Insider: Best Practices in Hotel Financial Management
By Jed C. Heller, President, The Providence Group
Mr. Jed C. Heller
Behind every successful business is a sound financial model. This simple theory holds true in any business, whether it is retail, manufacturing, or high tech. It most certainly is true in the hospitality business. In my 30 years in hospitality management, I have been involved in managing large resorts, time shares, condominiums, and most recently, small to mid-size hotels. During these management engagements I have come to recognize that the one common denominator synonymous with success is strong financial management. While it may sound simple, I’ve found that many hotel managers either lack the skills or business acumen to put the financial systems in place to help them make smart decisions.
By employing basic accounting principles, hotel owners and managers have the information they need to optimize performance in every operational area, from inventory and payroll to sales and marketing. They can reduce expenses, be prepared to accommodate guests during peak business times, and scale back operations during slow periods. Rather than relying on intuition and reacting to events, successful owners have the financial facts readily available to proactively make the right decisions at the right time.
A good financial system goes well beyond developing an annual budget. The financial system needs to provide the mechanism for managers to easily track performance against the budget, identify issues and rapidly make adjustments, and create and use reports that will give them accurate financial status at any point in time. Just as importantly, there must be managers in place who are trained and accountable for meeting financial objectives.
In my Hotel Business Review article “Best Practices in Hotel Financial Management", I outline the key components of a basic financial system and ways managers can use accurate financial information to improve hotel performance on all fronts.
Click here to read the full article
Sincerely,
Jed C. Heller
CEO
The Providence Group
781-582-8785
jcheller@providencegrp.com
