Daily Hospitality Business Execution for 2011
By Paul West Principal & CEO , priZem Hospitality Solutions | February 20, 2011
Now that budget season has concluded for most operations and a plan has been made for the 2011 year, there is still much to consider for those who wish to prosper in this otherwise rather fragile economy. Although perhaps in some cases, it may be more that businesses would just be happy to maintain some sort of status quo until the light at the end of the tunnel can be seen. Naturally, it always has been necessary to aim for additional revenues from the same market segments, perhaps revenues even from some new segments or revenues from additional sources; that is, if your business was fortunate enough to renovate or upgrade services in one way or another.
In any case, as it is always desirable to secure more revenues overall, as well there should also be an alternate focus on turning any revenues into profits. Consequently, the only way to ensure that any regular revenues or newly found revenues stay within the business is to monitor both revenues and expenses on a daily basis with a keen eye towards limiting expenses – particularly as always with an eye on that biggest operating expense that is payroll. So, having created a blueprint for the annual business in the budget, it is now important to work to stay in sync with that defined budget plan as well as the ongoing forecast on a day by day basis.
What then should a property expect in daily operations information that can be reviewed in such a useful report? What is the information that Hotel Managers at all levels should utilize to make proper daily business decisions that are in line with the more detailed established budget plan for each week, month and remainder of the year?
The first requirement of the proper daily report is the obvious income journal information gathered from the main property systems that comprise the axis upon which the benchmarks will be made. That is information such as rooms available, rooms occupied, room revenue, per outlet covers by meal period, per outlet average check by meal period, per outlet revenue by meal period and other similar, related revenues and statistics for golf, spa, casino, etc.
It will be these very revenues and statistics which when associated in ratios to one another, will then combine to create the performance indicators that managers will use on a daily basis to compare against last year, forecast and most importantly, budget data. These ratios such as average room rate, cost per occupied room, cost per cover, cost per treatment, etc., can then be reviewed daily by managers to analyze current situations so as to make more timely business decisions for their respective departments and/or entire operation.
The blueprint for all information is the annual budget which is in essence the business plan that is designed with revenues, expenses, labor, cost of sales and benefits set in stone as the ultimate goals to meet, exceed or remain below as appropriate. As the budget cannot be changed once created, it is a critical component for the management of operations.
The Hotel Business Review articles are free to read on a weekly basis, but you must purchase a subscription to access
our library archives. We have more than 5000 best practice articles on hotel management and operations, so our
knowledge bank is an excellent investment! Subscribe today and access the articles in our archives.