Thursday, December 23, 2021

Enabling better efficiencies within a hotel chain via an integrated digital tool:

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The key objective behind such a digital tool, is to enable better efficiencies within the hotel chain as a whole, by focusing on better value proposition for three key constituencies – employees, guests, and vendors/business partners, which in turn would facilitate a better brand-value for such a hotel chain. That it would ultimately result in improved top-lines and bottom-lines is obvious.

 

Some features of such a digital tool, conceptualized for a leading hotel chain could include: 

  

Quality Initiatives:

 

  • Standard checklists with regard to each process department-wise and property-wise to be posted. Basic philosophy of “Doing it right the first time” to be adopted for each process. Besides facilitating learning across group properties, this would also motivate the respective department heads to constantly raise the performance standards of their respective teams,  

 

  • Deviations from agreed upon parameters as specified in the checklists with root-cause analysis to be incorporated, for easy reference by other department heads in various group properties. This would facilitate proactive measures to avoid unnecessary repetition/s of the same,

 

  • Inputting each guest feedback product-wise and property-wise, to be shared with all the other group properties to enable proactive measures on any negative feedback in other group properties, besides serving as an inspiration for more positive feedbacks,

 

  • Input the findings of process audits conducted department-wise in each property, along with suggested measures to plug the gaps so identified. This would facilitate proactive measures in the group as a whole, leading to non –repetition of any deviations in the said processes in other group properties in turn leading to better service levels to guests,       

 

  • For each property, all allowances made due to disputes in the invoices generated, with their respective root-cause analysis to be posted. Commonly occurring root-causes to be identified and fixed at the process level itself, to prevent such disputes from re-occurring. Such root –cause analysis to be accessed by other group properties as well to enable them take corrective measures on a pro-active basis,

 

Profitability:

 

  • Highlighting market-wise, product-wise, and segment-wise gross revenues and net profitability for each property. Cross-learning for respective department heads could follow,

 

  • Identification of key accounts, individual guests, Travel Agencies, online sources etc who are patronizing more than one or more group properties, along-with their respective business volumes product –wise and contribution to each property’s bottom line. This would facilitate a holistic view of top revenue generators for the group as a whole,  

 

  • Posting of complete details account-wise and guest–wise, such as: total number of room nights given, banquets and other F&B revenue, weighted average of the number of days taken to get the payments, number of allowances passed, commissions given to solicit the business (if any) and the net profitability of the said account. This could be on a year-to-date basis with the flexibility to do a comparison on two different periods as per the requirements of the respective Account Managers. Furthermore, a tailored MIS with respect to above can be generated from the system on a periodic basis, which could be shared with the relevant decision-makers of the respective accounts, 

 

  • Generate reports/MIS through the system, based on varying sort criteria for e.g. descending order of profitability account-wise, or guest-wise, descending order of revenue account-wise or account-wise, delays in the receipt of payments in descending order account-wise or guest-wise, number of allowances passed in descending order etc. Such reports/MIS need to be generated property-wise as well as for the group as a whole, for business decisions at different levels,

 

  • Monitoring of total account receivables outstanding end of each month as a percentage of say three-month moving average of total billings, along-with ageing of the same. Specifically, in case any particular account has reached higher than threshold exposure in any single group property, then other group properties need to exercise caution while extending any further credit to this particular account,

 

  • ‘What if analysis’ to facilitate an impact on the profit numbers under different scenarios. For e.g. what if the room rate is negotiated higher by ‘X’ amount, what if the account is convinced to pay at the time of check out instead of availing BTC (bill to company), what if there are no allowances to be passed, what if the room nights are increased by this account by a well defined number, what if the commissions paid are reduced to a well defined amount or eliminated etc. Furthermore, the various outcomes by combining two more of such hypothetical scenarios, to enable informed decisions guest-wise, account- wise, property-wise and group as a whole,

 

  • For all delays in receipt of payments pertaining to BTC cases, identifying causes for delays in realizing payments beyond the credit period as agreed upon, and post the same guest-wise, as well as property-wise. Further working out action plans for commonly occurring causes, which could again be posted for the benefit of other group properties.  

  

Market penetration:

 

  • Pro-actively managing dormant accounts property-wise by pre-programmed alerts to highlight extraordinary time gaps in repeat business from an account or a regular guest. Furthermore, reasons behind such gaps and corrective measures taken to revive business from such dormant accounts be also posted, for the benefit of other group properties. Typically, if the office of one of the key accounts of one of the group properties,  has relocated far away thereby turning it into a dormant account for that property, then another group property which is now relatively close to this account can offer the same facilities at the same price which it had enjoyed earlier before relocating,

 

  • Gauging the efficacy of loyalty program, by monitoring spending patterns of each guest so enrolled in such program, and his/her spends property-wise, department-wise, and furthermore item-wise. This in turn can be used for tailored offerings to each guest,

 

  • Creating guest life-cycle and making tailored offerings. E.g. for couple married in any group property, a tailored offer to host their first wedding anniversary, first birthday of their first child in any group property at a special rate with customized menu etc,

 

  • Leads generated through multiple sources for each property to be posted, along-with follow-ups done and offerings made to elicit business from such leads. Unsuccessful attempts at a property along with specific reasons, could be a lead for other group properties to work out tailored offerings to such leads, thereby attempting to elicit business from such leads. 

 

Cost Optimization:

 

  • Collating total purchases item wise in both quantitative and monetary terms for each group property, to work out potential business volumes from the group as  a whole, which can be used as bargaining tool with respective vendors,

 

  • Monitoring food costs as a percentage to sale revenues outlet-wise in each property, by comparing the data regarding cost of various items supplied from the food stores to respective F&B outlets viz-a-viz net sale revenues booked from such outlets in pre-specified periods. Such comparisons across identical outlets in other group properties, could lead to ideas for realizing better food costs as a percentage to sale revenues for respective F&B outlets,  

 

  • Monitoring F&B related promotions with specific reference to the strategy deployed and costs incurred to promote the same viz-a-viz revenues realized. Details of the same could be viewed by other group properties for necessary fine-tuning of strategies while undertaking such F&B related promotions in future,

 

  • Sharing key maintenance related information from property management modules of various group properties, with the objective of inculcating shared learning and inculcating proactive and preemptive practices to significantly reduce if not completely eliminate down-time of key machinery and equipment, besides reduction of energy related expenses,

  

  • Sharing details regarding slow moving items in stores of various group properties to ensure that the same are not purchased in excess by material management teams of other properties, and if there exists a possibility of transfer of such items from one group property to another.

 

Vendor Management:

 

  • Business volumes generated for each vendor with respect to his/her product/service offerings,

 

  • Extent of adherence to the deadlines specified in the Purchase Orders by the vendors,

 

  • Extent to adherence to exact specifications of items as mentioned in the Purchase Orders by the vendors,  

 

  • Time lags involved in the receipt of invoices from the date of receipt of items/services,

 

  • Quality checks and defects identified if any in such invoices,

 

  • Extent of adherence to the committed credit periods for each vendor where payments are concerned, and any unacceptable delays in such payments to be identified and acted upon,

 

  • Short supplies/delays in the receipt of product/services from each vendor,

 

  • Feedbacks from the user departments with regard to the quality of each product/service

 

  • Average delays in receipt of items/service from respective vendors from the date of issue of the Purchase Order.

  

Talent Management:            

 

  • Key feedback from employee surveys and suggested corrective actions as decided by the concerned authorities in each group property be listed, for the benefit of key decision-makers at other group properties,

 

  • Job vacancies in any group property could be notified to facilitate job-rotation and career development within the group as a whole, thereby reducing voluntary attrition,

 

  • Extraordinary achievements by any team member at a group property to be highlighted  so as to extend the required recognition for the team member, besides to serve as  a source of inspiration to other team members within the group as a whole,

 

  • Results of exit interviews property-wise along-with suggested corrective actions to be highlighted, for the benefit of key decision-makers other group properties to reduce voluntary attrition.   

 

Above all, in every module pertaining to each of the functional areas as highlighted above, the right Artificial Intelligence related software and algorithms could be built in, so that this integrated digital tool enables prompt and correct decisions by the respective users.   

                                                    

While it is appreciated that any integrated digital tool may not be able to immediately support some of the features as mentioned above, yet incorporating all such features in the integrated digital tool, besides several other features related to back-end operations, could form part of future action plans for any hotel chain. And of course, such a digital tool can be improved consistently, based on user feedbacks and business related needs.

 

 

 


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