and incorporating this into their decision making. The market leaders regularly use statistical analysis, quantitative modeling, and optimization to outperform their competitors.

The better-than-average decision makers understand the dangers of misjudging the limits of what they know. They abandon the false comfort of single-point predictions in favor of confidence-range estimates. They use feedback and accountability to develop a sharper sense of how much they do – and do not – know. In short, they are better calibrated and avoid the “overconfidence” trap.

The only way to consistently make better decisions is to understand the odds; the probabilities associated with the various possible outcomes. The lessons learned by successful lodging companies with long-term success points to both their skills and their knowledge of the odds. Check out our note titled, “Quantify Risk to Eliminate Costly Surprises.”