“I can see paradise by the dashboard light” – Meatloaf….
Dashboards are relatively new and offer the hotel executive, key business indicator visibility, time savings in report reading, a quick comparison to plan and if properly set up real time information on certain attainable key measurements.
So these dash boards are great for the executive or an owner to see from the top down what’s happening at a macro level inside their enterprise. Waking up every morning and being able to see the company’s previous days and month to date sales in total, buy region and even by hotel and department is pretty impressive and useful.
But my question always is, what’s the process and the metric for the line or department or even division manager. What’s their dashboard or KBI that they can easily forecast, track and measure against to ensure their piece of the enterprise is performing well. If I could start ever day, week and month and know the one or two key measures that equal success in my area I have simplified my measurement process considerably. Nail these one or two key measures and the rest comes together. Consolidate my results with a couple of dozen other key managers in my hotel and the end result is a nice looking dashboard for our executive, GM or owner, and better still a financial statement that makes sense with few surprises.
Now we need to clearly distinguish revenue which is easily tracked in real time each day and the Omni present payroll, expenses and cost of goods. Let’s put the revenue aside as its easily captured and that’s great. We know our revenue picture and tracking it to plan is paramount. But what about all the key business indicators that lie beneath the surface and don’t really come up until we have a monthly statement. This is where we need to get tactical.
Inside a full service hotel, we have an average of 50 key metrics that need to be tracked daily buy 30-40 managers. So each manager or assistant manager only gets one or two numbers. They forecast the upcoming month and then track throughout the month their key measure(s). These are granular in nature but the compilation of all of these is powerful stuff.
Here are a few that every good hotel manager knows are key to a successful month end profit picture.
Room Attendants – hours worked per room occupied
Housekeeping (non room attendants) – hours worked per room occupied
Kitchen – hours worked per cover
Stewarding – hours worked per cover
F&B Outlets – hours worked per cover
Recreation – hours per day in the forecast
Spa – hours worked per treatment
Guest Supplies – cost per room occupied
Laundry Costs – cost per room occupied – hours worked per room occupied
These are but a few of the key measures. What is instrumental here is that every area needs to be defined, what is the key measure and how is it tracked, and best of all who is made an agreement and takes responsibility.
Here is an example. Marcia is the linen room manager. She has two numbers to forecast and track. Linen purchase and outside laundry costs. Let’s take the linen purchases first. The forecast is for $5000 in new linen purchases and 10,000 occupied rooms. She can spend$.50 for every room occupied. She keeps track of the occupancy forecast and makes two linen orders per month. She sees the month is trending a bit soft in occupancy so she drops $500 off the second order. Linen cost per room occupied is in line. Notice we don’t fixate on the dollars, it’s the cost per unit that Marcia tracks first. Next it’s the outside laundry costs. The hotel contract is for $.30 per pound and the average room occupied uses 13 pounds. Daily she gets the poundage reports form her laundry vendor and does the math against the rooms occupied and zero’s in on her $.30. Daily tracking is the key. Wait ten days to track it and game over.
If you get creative you can design the KBI’s in your hotel at exactly the right and impactful level. Approach your leaders with agreements and not expectations and they will want to do this. Managing your hotel from the bottom up is the way to go. What are your 50 key metrics.
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