Today marks a milestone in my hospitality career. You see it was the Friday after Labor Day in 1976 that I started my job as a Desk Clerk at the Hotel Sofitel in Bloomington, MN. Over the last 40 years, I’ve worked in every department in every type of facility throughout the hotel, restaurant and casino (non-gaming) industries.
My initiation behind the front desk in 1976 in the Minneapolis-St Paul market was unlike anything I’ve seen since, where demand outpaced supply. Imagine every hotel room in the greater Twin Cities area, full every Sunday – Thursday, where the only Sales effort needed was to try to fill weekend rooms. At that time hotels like the Radissons, Marriotts, Ramadas and Sheratons were the upscale Brands of the day with rates around $79-$89 a night. The Sofitel with its French-based theme and restaurant was one of the premier hotels then and charging in excess of $100 a night. I couldn’t believe what people were willing to pay for a hotel room, but I soon learned to trust the process. Working the 3P-11P shift, taught me how to control inventory effectively if you wanted to put the last head in the last bed, because walking guests meant sending them 35 miles east to Hudson, WI or 70 miles north to St Cloud. I became adept at perfect fills and in looking back on those days, realized that I was learning inventory control and revenue management long before those processes had names. Now at that time, perfect fills didn’t just happen. There were of course changes in people’s travel plans every day and so trying to learn how much to overbook to offset the cancellations for that day with just the right amount of reservations became the game. I began to track by day of the week these patterns, so that based on data, we could make intelligent booking decisions.
I reflect on learning these strategies then to illustrate the importance of analysis and planning for lodging facilities. Today, with increased supply it is more important than ever to spend the time to really know your property and your market. There are fewer times regularly that innkeepers can rely on simple compression to fill their rooms.
It’s just past Labor Day and for many lodging owners and GM’s, you are beginning to think about next year’s budgets. For Branded properties and others, this is an annual rite of passage into the guesswork of how you believe your property will perform in the upcoming year. But for some, especially smaller properties don’t have the resources the larger chains have with positions dedicated to revenue management and in the case of the Casino industry, business analysts. It’s no less important (probably more so) for smaller properties to plan ahead so that they can realize their fair share of the occupancy pie in their market. All the more reason to know the market as well as you can and how your property fits into scheme of it.
The best way, in my opinion, to plan ahead is to look back. You can learn a lot from history. Unless you are totally functioning in the dark ages, your property will have some sort of Property Management System and/or Point of Sale System. These are always configured with a multitude of reports that can slice and dice your business activity. But it’s been my experience that although thorough in its ability to store data, PMS/POS systems rarely integrated well enough to spit out precisely what I was looking for over a longer period of time. Daily reports were great, but in terms of looking over your entire enterprise (rooms, F&B, retail, spa, etc.), the snapshot I was looking for involved looking in multiple places.
Now I was always good at Math, degreed in Business Administration and found back when Lotus 1-2-3 first came out, that I had a natural aptitude for spreadsheets and their practical use. So I designed something easy for me to use a with just a few pieces of information from my Daily Reports, I could command data to help me manage my revenue processes. By simply knowing my rooms occupied and its revenue for the day (best if you can distinguish between FIT and groups, if group business is important to you), I could start to watch my history build. Even better if you have budgeted goals as you can then measure them against your current results and see how you are trending in the reporting period. If you want to track F&B you want to use covers and revenues, by meal period preferably and break down food vs. beverage. With these few pieces of daily information you can build history of results that will be invaluable for measuring results, but even better, when next year’s budget planning time comes, you can look back at the last year’s results and plan accordingly based on facts.
Now every PMS/POS system touts these data sets, but until recently, I hadn’t seen any way to easily integrate the information from multiple sources into an easy to read and understand format to help manage your hospitality business. The cloud-based integration systems out there today seem to be accomplishing that, but of course the price tag is considerable and effective for larger properties that can afford such a system.
Smaller properties are succeeding and showing profitability in today’s market. But, they have learned to use their data and learn their market effectively in order to maximize their efforts. My point is that with proper planning, you can’t help but succeed.
Actual Hospitality Consulting was formed to be an advisor and a resource for smaller properties to learn how to make their hospitality businesses prosper. It is now time to share my experience and knowledge with the next generation of hospitality professionals to mentor them to become successful operators. In every property I have managed, I have used these systems to improve occupancy, rate, F&B covers and revenues with great success: all through learning from the property’s history. You too, can learn from our experience. Feel free to reach out to us and see how we may be able to assist you.