Creating a Team’s start line towards progress
Goal setting must be truly orbital to your business, surrounding every aspect of a Hotel’s operation. Gone are the days of traditional Key Performance Indicators (KPI) for results-driven performance. We now know more, want more, and demand more, so conventional KPIs are unfortunately no longer sufficient. Instead, we must set objectives that embed every aspect of operation beyond the common industry acronyms.
Traditional Hospitality KPIs would include goals for Occupancy, RevPAR, GOP, profit indicators, ROI, guest satisfaction scores based on surveys, Mystery Shopping Quality self-checks, or through leading companies such as LRA/LQA/Forbes, etc. However, now that we have the technology and the means to measure most of what we do in real-time, we want to go beyond. Let us ask ourselves: What other metrics measure how well we run our operation?
Financial Goals
Traditional financial metrics such as ADR, RevPar, Occ, ALOS, MPI, RGI, GOP PAR, ARI, EBITDAR are essential to managing hotels. However, to run in a progress-based manner, it is crucial to make each department leader the owners of their budget and expense management, even for non-revenue generating departments.
Line Junior Managers should have own their financials. Namely, the department’s balance sheet, P&L, and departmental budget. Department Leaders should know in advance how much they have available to spend for the month, provided occupancy and revenue stay as planned. Once Senior Leaders have trained the Juniors on this concept, then they must:
- Provide a monthly stage to review and justify every P&L line that deviates from expectation
- Guide on how to adapt to rapidly changing occupancy and revenue forecast metrics, so they can independently adjust their available expenditure in real-time
At a higher level, the Finance Management, with the help of Executives, should also have a space to analyse and display the Hotel’s Asset Management’s success. At a minimum, to self-evaluate efficiency and effectiveness, look for additional streams of business, valuate concept changes, and plan strategic refurbishments. The right tools and strategic processes provide insight into the company and its potential. And ultimately, look at how we contribute to the real-estate value of the property or re-utilization of rental space, for example.
Ensuring your Owners’ interests are at the forefront will also provide a beneficial relationship and ensure the necessary funds for capital expenditures and buy-in for other projects.
Revenue Management & Sales
Account production, RevPAR, ADR, Market share, occupancy percentages are the traditional starting point. Take this one step further to identify additional opportunities. At a minimum:
- Lead Conversion rates over time
- Market Penetration and Revenue Generated Index
- Successful first-time Sales Calls (not just the number of visits, that is just a time-waste, but actual effectiveness of the sales call)
- Business generated from repeat-Sales Calls
- Quantity and production of new Corporate Accounts
- Tracking of new repeat business generated
When it comes to remote support or Sales Management, it is essential to track the Corporate/Regional sales office’s actual sales conversion. Namely, taking a look at their production vs. cost and loss of business to other sister properties. Whether you have a say or not in the arrangement’s continuation, having fair and sound data will ensure you can ask the right questions to the right audience, so they improve your Hotel’s results.
Service Excellence
Service excellence is the ultimate goal and the real driver of our business. So why do hotels often base their service performance evaluation on quarterly Mystery Shops? One wonders if this is representative of the other 40 to 70’000 Guests that visited that Hotel in a year (average 150 room hotel).
The industry has evolved; Guests love to play food critic, post video reviews, sharing their experience and marketing your business for free. So let us use that feedback for the evaluation framework. At a minimum, Service Performance goals should include:
- Daily tracking of in-stay or post-stay Satisfaction Surveys (Each department should have assigned related goals to own)
- Service Recovery Data – Complaint tracking (split in CAPEX vs. SERVICE related)
- Third-party Bookers ratings and comments
- Social Media reviews
- Social Media engagement (whatever is hot today; IG, Tik Tok, etc.) activities and response
- TripAdvisor and other reviews (including the number of mentions per colleague)
- Profile Data Quality and Integrity
Set a goal for each relevant area and every department. This target allows the Team to own their departmental progress and visually race against all others. Surveys should be reviewed yearly to ensure the questions are relevant for today’s Guests’ concerns and business drivers. In addition, monitor data integrity to ensure no fraudulent activity.
Then, of course, especially for franchised and managed Hotels, ensure a Quality Assurance Mystery Shop that enables the Brand to keep alignment and accountability. The Mystery Shopper should be unidentifiable, and Hotels attempting to inform their Team by identifying the Mystery Shopper should be penalized. Meanwhile, eliminate any shame towards a low score of a single Staff member. The consequence of service faults should be a comparison to overall Guest satisfaction and a structured improvement plan.
Operational Excellence
Operational Excellence measures technological/non-technological innovation, operational efficiency, effectiveness, and process compliance.
Being efficient and effective is more important than ever, especially to adapt to rapid fluctuating demand. To measure this further,:
- Do you have third party Health & Safety checks, and what are their results?
- What were your innovative projects this year that your competitor has tried to copy?
- What is your current Headcount, and what processes and creative scheduling do you have in place when the business shifts swiftly – how effective was it over a changing environment?
- How fast was your adaptation to a change in pandemic restrictions, demand, legal, or business requirements? Do you have a flexible plan in place?
- What have you done to manage inventory wisely?
Operational Excellence will look at how well resources are utilized to ensure the maximum result with the minimum effort. Hotels must self-check at least once a year to eliminate rework, duplicates, non-value-adding work, and all manual reporting. Goal-setting and quantifying labour and project- efficiency, together with praising accomplishments in productivity and effectiveness, will ensure to set the right mindset for a Hotel’s Team.
Orbital Goal setting may seem complicated, but every department’s Head input will take little time and become a great igniter to a great conversation. Orbital goal-setting is what will set the startline of where to work from. In reality, you just created the baseline for a progress-based operation. We hope you are ready for your Teams’ question: “What’s next?”
