Hospitality Financial Leadership

Share the Financials in Your Hotel or Not

By David Lund Hospitality & Leadership Expert, The Hotel Financial Coach | June 04, 2017

In your hotel, you either share the financials with you leaders, the department managers or you donít. If you already share the financial statements, you know the power it unleashes with your team and the result it helps to create. If you donít share you're wondering what the management team will think about the money and how much goes to you and the owner. You naively think no one needs to know about the finances in your hotel. You think itís none of their business. Youíre also pretty sure the team will judge you and your results. Youíre probably thinking the money is top secret and on a need to know basis. Or maybe you just tell yourself that so you have a good excuse not to reveal the results of your efforts. If you already share your numbers you know itís not such a big deal, and itís the way to go. In this article, I will explore the relationship we have with the money and how we can get the financials out of the closet and reap the benefits.

If youíre in the camp that says we donít share, I ask you to think about what holds you back from sharing. Is there really a policy in your company that states the sharing of financial information is prohibited? Iím pretty sure those are few and far between. The way it usually goes down is something this. Thatís just what we do, we have always done it this way or the last guy or gal didnít either. I am willing to bet that most of your reading this could make the decision to share the financials with your department managers if you had a plan as to what would be accomplished if you did share. Thatís an exciting prospect. Changing the way, you manage and introducing a new process to generate a different result.

The financial statements serve two purposes in your business. One, they are the vehicle we use to keep score. Itís that simple, a way to keep score for the game we call the hotel business. How is your business prospering or not is revealed by the numbers in your statements? A quick look by someone who knows how to read the statement will reveal your truth. I know many hoteliers donít share because they are embarrassed by the lack of prosperity they are experiencing and the very thought of sharing this with their managers is too much to take. In our culture money has immense power. If we subscribe to this notion the power, we`re giving the money in our business is negative. It holds us down and keeps us from really wrapping our arms around our business and getting the results we know are possible. ďBut what will people think of meĒ, ďsurely, they will think Iím incompetentĒ, these are some of the fears we have. I often hear itís the owner that does not want the financials distributed. I also here its policy not to share and the reason is we want the managers and department leaders to look after the guests and their colleagues. No matter what the excuse or reason I always say the same thing in response to my inquiry about sharing the results. I say, ďdo you think you could achieve a better financial result if your leaders and managers knew what was happening financially?Ē Inevitably I get a deer in the headlights response of yes, butÖÖ

The second purpose for the financial statements in your business is to help you to create plans and actions to improve the results moving forward. Really thatís the biggest and highest purpose of the financial statements for your business. Tell me how Iím doing, whatís the score and drum roll hereÖÖIt is What can I do to improve the results! Your financials point the way to possible improvements. If we donít know whatís wrong with our patient, then prescribing a cure is beyond anyoneís ability. A close review of your financial statements will reveal exactly what is wrong with your business. When we look at ways to improve our business we naturally want the maximum buy-in from our managers and leaders to help pull it off. Well, letís think for a moment and ask yourself how could I get my managers to really own the action going forward. How can I get the team as engaged as possible financially? The biggest part of the answer is to share the financial results with your leaders and involve them in the formulation of the profit improvement plans.

This really is not a new thought or a leading edge new age strategy. This idea to get your managers to buy into the ideas for improvement by involving them in creating the ideas by sharing the financials is as old as the hills. Here is the kicker. If you wonít share or believe you canít share the financials the buy-in and accountability you desire will NEVER HAPPEN. Thatís right, no matter what else you do if the managers and leaders of your hotel donít have financial statement information they will not step up. Why may you be asking is this the case? Itís simple, you cannot expect someone to create a result that is better than the current result if he or she donít know what that result is or what the new one should look like. They are in the dark without any way of navigating and they have no destination to navigate too.

Your leaders want to make a difference in what they do in the lives, at work, and at home. All of us have a basic human need to make a difference. Your managers what to have a greater impact on your business results. They also what to know the score, the scoop. They want their seat at the captainís table. They want to be on the inside track. They also want you to treat them like adults. For you to share the financial results and ask for their participation is an incredibly powerful gesture. It also needs to be presented properly with just the right amount of humility and vulnerability. Yes, vulnerability. When you share your results your opening up a part of you that they know is sensitive and personal. Money in our society has such incredible power and by showing your financial results you create equity with your leaders.

Coming up in February 2018...

Social Media: Engagement is Key

There are currently 2.3 billion active users of social media networks and savvy hotel operators have incorporated social media into their marketing mix. There are a few Goliath channels on which one must have a presence (Facebook & Twitter) but there are also several newer upstart channels (Instagram, Snapchat &WeChat, for example) that merit consideration. With its 1.86 billion users, Facebook is a dominant platform where operators can drive brand awareness, facilitate bookings, offer incentives and collect sought-after reviews. Twitter's 284 million users generate 500 million tweets per day, and operators can use its platform for lead generation, building loyalty, and guest interaction. Instagram was originally a small photo-sharing site but it has blown up into a massive photo and video channel. The site can be used to post photos of the hotel property, as well as creating Instagram Stories - personal videos that disappear from the channel after 24 hours. In this regard, Instagram and Snapchat are now in direct competition. WeChat is a Chinese company whose aim is to be the App for Everything - instant messaging, social media, shopping and payment services - all in a single platform. In addition to these channels, blogging continues to be a popular method to establish leadership, enhance reputations, and engage with customers in a direct and personal way. The key to effective use of all social media is to find out where your customers are and then, to the fullest extent possible, engage with them on a personal level. This engagement is what creates a personal connection and sustains brand loyalty. The February Hotel Business Review will explore these issues and examine how some hotels are successfully integrating social media into their operations.