Data-Driven Business Decisions

CHAPTER 19

Analyzing Data That Is Collected Regularly Over Time

GASTHOF INTERNATIONAL: CASE BRIEFING

Gasthof International is a franchise chain of lodge style hotels with 68 locations spread across 12 European countries. Typical sales revenue is around €7 million per month. Business travelers are the main customer base though there is also a significant holiday market that is strongly seasonal with peaks in the summer holiday months as well as Christmas.

Arturo Leon has recently taken up the role of sales and development manager and has been given the impression that sales have been growing steadily and that monthly sales are increasing by roughly €32,000 each month. Gasthof has apparently defied the global financial crisis.

He has been provided with data on monthly sales for the past 6 years. A simple plot of the monthly sales reveals a very strong and consistent seasonal component in the sales, though there is also some obvious growth, which on first view looks extremely steady. Looking a little more carefully at the growth, he focuses on the August figures and sees that year-on-year growth has been around €300,000–400,000 but that more recently, August 2008 was around €600,000 higher than the previous August. This suggests that the growth may be increasing. However, looking at other months besides August gives a different message.

Arturo wished he could somehow remove the regular seasonal effect from the data. Everyone knows that business is good in July, August, September, ...