Journal of Geographical Studies of Mountainous Areas

Journal of Geographical Studies of Mountainous Areas

Analysis of the relationship between business intelligence components and customer lifetime value in the hotel industry (Case study: Hamedan city hotels)

Document Type : Original Article

Authors
1 MSc, Department of Industrial Engineering, Faculty of Engineering, Bu-Ali Sina University, Hamedan, Iran
2 Assistant Professor, Department of Industrial Engineering, Faculty of Engineering, Bu-Ali Sina University, Hamedan, Iran
Abstract
Introduction

With the increasing number of travelers, providing appropriate facilities has become essential. Modern hotels must ensure guest comfort and satisfaction through effective management, skilled personnel, and optimized workflows. Poor management can lead to customer dissatisfaction. In the tourism industry, human interactions play a crucial role in shaping visitor perceptions, and staff competence directly influences guest loyalty and hotel profitability. Effective communication and interpersonal skills contribute to positive customer experiences and enhance service marketing outcomes.
The rapid advancement of technology in service industries necessitates data-driven decision-making for competitive advantage. Business Intelligence (BI) helps organizations optimize operations, improve data accuracy, and support strategic decision-making. By leveraging BI, hotels can enhance efficiency, reduce costs, and increase customer satisfaction, ultimately improving profitability. BI integrates data analytics and predictive models, enabling businesses to assess market trends, customer behavior, and competitive positioning. It facilitates smart decision-making, fostering operational improvements and personalized customer engagement.
Customer Lifetime Value (CLV) has gained significant attention as a key marketing approach, allowing businesses to estimate the financial worth of customers and optimize customer relationship strategies. CLV is assessed based on spending amount, relationship duration, and purchase frequency. Understanding CLV helps businesses make informed marketing investments, prioritize high-value customers, and enhance long-term profitability. Relationship marketing and personalized services strengthen customer loyalty and satisfaction, reinforcing trust and engagement.
In the hotel industry, decision-making challenges arise from limited data access. Some managers rely on IT-generated reports, others on personal experience, while some embrace technology-driven insights. Implementing BI in hospitality enables better risk assessment and strategic decision-making. This study explores the relationship between BI and CLV in the hospitality sector of Hamedan, aiming to provide practical recommendations for improving hotel performance. It also highlights the role of BI in staff development and operational efficiency. The research seeks to answer how BI contributes to the transformation of the hotel industry.
 

Results

The findings reveal a strong positive correlation between Business Intelligence (BI) and Customer Lifetime Value (CLV) (r = 0.755, p < 0.001), indicating that hotels that effectively utilize BI tend to achieve higher CLV. Among the BI dimensions, "competitive advantage creation" emerged as the most influential factor in enhancing CLV.
Key results include:
All four BI components (effective decision-making, competitive advantage creation, efficiency enhancement, and time optimization) positively correlate with CLV and its subcomponents. Multiple regression analysis identified that "competitive advantage creation" was the most significant predictor of CLV, explaining a considerable portion of the variance in customer retention and profitability. Friedman ranking test revealed that within the CLV framework, the "network effect" dimension was ranked as the most critical factor in determining customer loyalty, followed by learning, base value, and growth. The study confirms that hotels integrating BI effectively into their operations are better positioned to optimize service quality, reduce customer churn, and improve long-term profitability.
 

Discussion

Customer Lifetime Value (CLV) is a crucial metric in marketing and business strategy, enabling organizations to assess the long-term profitability of their customers and make informed decisions regarding resource allocation. However, traditional CLV calculation models often fail to capture the complexity of customer behavior—particularly in service-oriented industries such as hospitality. This study seeks to bridge this gap by integrating Business Intelligence (BI) into CLV analysis, demonstrating how BI tools and processes can enhance customer retention and overall business performance.
The findings confirmed a significant positive relationship between BI and CLV, indicating that hotels effectively leveraging BI tend to achieve higher customer lifetime value. Among the various BI dimensions, "competitive advantage creation" had the strongest impact on CLV, underscoring the importance of strategic differentiation in retaining high-value customers. Hotels that utilize BI to offer personalized services, anticipate customer needs, and optimize operational efficiency are more likely to enhance customer loyalty and long-term profitability.
Furthermore, multiple regression analysis revealed that although all BI components positively contribute to CLV, "competitive advantage creation" stood out as the most influential predictor. This suggests that hotels should prioritize innovation, data-driven decision-making, and differentiation strategies to maximize customer value. Within the CLV framework, the network effect also emerged as a critical factor, reinforcing the significance of customer relationships and word-of-mouth referrals in sustaining long-term customer value.
 

Conclusion

Customer Lifetime Value (CLV) is one of the fundamental concepts in management and marketing literature, as organizations continuously strive to evaluate their profitability based on CLV calculations and make strategic decisions to enhance future profits. In typical CLV calculation models, various indicators—such as customer churn, customer migration, customer acquisition, and advertising costs—play a decisive role. The inclusion of these indicators depends on the specific formula being applied. However, some studies have indicated that existing CLV formulas in the hotel industry often fail to accurately reflect the true value of customer relationships. This highlights the need for incorporating more effective indicators into CLV models. Accordingly, this research introduces Business Intelligence (BI) as a means of identifying new and relevant indicators for CLV analysis, given the increasing importance of BI in the hotel industry. Establishing a clear connection between BI and CLV opens new avenues for more precise calculation of customer retention rates in hospitality settings.
The findings of the study revealed a significant relationship between BI variables and CLV, confirming that BI indicators can serve as reliable predictors of customer lifetime value. Moreover, the results underscore that creating competitive advantages has the most substantial impact on increasing CLV.
Therefore, it is recommended that hotels leverage business intelligence tools, conduct accurate analysis of customer data, and develop effective competitive strategies in order to enhance customer lifetime value and foster greater customer loyalty.
 
Acknowledgments
We are grateful to all the persons for scientific consulting in this paper.
Keywords

Abdolvand, N., Albadvi, A., & Koosha, H. (2014). Customer Lifetime Value: Literature Scoping Map, and an Agenda for Future Research. International Journal of Management Perspective, 1(3), 41-59. http://noo.rs/H4ohB
Ajah, I. A., & Nweke, H. F. (2019). Big data and business analytics: Trends, platforms, success factors and applications. Big Data Cogn. Comput. 2019, 3, 32. https://doi.org/10.3390/bdcc3020032.
Al-Madadha, A., Al Khasawneh, M. H., Al Haddid, O., & Al-Adwan, A. S. (2022). Adoption of Telecommuting in the Banking Industry: A Technology Acceptance Model Approach. Interdiscip. J. Inf. Knowl. Manag. 2022, 17, 443–470. http://dx.doi.org/10.28945/5023.
Al-Okaily, A., Al-Okaily, M., Teoh, A. P., & Al-Debei, M. (2023). An Empirical Study on Data Warehouse Systems Effectiveness: The Case of Jordanian Banks in the Business Intelligence Era. EuroMed Journal of Business, Vol. 18 No. 4, pp. 489-510. Https://doi.org/10.1108/EMJB-01-2022-0011.
Aung, T. H., Mon, T. R., & Bhaumik, A. (2024). The Impact of Business Intelligence on Customer Relationship Management in the Banking Sector: A Financial Analysis. Advancement in Management and Technology (AMT), 4(4), 1-11.‏ https://doi.org/10.46977/apjmt.2024.v04i04.001
Awaad, S. A., Kortam, W., & Ayad, N. (2024). Examining the impact of price sensitivity on customer lifetime value: empirical analysis. Cogent Business & Management, 11(1), 2366441.‏ https://doi.org/10.1080/23311975.2024.2366441
Bahrami, M., Arabzad, S. M., & Ghorbani, M. (2012). Innovation in market management by utilizing business intelligence: introducing proposed framework. Procedia-Social and Behavioral Sciences, p. p. 160-167. Https://doi.org/10.1016/j.sbspro.2012.04.020.
Bharadiya, J. P. (2023). A Comparative Study of Business Intelligence and Artificial Intelligence with Big Data Analytics. American Journal of Artificial Intelligence 2023; 7(1): 24-30. http://dx.doi.org/10.11648/j.ajai.20230701.14.
Givehchi, S, Vejdani Nozar, A, (2022), Evaluation of urban social resilience in facing the consequences of environmental hazards (Case study: Hamedan City). Journal of Geographical Studies of Mountainous Areas, 3(11), 1 -19. (In Persian). https://doi.org/10.52547/jsma.3.3.1.
Haftkhani, N. J., & Derakhsh, S. (2022). Identify and prioritize communication skills of hotel staff in interaction with foreign tourists Using Structural Modeling (ISM). Journal of Cultural Management, Issue 54, Vol. 15, Page: 63 – 79. (In Persian). https://doi.org/10.30495/jcm.2022.19680
Handzic, M., Ozlen, K., & Durmic, N. (2014). Improving customer relationship management through business intelligence. Journal of Information & Knowledge Management, 13(02), 1450015. ‏
Jamini, D., Javan, F. and Atashbahar, R. (2025). Application of artificial intelligence in locating eco-camps. Tourism Management Studies, (), -. doi: 10.22054/tms.2025.85190.3055(In Persian).  
Javan, F., & Barzegar, S. (2025). Explaining key drivers affecting the feasibility of community-based tourism in the development of peri-urban villages of Rasht metropolis. Journal of Peri-Urban Spatial Development, 6(4), 37–54. (In Persian)
Javan, F., Hasanvand, A. and Arefnezhad, M. (2024). Identification of the Most Influential and Influenced Factors in Rural Tourism Development towards Sustainable Economy. Economic Geography Research, 5(15), 84-98. doi: 10.30470/jegr.2024.2022661.1143(In Persian)
Kiani Mavi, R., & Standing, C. (2018). Cause and effect analysis of business intelligence (BI) benefits with fuzzy DEMATEL. Knowledge Management Research & Practice. Volume 16, 2018 - Issue 2, Pages 245-257. https://doi.org/10.1080/14778238.2018.1451234.
Kim, Y. P., Boo, S., & Qu, H. (2018). Calculating tourists’ customer equity and maximizing the hotel’s ROI. Tourism Management, 69, 408–421. https://doi.org/10.1016/j.tourman.2018.05.001
Kubacka, M. (2020). Review and analysis of selected customer value measurement methods. Studia i Materiały, (1 (32)), 34-46.‏ http://dx.doi.org/10.7172/1733-9758.2020.32.3
Larice, D. (2024). The impact of Business Intelligence (BI) tools on the effectiveness of marketing decision-making processes in organizations. Mahjubifard, A., Afsar, A., Bashiri Mousavi, S. (2021). Customer value analysis in bank with data mining technique and fuzzy analytic hierarchy process. Management Research in Iran, 19(1), 23-43. (In Persian).  https://dorl.net/dor/20.1001.1.2322200.1394.19.1.2.0
Manosuthi, N., Lee, J. S., & Han, H. (2021). Causal-predictive model of customer lifetime/influence value: mediating roles of memorable experiences and customer engagement in hotels and airlines. Journal of Travel & Tourism Marketing, 38(5), 461–477. https://doi.org/10.1080/10548408.2021.1940422
MOhamadi, E., Rezaee, Z. and Ahmadi, M. (2015). The relationship between customer relationship management, relationship quality, and customer lifetime value in the hospitality industry. Tourism Management Studies, 10(30), 107-127. (In Persian).  https://dor.isc.ac/dor/20.1001.1.23223294.1394.10.30.5.4
Mudjahidin, M., Maulana, Y. M., Aristio, A. P., Wiratno, S. E., & Junaedi, L. (2024). Structural Model of Relationship Analysis between CRM, RQ, and CLV at Hotel in Palembang. Procedia Computer Science, 234, 821-828. ‏ 
Norouzi, H., Khoddami, S., Abidi, Z. (2023). The Effect of Business Intelligence on Firm Performance Considering the Mediating Role of Knowledge Sharing, Organizational Innovation and Competitive Advantage. Innovation Management and Operational Strategies, 2023; 3(4): 371-386. (In Persian). https://doi.org/10.22105/imos.2022.341854.1231.
Osakwe, J., Mutelo, S., & Obijiofor, N. (2023). Integrating Customer Relationship Management and Business Intelligence to Enhance Customer Satisfaction and Organisational Performance. A Literature Review. A Literature Review (December 14, 2023).‏
Rahadian, H. F., & Urumsah, D. (2017). Factors Influencing Business Intelligence Data Collection Strategies. The Indonesian Journal of Accounting Research, 20(2).‏
Richards, G., Yeoh, W., Loong Chong, A. Y., & Popovič, A. (2019). Business Intelligence Effectiveness and Corporate Performance Management: An Empirical Analysis. Journal of Computer Information Systems, Volume 59, 2019 - Issue 2. https://doi.org/10.1080/08874417.2017.1334244.
Rouhani, S., Rabiee Savoji, S. (2016). An Assessment Model for the Success of Business Intelligence Tools. Business Intelligence Management Studies, 4(15): 29-64. (In Persian).   https://doi.org/10.22054/ims.2016.6858
Salari, L. N., Khadivar, A., & Abdolvand, N. (2016). A model for analyzing the barriers of using Business Intelligence (BI) in the tourism industry of Iran, a mixed method approach. Modern Research in Decision Making. Volume 1, Issue 1 - Serial Number 1, Pages 79-102. (In Persian) http://dx.doi.org/10.2139/ssrn.3926550.
Segarra-Moliner, J. R., & Moliner-Tena, M. Á. (2024). Engaging in customer citizenship behaviours to predict customer lifetime value. Journal of Marketing Analytics, 12(2), 307-320.‏ https://doi.org/10.1057/s41270-022-00195-2.
Sparks, B., & Mccann, J. (2015). Factors influencing business intelligence system use in decision making and organisational performance. International Journal of Sustainable Strategic Management, Vol. 5, No. 1, 31. http://dx.doi.org/10.1504/IJSSM.2015.074604.
Stahl, H. K., Matzler, K., & Hinterhuber, H. H. (2003). Linking customer lifetime value with shareholder value. Industrial marketing management, 32(4), 267-279.‏ https://doi.org/10.1016/S0019-8501(02)00188-8
Tong-On, P., Siripipatthanakul, S., & Phayaphrom, B. (2021). The implementation of business intelligence using data analytics and its effects towards on performance in the hotel industry in Thailand. International Journal of Behavioral Analytics, 1(2).
Valentini, T., Roederer, C., & Castéran, H. (2024). From redesign to revenue: measuring the effects of servicescape remodeling on customer lifetime value. Journal of Retailing and Consumer Services, 77, 103681.‏ https://doi.org/10.1016/j.jretconser.2023.103681