Creating a Small Hotel Operating Plan that Fits Your Objectives and Budget

By Jed Heller President, The Providence Group | October 28, 2008

Strong communications between an owner and general manager are vital to the success of any property. The general manager needs to share the owner's vision while clearly understanding business strategy, objectives, accountability and metrics for success. In many cases, the owner and general manager will have already developed a broad based business plan that documents the goals and objectives of the property. Once these goals and guidelines have been established, it is incumbent upon the general manager to create a detailed operating plan to fulfill the vision.

The operating plan acts as a highly detailed roadmap that outlines very specifically the course of action that will be taken to achieve stated objectives over an agreed upon period of time. In general terms, an effective operating plan explains in detail what needs to be done, when, how, and by whom - essentially, it defines how the hotel will be managed on a day-to-day basis and sets a standard for hotel employees. The operating plan also serves as an outline of the capital and expense requirements for daily operations.

For small hotels, a sound operating plan will help managers address inefficiencies, operate more productively, and be better prepared for unforeseen market situations, all of which directly impact the bottom line.

Creating the Plan

In developing the plan, managers should include measurable details, but not to the level that it may restrict creativity. It should be written in a manner that enables measurement of progress toward specific operational goals and objectives, and should be consistent with the overall strategic goals of the hotel.

A well thought out operating plan is flexible and must be readily adaptable to new situations. The operating plan should also include contingencies for best case, expected case, and worst case scenarios. Potential risks should be identified and the plan should describe how those potential risks can be mitigated. For instance, how will the hotel maintain a high level of customer service if one of its key employees leaves? What external resources are readily available that can quickly address severe maintenance problems, like heating or plumbing, that will allow you keep your guests satisfied? A well-executed operating plan helps managers maximize profit in high and low seasons, anticipate swings in business and plan for staff and resources accordingly, so that the customer experience remains consistent.

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Coming up in March 2019...

Human Resources: An Era of Transition

Traditionally, the human resource department administers five key areas within a hotel operation - compliance, compensation and benefits, organizational dynamics, selection and retention, and training and development. However, HR professionals are also presently involved in culture-building activities, as well as implementing new employee on-boarding practices and engagement initiatives. As a result, HR professionals have been elevated to senior leadership status, creating value and profit within their organization. Still, they continue to face some intractable issues, including a shrinking talent pool and the need to recruit top-notch employees who are empowered to provide outstanding customer service. In order to attract top-tier talent, one option is to take advantage of recruitment opportunities offered through colleges and universities, especially if they have a hospitality major. This pool of prospective employees is likely to be better educated and more enthusiastic than walk-in hires. Also, once hired, there could be additional training and development opportunities that stem from an association with a college or university. Continuing education courses, business conferences, seminars and online instruction - all can be a valuable source of employee development opportunities. In addition to meeting recruitment demands in the present, HR professionals must also be forward-thinking, anticipating the skills that will be needed in the future to meet guest expectations. One such skill that is becoming increasingly valued is “resilience”, the ability to “go with the flow” and not become overwhelmed by the disruptive influences  of change and reinvention. In an era of transition—new technologies, expanding markets, consolidation of brands and businesses, and modifications in people's values and lifestyles - the capacity to remain flexible, nimble and resilient is a valuable skill to possess. The March Hotel Business Review will examine some of the strategies that HR professionals are employing to ensure that their hotel operations continue to thrive.