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  • HITEC Special: Revenue Strategy: Not Just a Fancy New Name for Revenue Management

    By Cindy Estis Green. A strategic view of revenue calls for proactive business mix planning and decision-making around deployed resources, well beyond reacting to what comes over the transom. Excerpt from the 2018 HITEC Bytes Special Report.

  • HITEC Special: Forecasting Accuracy: The Living Forecast

    By Jill Wilder. Forward-looking, continuously updated statistical trend analysis is emerging as a strategic tool that performs the practical magic of creating an accurate forecast you can take to the bank.

  • Members Only: IT Spending in the Lodging Industry

    HFTP Research Report: The new USALI Schedule 6 — Information and Telecommunications Systems and the effects thus far on the industry. An analysis of IT spending data in the industry and compliance practices by lodging executives.

  • Primary Club Metrics

    Survey results identify which metrics are most often used to determine performance. By Agnes DeFranco, Ed.D., CHAE; Tanya Venegas, MBA, MHM, CHIA; and Amanda Belarmino

What do asset managers want?

hotelnewsnow.com Featured Articles·22 June 2018
Here’s a look at how asset managers and management companies can work together efficiently.

We must be better than this

hotelnewsnow.com Featured Articles·22 June 2018
It is time for us all to push our elected leaders into good-faith, aisle-crossing discussions about immigration so our government never again separates the families coming to our country looking for a better life.

Culture Is Stronger Than Knowledge

The Boutique Search Firm ·20 June 2018
We often hear of the General Manager who moves from Tucson to New York and finds her/himself completely lost the minute a union representative demands an audience. Worse yet, suppose your company promotes you, after 10 years in Seattle to Atlanta. Or from Provo to San Francisco.I am asked a number of times a week "what is like to live" in Georgia, Texas, Colorado, Utah, Louisiana, Massachusetts, New York, Illinois, New Mexico and many more. It is our job to know not only the corporate culture of the potential placement but the local culture of the potential city. There is no such thing as "the United States" when it comes to leadership and upper management. Large corporations are well aware of it, hence the "Irish promotions" they generously issue when they are looking to get rid of someone. One of your General Managers has never worked in a large city, raised all four of his children in Podunk, and has a wife involved with the local Junior League. You happen to know he owns a home in a depressed market and is accordingly "under water". But the man is not your favorite, and obviously you cannot terminate him. So you reassign him to New York-a city that is far far away, culturally, from Podunk. My prediction is that he will not last or will his marriage.When "expats" started being shipped around the world by the initial Big Three (InterContinental, Hilton International and Sheraton) back in the late fifties, it did not matter much who was shipped where: the General Manager of a global hotel had basically NO contact with the local population and was mostly a figurehead. Whether they were Austrian, German, Swiss or Dutch, as long as their English was fluent, they had no need to speak any other language: you could be the GM of the Istanbul Hilton for 8 years without having to learn or utter one single word of Turkish. In Africa (Cameroon, Senegal, Congo, Rwanda, Togo) the GM and their family often did not leave the hotel compound for weeks on end, and then mostly to be taken to the airport for an R&R flight*.Those days are over: you do not assign a General Manager, for example, who is Jewish to Muslim countries any more than Taiwanese executives are assigned to China.ACT GLOBAL, BUT THINK LOCAL?We have heard this for a number of years now. Yet I believe it requires some debunking. Take Ramadan as the most visible example of a cultural phenomenon in a very large area of the world. If, as the General Manager of a luxury hotel in Egypt, Qatar, or Bahrain, you do not try to understand the hardship fasting in 100+-degree temperature imposes on your staff, then you just do NOT belong there. Unless you learn that when Balinese say "yes" they often mean "no", you will not get much accomplish there either.Dealing with ownership, however is where a high level of understanding and diplomacy belongs: to a Chinese owner, a white round plate is just a white round plate. He can purchase or have them made for $1 apiece. The problem is, for you, there is a huge difference between his $1 plate and the $42 Villeroy & Boch plate you specified for your fine dining restaurant. Avoid featuring an "all you can eat" buffet anywhere in your hotel: within minutes half of the food will be on the floor and fights could erupt over shrimp.Owners in the Middle East often are interested in building monuments to themselves: as an architect, do not spend too much energy proposing a streamlined, purely elegant building: they will have so many change orders until it morphs into "La Mamounia meets the Candy Spelling Mansion" you won't even know what hit you. Give them what they want in the first place.Last but not least, do not go around, as a General Manager, with inflexible staffing guides and productivity indexes: what is no big deal in Houston or Minneapolis is an impossible goal in Istanbul.ACT LOCAL, THINK GLOBAL*Until very recently (it still exists in the worst of hardship destinations) senior hotel management would receive, as part of their benefit package, a once-a-year or twice-a-year R&R gift from their employer: 4 days in a major destination of their choice, including flights, hotel and food. Suppose you ran a hotel in Borneo, your R&R would take you to Singapore. Were you to run a hotel in Guangzhou, it would be Hong Kong.
Article by Jim Butler

What do top hotel executives see on the horizon for 2018?

JMBM ·20 June 2018
Meet the Money is a productive conference with a casual atmosphere; the executives and other hotel industry representatives who attend often speak candidly about their expectations for hotel finance, development and investment throughout the upcoming year.The short video below highlights how some of our attendees feel about 2018--watch and find out what some of the industry's most well-known brands, banks, consultants, mangers and developers have to say about what's on the horizon.For more in-depth data and research, you can view our special presentations this year, including those from STR, HVS, LW Hospitality, City National Rochdale, and CBRE.One of our founding sponsors, Hotel Business, put together a great video during the conference that will give you an idea of what it's like to attend Meet the Money and includes my thoughts on the current lending landscape.Another longtime sponsor and important industry publication, HotelNewsNow.com, has an insightful summary of the important discussions our Meet the Money panelists and presenters touched on throughout the conference-their "Head-scratcher of the day" and "Quotes of the day" are especially interesting reads.Meet the Money 2019 will be held May 6-8 at the Hyatt Regency LAX--it'll be here before we know it. Registration will open later this year. Check MeetTheMoney.com for more details.
Article by David Lund

Hospitality Financial Leadership - The Busy Hotel Executive

The Hotel Financial Coach ·19 June 2018
Many people are fond of saying the numbers are the hard part of hospitality. That's not true. What is true is we do not exercise these muscles. We do not even know we have a financial muscle in many cases. This story is about one of those people and how I was able to help her. Names and places are changed to keep anonymity.Tina emailed me with a somewhat cryptic and erratic message that almost had me delete the email without even responding. A message about needing help with budgeting and I could tell immediately that this person was racing against time. You know the kind of note that someone writes when they are doing three other things at the same time. That's what my instinct told me. It also told me to slow down and see if this was someone who needed my help.I replied to Tina's note and suggested a call to discuss her needs. She immediately replied yes, and I followed up with two open times in the following week. She replied, and we had a time for our call booked--now she just needed to confirm a phone number for me to call. No response to this question. I sent a note early on the morning of our scheduled call that I still needed a phone number. No reply. Ten minutes past the time of our call and my phone rang. I did not recognize the caller, so I let it go to voicemail. It was Tina. I picked up the phone.That was a long paragraph to tell you this lady was a busy hotel executive. She was just appointed as the director of operations in a 600-room hotel in Chicago. She immediately impressed upon me just how busy she was with meetings, long hours, vacant leadership positions, a 90 percent occupancy week, owner's meetings, a GM that had expectations. All of this in less than 60 seconds. After I had an opening in the barrage I asked her how I could help. She told me she had more than 15 years of experience, but numbers were not her strong suit. Lots of operational experience in both rooms and F&B, but not comfortable with numbers.We talked, and I asked her why she didn't have a comfort level with numbers and she said it was just one of those things that never naturally came her way. No direct experience and spending most of her career in positions where the numbers were not part of her responsibility. A familiar story and a hallmark of hospitality. Look after the guests and the colleagues; someone else will look after the numbers. I did not believe her for a minute. But it was way too early in our relationship to tell her the truth. If she stuck around long enough it would be revealed, but not now.I listened to a few more war stories and then I asked her if she would like to have another call where I would coach her. My gift to her. She said she would like that. We coordinated a time, I got her number and that was that.Over the next three weeks, she canceled and changed the appointment four times. This is a busy person. No, not busy, just not committed to herself. I see this quite often. When we finally did get on the phone I asked her about her commitment to herself and specifically how committed she was to change the relationship she had with her numbers. She seemed kind of puzzled by my question."I want to get a better understanding of the numbers," she said."Why have you rescheduled our call so many times?" I asked.She went on again about how busy she was, and I listened for a moment and then asked, "Over the last two weeks since we spoke, did you have dinner every day?""Yes," she said."Did you manage to get to sleep every night?""Yes," she said with a little laugh."What about coming to work, did you manage to get to work each day you were required to be there?""Yes, what's this all about?" she asked.I replied, "Your problem with numbers isn't because you lack the ability, you are just not committed to it. And unless you are willing to make it a priority and lock in the time, it is not going to happen."There was a moment of silence and I was not willing to fill the void. I waited for what seemed like a long time until she spoke."I know," she said, "I do this a lot with things that I think are difficult.""How you do this thing is how you do everything in your life," I said."If you're willing to recognize that and if you are willing to really commit to this, then I can help you," I continued, "If you're not, then do us both a favor and let's both move on.""No, no," she said, "I want this more than anything right now and I'm willing to commit.""That means a weekly call with me that does not get canceled or postponed, ever. Making yourself and-- in this case--your development as important, or more important, than the one thousand other things you need to deal with each week. Make your learning and personal development the priority and schedule your world accordingly."This is what's missing. If you think the numbers in hospitality are the hard part, then you are just not committed enough to change that. Up your commitment and the numbers will start to come together for you. It is no different than anything else in life.The very notion that somehow you were in the wrong checkout line when they handed out the numbers gene is not true. It is just a popular excuse.What you focus on in your life gets results, it is that simple.If you would like a copy of any of the following send me an email at david@hotelfinancialcoach.comIncentive Plan TemplateEFTE and Productivity ExerciseHotel Financial Policy Manual - Inventory of "Sections"Hotel Financial Coach "Services Sheet"A White Paper - Creating a Hotel Policy ManualF&B Productivity SpreadsheetRooms Productivity SpreadsheetFinancial Leadership Recipe F TAR WA White Paper - A Six Month Workshop and Coaching AssignmentHotel Financial Coach - "Speaking Sheet"Flow Thru Cheat Sheet - EnhancedVisit my website today for a copy of my FREE guidebookThe Seven Secrets to Create a Financially Engaged Leadership Team in Your Hotel www.hotelfinancialcoach.com

What hoteliers can do when crises strike

R. A. Rauch & Associates, Inc. ·18 June 2018
The U.S. has been hit with the longest streak of crises--mass shootings, natural disasters and security breaches--in the past decade. Hoteliers need to better prepare and develop plans for not if, but when crises strike.Crisis management will gain importance as active shooter training is added to a hotel's playbook and cybercrime continues to increase dramatically."Run. Hide. Fight" training and a technology expert at each company is now required. It is paramount to our future liability that we train our staff and have procedures in place for all potential crises.As to General Data Protection Regulation (GDPR), this has come up quickly and applies to all hotels, especially those that pursue European travelers. Hotels need traveler consent to store any data related to a European traveler, and it is recommended that we start doing that for all guests.Active shooters and disastersHigh school shootings have occurred far too often. The Santa Fe High School shooting could have been far more traumatic and caused the loss of many more lives if the school hadn't had both security and "active shooter" training in place. The training is now required for all hotels. The FBI, your local police department and Homeland Security have comprehensive materials on this subject that will provide as resources for hoteliers. Being prepared for any terror event or natural disaster is critical to both saving lives and minimizing negative impacts.Rapid hotel evacuation is key to a crisis plan, and all team members must know the evacuation route. Rapid lock down of the hotel or areas of the hotel will limit a shooter's movements. It is vital that hotel staff become acquainted with Homeland Security's detailed guides on this type of training activity. Developing a first-responder pack that includes detailed hotel plans and critical infrastructure would be paramount to a crisis plan as well. Cellphone numbers of all team members must be available to ensure safety and enable crisis communication.The same protocols regarding evacuation should be established for natural disasters. Just recently, a fast-moving lava flow from Hawaii's Kilauea volcano led local officials to close a highway on short notice. They needed to communicate to all travelers that thin strands of glass fibers carried in the wind could injure eyes and lungs. There must be real training and tangible procedures in place as we must never assume all will be calm tomorrow. I just scheduled our 2018 training with our local police departments for our teams, and I encourage all of you to do the same.CybersecurityCompanies should ensure that the property management system is on a different network than public Wi-Fi and that all networking devices have default account passwords changed. All software and operating systems in use must be up to date with the latest patches and versions, and employees must be trained to recognize harmful forms of cyberattacks to ensure the protection of guests.All passwords should be reset when an employee leaves the company. Each front-desk employee should have a unique PMS password as well as a secure computer password. Passwords should not be visible to guests. To ensure the security of computer systems, team members should be trained to lock any front-desk operating systems when they step away from the desk, and to never leave portable devices unattended.Companies need to have internal and external access to IT expert resources 24/7. Protocols should be put in place to prevent hotel staff from using hotel property for personal purposes. Periodic audits of employees and their activities should be enacted to ensure security. This merely touches the basic needs in this area of potential cybercrime.GDPRThe GDPR took effect on 25 May. The impact on almost all U.S. businesses is massive. While this is a European regulation, it will significantly impact the global lodging industry. Further, in the event of a cybersecurity attack or data breach, companies only have 72 hours to report the situation or there are financial consequences.Hotels that actively seek European guests will be required to be compliant with GDPR. This means that hotel guests can insist their data be erased. Sensitive data is personal information about an individual that could be used to discover their identity and gain access to their accounts.GDPR requires us to designate a data protection officer within our organizations. Companies must gauge whether or not any activity outside of the European Union will require communication with a person in the EU after the initial gathering of information. A risk assessment will review the data gathered and allow EU citizens to make updates to their personal data.Put your plans together and go out and have a great summer!

Are you watching your revenue walk out the front door?

hotelnewsnow.com Featured Articles·14 June 2018
The hospitality industry has traditionally looked at food and beverage as a loss leader, something provided as a convenience. This type of defeatist thinking results in potential revenue walking out the door. Guests are people, and people love good food, drink and experiences. Last year, Valor Hospitality Partners created an internal F&B company with Leigh Allan as the global F&B director and Matt Gray as the global culinary director. A team of experts supports them in training, design, ad agency support for naming and collateral design, positioning and a media team focused on social media and digital marketing. Our goal is simple: keeping our guests in-house, and if the property has an external entrance and street presence, attracting locals.

Hospitality Financial Leadership Business Acumen and Women

The Hotel Financial Coach ·12 June 2018
I may have caught your attention with this potentially explosive title, so I hope you will read this and either help change this inside your hospitality business or personally get your hospitality business acumen on, whether you're a woman or not. In my experience in the last 35+ years I know three things are true about women and business acumen. By the way, I think the word "acumen" is the wrong word simply because it has the word men in it. To my way of thinking it is a non-starter right out of the gate because it sounds sexist. To me the words to describe any manager who has their stick together with the numbers side of our business should be Hospitality Financial Leadership Skills. We need the word Leadership in our description. Leadership is about communication and development. Perhaps we could swap out Financial and replace it with Business. Hospitality Business Leadership Skills. I just wrote these four words together for the first time. I am going to try them out and if you have an opinion on the little debate I just started about words and which ones are best, I would love to hear from you. The first thing I know about women in the hotel business is there are not enough in senior leadership positions. Specifically, General Managers. I do not have any hard data to cite here but there are lots of articles that have been published that exalt the unbalanced results. Just google, "Women in senior hospitality management rolls," and you will find lots of links to articles and papers on this subject. Why are the numbers so one-sided toward men?Three main reasonsOne, we do not train our managers on finances. We do not have systems inside our hotel companies to train women or men on Hospitality Business Leadership Skills. We still cling to a system of mentoring, (there goes the men word again). We cling to a somewhat sick right of passage to get the numbers down. Two, men are--more often than women--risk takers. This propels them through the "figure it out as you go" system faster and more often than women. Three, men have always accounted for more senior leadership rolls and they favor more men. Long hours, children, family life and sacrifice all favor a man's world. This is simply my opinion and I want this to change. There is no argument to the imbalance and it has improved but we still have a long, long way to go. The second thing I know is, in my experience, often when we give our female managers training and support around the numbers and they accept the challenge, they are equal to and often better than men at delivering financial results. When I consider what is required to create the kind of engagement with the numbers inside the hotel, I am focusing on managers consistently and accurately preparing their departmental payroll and expense Forecasts. Tracking business volumes, Adjusting their spending to maximize flow thru. Reviewing the month end results for accuracy. Writing their commentaries. F TAR W. Read the article on how to create financial leadership using my system. http://hotelfinancialcoach.com/f-tar-w-the-secret-recipe-for-creating-financial-leadership-in-your-hotel/ Women are better at consistently and accurately delivering these results. I believe this is the reason why: Women pay more attention to the details, they are more organized, and men are more interested in the lime light. I know you are probably thinking that is a BIG statement to make. I make it based on my experience. With the proper training and resources, I would pick my line-up with more women than men when it comes to delivering on financial preparedness. The third thing I know is women have a predisposed belief that they were short changed with the numbers or numbers just are not a woman's thing. It is some cocktail of left and right brain misalignment. All of this is complete BS. There is not one shred of evidence that I have ever come across that supports this.Three important factors are missingOne, women, like men, need to know that in order to get ahead in the hotel business they need to know their numbers. It is not nearly enough to be good with the guests and the colleagues. Being a leader that knows their numbers and can actively participate in the financial and business strategy side is a must for advancement to senior rolls. Without this you are just another face in a long line. This is equally applied to men and women. But more frequently, women are not given this advice and they are not "groomed" as often. There is a great Ted Talk on this subject. Check it out here.Two, both men and women can easily learn the numbers and all it takes is effort, commitment and practice. To learn the numbers--like anything in life-- it takes effort, time and practice. Far too often the numbers are the very last thing aspiring managers focus on. They all use the same excuses:We are so busy.My finance person is impossible to deal with.They just change my stuff anyway.The numbers are just for the senior team.I was told to look after the guests and the money looks after itself.You get the picture. Lots of excuses and victim thinking. If you are going to ramp up your financial skills it takes work. No fairy dust here, just apply yourself. If this is not something that is readily available at work, then seek it out. Find a mentor, a night class in accounting, volunteer for projects that have a numbers side (they all do), ask for cross training. Read a book. Read my past 50 blogs on financial leadership. Oh, last but certainly not least, get a coach. And know this: It will come and when it does you will look back and laugh. You will laugh at all the fuss you made in your own mind before you crossed the financial skills bridge. Three, we confuse things and roles. Accounting underpins the language of business. To have Hospitality Business Leadership Skills you do not need to be an accountant or know accounting. Some very basic concepts, yes, but people think that accounting knowledge is what is missing. Wrong. You do not need to know squat about accounting to do your departmental expense budget and staffing guide, track productivity, adjust spending in the month-for-month based on business volumes, write your monthly commentary, read a P&L or review your general ledger listing at month end, just to name a few. People hide out with a misguided version of what they are missing and in the process of being misinformed they get scared and back away. If you are going to understand and improve your numbers, you must be open-minded and curious about how you can apply your skills and efforts to work those numbers. This is the pivot point because the work to accomplish is NOT accounting. I wrote a previous blog on this very subject with a story of a leader who did exactly this with her numbers. http://hotelfinancialcoach.com/hospitality-financial-leadership-financial-statement-analysis-and-your-hotel-career/ To wrap things up I want to tell you that I have a dream. My dream is the numbers are just as well managed in our business as the guests and the colleague engagement. What that really means is I dream that all our leaders are just as comfortable with their numbers as they are with creating great guest service and superior colleague engagement. I know that it is possible for my dream to come true. Like Walt Disney said, "If you can dream it, you can do it." I also know it is true because I have seen it happen many, many times and, Women, you do not need to take a back seat to anyone. Getting your financial game on is completely within your reach and abilities. Just jump in with both feet and apply yourself and do not take no or later for an answer. If someone or something is in your way, then move around the obstacle or even over or under. Just do not stop and look the other way. The last part of my dream is that our industry understands the numbers for what they are, and we ditch some of our stereotypes at the same time. The numbers are just another part of our business, just like guests and colleagues. Like guests and colleagues, the numbers are not going away. Here is the shift in all of this. We somehow think that the numbers are like grade 10 math, if you pass it you will never have to take math again. Well, the numbers are never going to be perfect and they are never going away. The only thing we know for sure about the budget or the forecast is it is wrong. We need to bring the same lightness to working with our numbers. Remove the seriousness and just get on with the task. We come to work every day to face the imperfect guest service delivery and the colleague engagement mess knowing it is never going to be perfect. Same goes with the numbers. Just take your shot!If you would like a copy of any of the following send me an email at david@hotelfinancialcoach.comIncentive Plan TemplateEFTE and Productivity ExerciseHotel Financial Policy Manual - Inventory of "Sections"Hotel Financial Coach "Services Sheet"A White Paper - Creating a Hotel Policy ManualF&B Productivity SpreadsheetRooms Productivity SpreadsheetFinancial Leadership Recipe F TAR WA White Paper - A Six Month Workshop and Coaching AssignmentHotel Financial Coach - "Speaking Sheet"Flow Thru Cheat Sheet - EnhancedVisit my website today for a copy of my FREE guidebookThe Seven Secrets to Create a Financially Engaged Leadership Team in Your Hotel www.hotelfinancialcoach.com
Article by David Lund

Hospitality Financial Leadership - How the Coach Helped Me

The Hotel Financial Coach · 7 June 2018
Coaching people around the financials in hotels is what I do. I accomplish this by one-on-one coaching usually on the phone, through Skype, or in workshops where as a group we explore and debunk the mystery around the numbers. Many people are fond of saying the numbers are the hard part of hospitality. That is not true. What is true is we do not exercise these muscles. We do not even know we have a financial muscle in many cases. This story is about one of those people and how I was able to help them. Names and places are changed to keep anonymity. Chris sent me an email requesting some of my free documents that I offer on my weekly blog posts. I think he had read the article, "Financial Statements and Your Hotel Career. " His note was uplifting and he thanked me for writing the blog. Short and sweet. I replied and thanked him for his kind words and attached his free stuff to my email. About a month later he wrote to me again and asked if I could help him understand the rooms productivity measurements. I replied and sent him the link to the blog that explains how they are used. "Read this and if you want more help let's have a call," I wrote, "It will be a gift from me to you." He replied thank you and we scheduled a call the following week. During the call, he explained to me that he was the rooms division manager of a 350-room hotel in San Francisco, Calif. They had a labor planning tool and daily labor reports but no real productivity measurements to work with and no labor statistics in the property financial statements. What they were using was "the standard" that the labor planning tool generated based on job tasks that each department manager created for each position. They would input the forecast rooms and the system produced a schedule. They would compare the actual standard to the scheduled standard at the end of each week. All of this sounded familiar. I asked him what the problem was. He said, "We use this tool but at the end of the month the payroll on the financials is always too high and as a result, no one likes the tool."We looked at two things during that first callHe was able to find the latest schedule and tell me how many rooms were forecast for the next week and he also ran another report from the labor tool and was able to tell me the hours that the system had scheduled. We then broke down the hours into the following buckets: front office, reservations, bell desk, room attendants and general housekeeping. We had a subtotal for each and a total number of hours for the week. Then I had him do the division on each subtotal and the overall number. Now we were getting somewhere. Now we had the productivity for each sub-department. This took us most of the hour to unravel and he was excited to see the results. His hours per room occupied by sub-department and for the rooms division for the next week's schedule. He then asked, "Now what?" What I explained next was what he needed to do to make this weekly number relevant. I told him to go back for the past 12 months and get the hours by month for the same sub-departments and in total. Once he had that, I explained he then need to total each month's hours, for hourly and management and divide those subtotals and the total for each month by the rooms occupied for each month. I then told him to only get the productive hours: hours of regular, overtime and double time. No holidays or other hours are needed. He said, "That's a lot of work." I replied, "Not really when you consider what you will have as a result--the baseline productivity for an entire year by sub-department and in total for the rooms division." Then I moved to wrap up the call. I asked him if the information was helpful. He exclaimed that it was indeed, and we agreed on a regular series of calls. In a few short weeks, he was able to start scheduling based on productivity targets and he taught all his managers the productivity system. We then turned our attention to expenses and devised a system for him to zero base his departments' expenses. He, in turn, got his team on board to do the same exercise in each area. We worked hard to get numbers figured out. The last piece we worked on was him producing the commentary for the monthly manager's report that he submitted to his GM. Again, we worked on all the pieces and getting his managers to do their individual parts of the commentary using what he created with the labor productivity and expense management tools. In a few short months, he really grew as a manager and leader. The exercise I put him thru paid off. His department's results--the rooms profit--finished the year ahead of budget. The flow thru to the previous year was off the charts and he accepted a promotion to a bigger hotel and a bigger job. All because he got some help to learn how to use his financial muscles. It's not accounting--it's business thinking--and it's not the hard part of hospitality.For a complimentary copy of my guidebook on creating a finically engaged team in your hotel head over to my website, www.hotelfinancialcoach.com and don't forget to email me david@hotelfinancialcoach.com for some of my free spreadsheets.

Who Says Robots Shouldn't Help Run the Back Office?

Evention LLC · 7 June 2018
It's by far best to create comprehensive corporate automation. By operating in tandem, technology in both the front and back office can most effectively eliminate error and increase efficiency.Some may perceive robots to be the "Big Brother" that will not only steal their personal data, but their jobs as well. However, statistics showcasing the benefits brought to humans via artificial intelligence (AI) and other emerging automated technologies should more than quell this fear.In fact, oftentimes robots, AI, and automation don't replace human labor... they simply redefine it.Take, for example, the restaurant business. It's one traditionally linked to long hours and tolling tasks. As such, its employees benefit when the industry takes advantage of automation's ability to better human productivity.The Wall Street Journal cited that technologies such as these could create between 20-50 million jobs by 2030.On a similar note, robots cannot always function on their own. Automation requires human ingenuity.Just ask MIT professor, David A. Mindell.In a recent interview with Tech Republic, he said technology is "always interacting with the human world in some way or another" and that "the highest expression of the technologies are the ones that work most deeply, fluidly, with human beings."The rise of front-facing robotics in hospitality and retail continues to receive no shortage of attention. Thanks to automations like Savioke's room service robot Relay, Aloft's Botler, Target's Tally, and Lowe's aisle-navigating LoweBot, hotel and retail employees are able to spend more face time with employees.In an article last year, McKinsey & Company shared their insights on the advantages of back-office automation. The company's research found that automation could improve employees' day-to-day work. The firm also pointed to a major financial institution's findings that automating 35% of financial operations bolsters economic stability.Overall, the article explained that automation is necessary to fill gaps in the workforce - not rid business of human intelligence.Concern, McKinsey emphasized, should be focused on the risk to corporate achievement that comes with failing to embrace automation and related technologies.McKinsey says:"...being caught flat footed as competitors gain an edge through automation--is a risk that's not worth taking. Automation at its best can help companies to uncover entirely new ways of executing traditional processes and radically new possibilities for operating more quickly, efficiently, and effectively... the top-quartile companies of tomorrow will be the companies that start the journey today."But how do you begin to rid your back office of archaic practices to reap benefits associated with 21st century automation?In hospitality and retail, employing robotic cash recycling is one option. This solution, pioneered by Chicago-based Evention, streamlines century-old cash reconciliation practices.Rising labor costs cause cash to be increasingly expensive to manage. But, by implementing back-office technology that integrates cash recycling, this automation can minimize the cost of cash management. Furthermore, centralizing this process through the web allows accounting and reconciliation processes to be managed via a shared services platform - providing breakthrough control and efficiency.Today, remaining competitive in the marketplace many times relies on adopting automation. Employing robotics and artificial intelligence are key avenues to automating your workplace.
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Hospitality Financial Leadership: How the Coach Helped Me

Hotel Online· 4 June 2018
Coaching people around the financials in hotels is what I do. I accomplish this by one-on-one coaching usually on the phone, through Skype, or in workshops where as a group we explore and debunk the mystery around the numbers. Many people are fond of saying the numbers are the hard part of hospitality. That is not true. What is true is we do not exercise these muscles. We do not even know we have a financial muscle in many cases. This story is about one of those people and how I was able to help them. Names and places are changed to keep anonymity.

GDPR should be viewed as a spring-cleaning exercise

hotelnewsnow.com Featured Articles· 4 June 2018
The best way to make sure your company does not fall afoul of the new GDPR rules is to look at the whole exercise as a way of analyzing, sorting and streamlining data so the information retained makes the company more lean and focused. Maybe for you the 25 May doomsday deadline for the introduction of the European Union’s General Data Protection Regulation came and went with much the same lack of fanfare I remember associated with the Y2K bug. I rather enjoyed the month of mild panic that came with GDPR from largely useless companies with very little to offer.
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Can Corporate Culture Bridge the Talent Gap?

CFO Magazine· 1 June 2018
This article is about human resources, but to the extent CFOs care about corporate culture and employees — and they should care about those things very much — I’m hoping it’s of interest to them.
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How are banks using real-time customer analytics to improve the customer experience?

The Analytic Hospitality Executive | SAS·31 May 2018
How important is customer experience in banking today? Very. It's the number one business challenge banks face, surpassing even regulatory compliance, because it links directly to revenue. And the stakes are only getting higher as new digital-only challenger banks and fintechs offer customers even more choices. Banks that can improve customer experience in this environment can retain and grow existing customer relationships, acquire new customers and stand out from the pack.

GDPR: Why Hoteliers Should Take the new EU Regulations Very Seriously

EHL ·31 May 2018
New EU rules on data protection - or GDPR - , seven years in the making, come/came into effect on May 25. The advice from IT experts to hoteliers is: take the new rules very seriously or risk heavy fines of up to 20 million euros or four percent of the company's global turnover, whichever is higher.At the recent Young Hoteliers Summit, staged at Ecole hoteliere de Lausanne, Nick Price, CEO of NetSys Technology and CIO of citizenM Hotels, touched on the challenges posed in a keynote address.He said the new General Data Protection Regulation or GDPR was significant as the hospitality industry holds a lot of data which are spread over many different operational systems.In a panel discussion on the future of technology in hospitality after the keynote, he cautioned young hoteliers that their careers in the hospitality industry could end abruptly if they were responsible for a breach.It's criminal law. You can be fined significantly. Understand that the brand will be impacted, not you, the hotel. If your hotel loses some data, you've most likely given access to all your company's data, given how things are interconnected today. Be aware, this is very real.Another panelist, entrepreneur Uli Pillau, founder of tech firm Apaleo, said GDPR wasn't taken seriously enough, as had happened with Payment Card Industry (PCI) compliance. "This is a new topic for the industry and very few people understand what it means. There are big risks with that, but the earlier people take it seriously, the better. And I don't see too many hotel groups and hotels which are really taking it very seriously at this point""Europe has a very different perspective on individual citizens' data than the United States, for example, and these laws are a response to that," Price said during the panel discussion. "You can expect some fairly significant case law established from May when this law becomes enacted Europe-wide and some companies lose this information. With GDPR, European laws will apply and they will fine these companies serious, big money."And his advice to the young hoteliers: "Just sit back and think where customer information is actually held, in which systems in the hotel and how many systems duplicate that information. Imagine how you would collate that knowledge and protect that information in those operational systems, some of which are decades old."Pillau pointed out that legacy systems represent a 'high risk factor'. "The safest way to go is to use token technology which encrypts it entirely, (so that) at the PMS (property management system) or at the hotel level no data is kept which could get outside the systems. I think there are intelligent ways of doing that today."Suzanne Ward, Director of Digital Solutions at Movenpick Hotels & Resorts, noted that not only the data of customers should be protected, but also employee data such as payroll or HR information. "We need to be extremely careful with that sort of data too."Price told Hospitality Insights on the sidelines of the YHS forum that the new rules were 'serious' but would also be beneficial. "This is a good thing as it protects fundamental information about human beings from misuse. We have customers who stay with us and because of the nature of our business as hoteliers, we have to capture information."We have a trusted relationship with these people. They trust us with their safety when they're in our hotels. In order to have that trusted relationship, we have to be able to demonstrate we can protect the information they voluntarily give us and that's quite challenging. But frankly speaking, (the GDPR) should be welcomed by the hotel industry and it's here for a good reason.European governments have recognized, he said, that many companies nowadays are "deriving a lot of value" from the use of customer information."We, as hoteliers, also need to derive value from that information. We need to be part of that same business model," noting that Google and Amazon make money out of personal information and their valuations are 'significant.'Hotel companies should also be able to make money out of the information but in order to do that, they have to be trusted with the information in the first place and they have to give a net beneficial return to the customer that stays with them, which they can do. They're uniquely positioned to do that."But it begins with trust and you can't be trusted as a hotelier by your customer base, if you don't protect really what is in many senses the most valuable data you have, which is the information (you hold) about that customer. So yes, it's a good thing."

Hospitality Financial Leadership - The General Manager's Yardstick

The Hotel Financial Coach ·29 May 2018
The typical GM I have seen, worked with, and gotten to know over the last three and a half decades is hardworking, dedicated and a bit of an egomaniac. Let's face it, to rise to the top in any vocation you need to have all three of those traits. They are not handing out keys to the oval office for the meek and mild, and never to the stay-at-home crowd. The job of a GM is incredibly demanding and responsibilities are huge. The place never closes, the guests always want something, and employees are never satisfied. There is always a pot of trouble cooking, and it is usually wrapped in some mystique and intrigue. I have said this before and I will say it again. GMs usually come from the sales world or an operations background. Which makes complete sense given the long hours and the schmoozing that is required for the job. What GMs bring to their job is energy, enthusiasm, creativity, and passion.What the typical GM does not bring to their role: administrative skills, focus, number savvy, computer skills, finance knowledge, business acumen, and what I always found missing the most was interest to learn any of these skills. GMs rely in large part on their financial person to carry the day. Why not? The hotel is full of parallel examples. They rely on the chef to hold the expertise of the kitchen and produce great food and not kill anyone in the process. They rely on the director of maintenance to make sure the boilers and the chillers are operating. They rely on the human resources manager to ensure the benefits and programs are in place. You would never see or expect the GM to jump in the middle of any of these functions because that is not their job. They rightfully so rely on the expertise of these professionals, right or wrong, to carry the day.When something is amiss in these areas the owner or brand is typically sympathetic and either grant a pass or add resources to fix the problem.What the GMs do not and should not get a pass on is poor financial management. After all, finances are a pillar of the hotel business. Right up there with their brother guest service and their sister colleague engagement. That is what is front and center in a GM's job description and it is how they are additionally compensated. Guest service scores, employee engagement survey results, and the profits. The 1-2-3 of the hotel business.So, why don't more GMs jump into the middle of the financial machine and make the kind of splash that they typically do with service and engagement? I believe the answer is close by. They do not have the training and experience with the numbers and as such, they hesitate to challenge the financial person or processes. There are many things going on in the financial world and they are seemingly complicated, and who wants to go there anyway? It is accounting and numbers and mumbo-jumbo balance sheets and yucky stuff. So, most GMs just tune it all out. Sure, they get and read the P&L, they know what the score is after the game. But few will jump in front of the train and wrestle their department heads to the ground and create the kind of business that holds their direct reports responsible for their results. GMs seldom go there because they are unsure of what they do not know.The typical scenario when dealing with a department head, GM and controller goes something like this: The statements come out and the GM sees the expense spending and labor are out of control. They are over budget and forecast-- way ahead of last year--and why? She or he asks the controller for an explanation and they convincingly blame the department head who did not do their forecast and had little to do with the annual budget because they just do not care. The GM now has another conversation with the department head and they put the blame squarely on the controller and his staff who are certainly inept because half the crap in their accounts is old, not right and subject to great suspicion.So, now what is the GM to do? She has two very different stories and whom should she believe? It seems every department is in the same boat. No one knows what is going on financially. They are seemingly flying by the seat of their pants. Good months only mean a bad one is around the next corner. Surprises are everywhere. Like mines in a field, they just go off when they should least expect them. With all this, the GM is convinced more than ever to stay away from the numbers. Focus instead on relationships with her direct reports and try to get everyone to play well together. This is usually the strategy because the GM has no idea where to begin to get her hotel finances in order. She did not sign up for this part of the game. And none one is telling her how to fix it.Meanwhile, the asset manager, owner and everyone else involved including the department heads and the controller are waiting for some leadership and someone to make sense of it all. The GM tries but really the effort is far short of being effective because they all think the numbers are different. They think there is a magical solution to all the infighting and confusion around who is accountable. They believe the solution lies outside of their scope. Can't someone just fix this mess?Back to the hero of this storyI met our hero rather early in my career when I was an assistant controller in a 500-room full-service hotel. I had been on the job for less than a year and my boss announced that he was taking the month of August off and I would be responsible for putting together the first full draft of next year's budget. This meant a few things, but the biggest thing I feared was having to talk to our GM. Prior to this my exposure to him was very limited and he had a reputation for being a tough cookie, to say the least.As the month went by I set about preparing the budget and the GM called me to his office. He outlined to me how each manager would present their expenses and payroll and how he would be "approving" any and all budget submissions before I did anything with their numbers. Interesting and somewhat surprising. But, then again, who was I to say otherwise--I was a super green rookie.One by one the managers had their appointments with the GM and I rode shotgun. He had instructed me to send each one their part of the four-year statement wherein four columns you could see the annual total for each line of expense and payroll. He then instructed his managers to prepare their expenses for the budget and to have a list of items for each account. No approval would be given on a cost per room occupied or cost per cover or a percentage of revenue basis. He insisted on the detail and he made each one of his managers responsible for getting their facts together. I have never seen so many people in accounts payable, sifting through files and invoices. The same for payroll. He set the standard.Each manager needed:An approved staffing guide for the budgetA clean list of salaried positions for the fixed payrollA formula for each employee in the variable positions that equated in total to hours per month on a per room occupied or per cover basis for each payroll classification equaling the best year-over-year or improved productivity compared to the four-year reportThe meetings were telling. Several managers were shown the door and were told the information they had was either incomplete or it had too many dollars. He simply looked at the information and asked what was in the expense line, comparing the four-year summary for each line and the departmental total. The same with payroll and the line-by-line productivity. Not rocket science but he sure had his managers in line. Several managers made return visits to re-present their numbers until they got it right and had his approval. What came to me to be added to the budget model was already approved.I quickly changed my opinion of this man from one of distrust and fear to one of respect and admiration. This guy knew how to manage his team. He was fair and objective and if you had good reasons for increases he listened and, more than anything else, he asked good questions. I just sat there and took it all in, a great lesson on management, organization, and budgeting. I will never forget what he taught me that August budget season. In that month I learned more about inner workings of each department in the hotel than I did in the previous five years, and so did he. That is what a good budget process will teach you.Many of his managers would come to see me after their meetings, to whine about their budget ordeal with the GM, and I would listen and commiserate. After they all "passed mustard" with the boss, the level of their knowledge and engagement around their numbers went through the roof. They had to know what was in their accounts and payroll and the boss used the budget season to get them all in shape. From this exercise, he took the review process to another level. Every month in the following year he would do the same one-on-one review of their departmental monthly financial results. This guy was on top of his business.Back to budget seasonThe following month my boss returned, and I was somewhat sad that he did. I was having a lot of fun with the budget and the GM. Two weeks later and it was time to go to a nearby city to present the budget to the corporate team including the company's CEO and a long cast of other characters. This would be the GM and my boss doing the presenting or, as we like to call it, the dog and pony show. To my complete surprise, my boss came into my office a couple of days before the scheduled review with corporate and said, "The GM wants you to go with him to present, you did the work and he wants you there with him." Wow! Was I in shock.Two days later I was on a helicopter with GM and off to the presentation. Here I was, the green rookie assistant controller, helping to present my hotel's budget to the corporate people. My GM did most of the talking. I do not remember saying much. He did take a moment when we were done and the budget was approved to tell the corporate squad what a great job I had done in the absence of my boss in putting the budget together. It was a great moment for me and my young career.I can honestly say that I have not worked with a GM since who had as much interest or backbone when it came to the numbers. GMs leave it up to the controller to try and sort out the wants and BS from department managers. This causes a lot of wasted time and effort. Usually, the managers have rose-colored glasses when it comes to budgeting. They think budget time should right all the wrongs and they add copious amounts of payroll and expenses. This then gets flushed out with budget consolidations and reviews, but what happens, as a result, is people waste an inordinate amount of time and they typically get discouraged and feel put upon because they do not get what they want in their budgets. All of this is nonproductive work. In as many times that I have prepared budgets, the only one in my opinion who got it right was that GM. He took the time to organize his department heads and he used the budget process to educate them, himself and me on what was going down in each area of his hotel. That, my friend, is how it should be. It's not magic but the results are magical.I vividly remember my boss telling me the budget is the GM's yardstick. It is his deal to get his managers to come to the table with what they need to run their departments. It is also his deal to make sure they understand what they have for payroll and expenses to operate their department. Equally as important is what they do not have to play with.Most GMs do not use their yardstick. Why? They think the financial piece is something else. Some weird concoction of computers, numbers, all things outside of them. But it is not. It is the same as the other pillars. They just need to take an interest and work it like he did.The moral of the storyThe GM did not know squat about accounting. He did not know the difference between a debit or a credit. All he needed was a keen interest in knowing that his department heads had their financial stick together.Simple and incredibly effective.For a complimentary copy of my guidebook on creating a finically engaged team in your hotel head over to my website, www.hotelfinancialcoach.com and don't forget to email me david@hotelfinancialcoach.com for some of my free spreadsheets.Give the coach a call and let's get going!

How Caring For Your Staff Can Get Them More Engaged

Media Gurus ·25 May 2018
Just like every other business organization, it is essential for hotel management to truly care about their staff in order for them to be as engaged, productive, and as happy as they can be. Happiness in the workplace is important because a happy employee will go to greater lengths in order to accomplish their tasks and satisfy their managers.What is important for you to know is that, while there are certain optional things that you can implement into the way that you deal with your staff, there are also obligations, such as a clear contract, health insurance, fair treatment, and so on.Think of it like this - if you don't provide your staff with what they require, you will have a group of unsatisfied employees who don't like the job that they are doing, and therefore have no real reason to be motivated besides earning for a living. This is why you must show that you care for them, and encourage, stimulate, and reward them properly.Fair treatmentEvery single employee working in your hotel needs to be treated fairly and no different from anyone else. The Equal Pay Act says that both women and men doing the same job must also have the same salary.Also, it is strictly against the law to discriminate disabled workers in any way. They must have the same opportunity for selection, testing, and getting hired as anyone else. Furthermore, in their case, you have to provide them with the right job accommodations so that they can do their best according to their abilities. The same goes for treating them in terms of benefits and promotion.Support and rewardsIf you check in with your employees constantly and offer them advice on how they can improve what they are doing, they will feel that you care for them, and therefore rely on you to help them when they are in trouble, instead of having the impression that they are on their own. It is also a great idea to hold regular training so that you reassure them that they are actually progressing with their job and skills.Furthermore, every employ enjoys being recognized for making a difference and doing something good for the company. So, keep them up to date with how your business is panning out and celebrate when certain business plans achieve success. Acknowledge those who have done an exceedingly good job, and reward them properly for it. That way you will make them a lot more motivated, and generally improve their morale.A proper payThe federal law says that every employee that works in your hotel needs to be paid at least the minimum wage. Still, you should know that this law has its exceptions. This is the case, for example, with those that aren't subject to such a treatment for certain reasons.Every employee that isn't categorized as exempt needs to be paid for their overtime in the amount of what is known as time and a half of what their salary per hour is. This accounts for those who have worked more than 40 hours during their work week. As for the exempt employees, they aren't entitled to overtime pay, but you should compensate them for their overtime hours.A safe environment to work inIt is essential for every hotel manager to ensure the safety and wellness of their employees. Therefore, you must make sure that your hotel is not only in pristine condition for the guests but also for the staff. Furthermore, it is important that you inform and train everyone about safety and health measures. You can also pick a proficient employee and assign them to the job of being the Safety Officer. Also, if there is any misconduct within your organization, like, for example, bullying, you as a manager need to take care of it and root it out for good.You must also know all there is to know about the National Disability Insurance Scheme. Professionals and Provider Rego underline the importance of your employees registering for an NDIS provider, in order to get the services that they need.In the end, it goes without saying that you need to allow everyone in your hotel's staff a reasonable break time, and the right to go to the bathroom when they have to.If you properly treat, motivate, and reward your staff, then you will build an engaged workforce which will do their jobs the best they can, and keep you and your hotel guests satisfied. Make sure that you regularly check in on how your employees are doing, offer them advice, and even come up with programs that can help them improve. A proper salary is something that goes without saying, and every reward an employee gets will make them more loyal and dedicated to your business.

A partial explanation for millennial behavior

hotelnewsnow.com Featured Articles·25 May 2018
I was born in 1985, smack dab in the middle of the decade. I graduated from college and entered the job market—in journalism, no less—in the spring of 2008, just in time to watch things start crashing down around me. The housing crisis, banking crisis, job crisis—the overall recession itself—had a profound impact on me, influencing how I would act and think, just like everyone else in my generation. I hear a lot of things about the millennial generation, some good and some bad. I often hear about how entitled we all are. I take that with some grain of salt. Every generation feels entitled to different things at different points in their lives based on what they’ve lived through. For one thing, I know many members of my generation felt entitled to a college education. We had been told by older generations that getting a college degree was the most important thing in order to have good, well-paying job. We listened. According to a 2016 study by the Pew Research Center, young employees were more likely than ever to have a college degree. Forty percent of employed 25- to 29-year-olds had at least a bachelor’s degree in 2016, compared to 32% of Gen Xers in 2000, 26% of baby boomers in 1985 and 16% of the silent generation in 1964.
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Four Key Metrics for Evaluating Event Marketing Performance

MarketingProfs·Requires Registration ·24 May 2018
Return on investment (ROI) is, at best, a misleading metric for evaluating event-marketing performance.

Hospitality Financial Leadership - The Three Dimensions of Delegation

The Hotel Financial Coach ·22 May 2018
Delegation has three dimensions that are powerful tools. Delegation is also quite often misunderstood. In this article I am going to explain my thoughts on how to use delegation to be more productive, to grow your own abilities and to help you see the way forward using delegation to develop others.First off let's examine what delegation is all about and clear up some misunderstandings. I for one was not a fan of being delegated to early in my career and I did not understand how to use it properly. I thought I was being "put upon" by being delegated to. It was not until I had my first post as an assistant controller that I started to see delegation in a different light. I vividly remember my boss coming into my office to give me yet another assignment that previously was his task. I had been in this very new and challenging role for about six months. It felt like most days I was drowning. The work just kept coming. Yet again he was giving me a report to put together that needed to be sent to corporate by the next Tuesday. That was it--the straw that broke the camel's back--so to speak."Why do I have to do another one of your chores?" I asked, somewhat frustrated, to put it mildly."Listen, David, I get to decide who is ready for more assignments around here and if you're half as smart as I think you are, you will do the same!"Wow, that hit me like a ton of bricks. My initial reaction was: what a conceited and shallow attempt to manipulate me by dumping his work on my plate. This was yet again his MO and, to boot, he was even doggedly proud of it. This envelope hit me hard. There was no way I was going to be able to swim with this crap piling up and a never-ending supply of new bunk to deal with. I worked late that evening and, on my walk home, I was recanting the episode with my boss and had an epiphany! It flew at me out of the night sky."If you are half as smart as I think you are, you will do the same."What exactly did that mean? How was I going to do the same? What was the real message inside the envelope? I thought long and hard about this and the following day I decided to get some clarity.I went to see my boss and asked him to tell me what I should be doing with delegation in my role. He smiled and said, "I was wondering how long it would take for you to wake up."He explained his view of the hotel finance office work world. It went like this: The work never stops coming. The assignments from corporate, the owners and the GM are not going away, in fact, they are going to get more and more frequent. That is just the way it is. To combat that it is our job to ensure these assignments are dealt with properly and to do that we need to take the work we have, the work we know how to do and delegate it to others. He said, and I will never forget these words, "If you know how to do something, it is time to give it up and teach someone else how to do it.""But how?" I asked, "Everyone is so busy.""By finding out what people want and helping them get it," he said. This sounded like a con if there ever was one, I thought. Then he explained that people all want to grow and have greater responsibility and move ahead.That is what we constantly need to be looking for and developing in our teams--an attitude of learning and progression. If we assume people are at their limits, then we just shut down the machine. Our job and quite frankly everyone's job is to teach and develop, and the fuel for this growth is the work we do. Once he explained it to me that way I began to see what he meant. Could I learn to do the same?First break-through as developerThe following day I sat down with our credit manager who was relativity new and green. I asked her what her goal was in the next two years. She said quite clearly to get out of the credit roll and on a path to be an accountant and eventually Controller. I was blown away by what came next. I offered to help her get there by showing her how to do some journals and reconciliations. I told her that it would be an additional workload, but I could also help her with the development of her credit and collections assistant who was chomping at the bit to become the credit manager. It seemed like someone just changed the music in our office and it now had a fresh and uplifting beat. These development exercises continued, and it was not long before I could see a much stronger and meaningful team developing.I know what some of you are thinking and I want to dispel that right now. You think that some or most of your colleagues are maxed out and on top of that they do not want to move ahead. They are happy just where they are or maybe they are even blockers. This thinking will get you nowhere fast. It is victim thinking and you need to turn it around to owning it and finding a way to lead that means everyone is a development opportunity. People naturally want to make a difference. They just need to see this and it is your job to create this environment, to have those heartfelt conversations and always be creating.The work we do is the fuel for development. When the work is properly positioned it takes on a whole new light. Think back if you will to your own development. Who helped you? Who is that individual that took you under his or her wing? I am willing to bet you that you would move heaven and earth for them. This is the kind of relationship you want to be constantly developing in your teams.This is the first dimension of delegation. Be that mentor, be that trusted guide.The second dimension of delegation is your growth. With an evolutionary plan underneath you, the path is being cleared for you to take on newer and bigger assignments. The people in your organization will see this and your career will be supercharged because you have demonstrated your ability to lead and expand.The third dimension is the most exciting. What I have always learned and seen in the development and delegation of others is what I call one step closer. People always surprise me, and this translates into creating new and innovative ways to do things. A fresh set of eyes and an engaged mind lead to progress. A great example was that credit manager who was a few years younger than me and more than just a little comfortable with macros. She automated several of the journals and created a calendar tab process for the reconciliations. Both processes were her doing and they saved considerable time. This is the by-product of learning and development--new and continuous innovation."Delegation is giving others the opportunity to participate in the story. If you have a good story, people will line up to get involved - to play a part in the story." - Eric PhillipsFor a complimentary copy of my guidebook on creating a finically engaged team in your hotel head over to my website, www.hotelfinancialcoach.com and don't forget to email me david@hotelfinancialcoach.com for some of my free spreadsheets.
Article by Steven Ferry

Auditing the Auditors, Part I of III

International Institute Of Modern Butlers ·22 May 2018
Don Quixote tilted his lance at windmills: we tilt ours at service standards that do not meet expectations, which is why I am spending a perfectly beautiful Florida spring Sunday inside, banging away on the keyboard when sensible people are beaching, sailing, golfing, etc.Why?We tried unsuccessfully on several occasions over the years to give independent QA providers, standards for the butler service being offered by (463) luxury hotels around the world so they could incorporate those standards into their own and help raise butler-service levels in the hospitality industry in a way that our small organization could not, on its own, achieve.All to no avail, but we learned as the years rolled on: Many five-star properties asked us to conduct mystery guest assessments of their butlers, and some even of their whole properties. In doing so, we were asked to assess against internal hotel/chain standards, as well as those of other QA providers. Finding they fell short in various aspects, we were compelled to create our own standards:1) For the two glaring omissions in QA standards: the world of the butler, as mentioned above, and EQ (emotional engagement)--of which more later;and2) Adjusting standards to move away from requirements that forced hotels into actions and behaviours that were robotic and inappropriate for the property. Imagine, while rooming a guest, having to point to a hairdryer in plain sight and say, "This is your hairdryer!" Yet that was just one required standard that hotels were being penalized for overlooking.This quixotic effort to reform QA bumbled along for several years until I met a kindred spirit: Jochen Ehrhardt of TRUE 5 STARS, who single handedly has been engaged in a similar but more fruitful path: assessing the top 3,000 luxury hotels in the world, 1,200 of which he has visited personally, and only 1,500 of which qualify for featuring on his web site."TRUE 5 STARS is completely independent and unbiased," Jochen pointed out once, "Its Quality Assurance Audit standards are the most detailed and demanding in the industry, while reflecting reality better because we constantly adapt to the latest market developments. Hotels typically score 15% lower compared to the feel-good QA audits of the larger QA providers, because standards cannot be raised if they are not set higher, as befits true five-star properties and the expectations of their guests."Even though only a small percentage of hotels around the world provide butler service of one stripe or another, Jochen immediately saw the need for standards for butlers, too, and happily incorporated ours into TRUE 5 STARS'. One small victory!Thereafter, many late nights were spent discussing standards in hospitality and what to do about them. Being German and English, albeit from different generations, we approached the whole subject logically. We assumed as a starting point, that standards were necessary to...maintain standards! Some individuals will say 'Throw all rules away, be spontaneous and do whatever makes you feel good, etc.," and we end up with people who cannot do the actions for which they are being trained and paid for, or which are expected by their customers/clients/patients/fellow citizens. Think Concordia, Pizzagate or any number of the real or imagined, large or small departures from what we would consider to be viable behaviours and outcomes. With standards, we know we will not have melamine in our chocolate and baby formula, Roundup in our stomachs, and that when we stay at a hotel or resort, we will enjoy that stay.So then the question was, were owners and hospitality management companies happy with the standards being set and managed by leading, independent QA companies? The fact that quite a few chains run their own QA programs would indicate that they feel they can do a better job internally in some way. A survey of GMs in luxury hotels around the world told the story where the rubber meets the road, or perhaps more germanely, where the guests meet the beds.Responses varied on perceived pros and cons, but one GM nailed the issue with, "Independent QA audits are good but a big revamp needs to be done because staff attitude is changing, as well guest expectations."And there is the crux of the matter--coming up with standards is no easy feat: As many standards can exist as there are people to dream them, and the difficulty becomes settling, generally via a committee of interested parties, on those standards by which guests will feel well-served. This varies by evolving culture and sub-cultures, generations and gender, so how does one put order into such a confusion or series of moving targets?The answer is simple, actually: each property has a purpose or mission statement that is trumpeted by its branding and marketing, and supported by its location, structures, decor, ambiance, facilities, activities for guests to engage in, and service style--and key geographical and consumer markets to which it reaches out.This is not new news.So why is it such a brain twister to come up with standards that reflect that individual property's or chain's manifestation of these elements that should add up to that purpose or goal being achieved--and thus happy guests--and furthermore, to update the standards from time to time?Herein lies the contradiction with one-size-fits-all standards: the expectation that everyone fit into a 40-inch/100 cm waistband pair of trousers/pants/jeans.For instance, what the Silent Generation expected from their hotel experience would bore the hind legs off a millennial; and yet many of the standards offered currently suit the mentality and standards of the Silent Generation and perhaps the Baby Boomers, too. As a Baby Boomer myself, who espoused environmental responsibility decades before it was fashionable, for instance, I am disconcerted by the ubiquitous and health-damaging EMF pollution existing in the very best of hotels and resorts worldwide today, even those in pristine locations.Why?Our bodies rely on very delicate electrical systems to run properly, and these are blasted to kingdom come by wifi and cell phone reception, much in demand by green-conscious millennials. Not to sidetrack down this road of contention, but it does serve to illustrate that the setting of standards that reflect current needs is more-than tricky: for while a millennial would be happy as an iPad in wifi exploring the virtual world, older codgers like myself would prefer to be in a tranquil setting enjoying the wealth of the moment afforded by the beauty of the real world consciously and proudly created by each hotel and resort.This lack of customized standards that fit the purpose and markets of each property is the source of the frustration felt by more than a few GMs with the results of QA audits; and any failure to really satisfy or wow guests. It is not all bad, by any means, as the pros obviously outweigh the cons--or QA programs would be a footnote in the history books--but it seems QA could use some QC!Other issues raised by GMs include concerns about cross purposes or compromised interests: one company providing audits which, when passed, permit hotels and resorts to become paying members of its sister company--the problem being that the incentive exists to lower standards so as to increase membership.Another issue that comes up is the constant effort to identify the guests who may be auditors--one hotel chain even posting in their staff areas, a rogue's gallery of known-inspector mug-shots. This "spot the inspector" game is a distraction from the real game of servicing guests, and an effort to paint a false picture for any auditor who has been outed. But who can blame the staff, from the GM on down, when bonuses, accolades, and promotion are pegged to the results of randomly executed and too-brief/not-comprehensive snapshot audits; which sometimes suffer from a lack of consistency between inspectors and a lack of fairness in presenting scenarios; and invariably lack clarifying information where boxes are ticked as either "Satisfy" or "Insufficient" judgments.The GMs found benchmarking against their (local) competitors to be of most value with outside audits, but only one-in-three felt benchmarking actually resulted in improved performance. Placing the focus on besting the competition and improving the bottom line is like having ones attention riveted on the scoreboard instead of the game in progress--the better approach being to focus on setting and implementing standards that actually improve the guest experience. Otherwise, one risks becoming irrelevant, especially if the standards are off-base to start with; and furthermore, if they are lowered in order to increase membership, or in the case of luxury hotels, if the standards are written as lowest common denominators of service that can encompass three-star-and-up facilities.Equally important as an issue is the fact that most QA auditors and their organizations simply act as judges (and even jury and executioner, for some GMs); perhaps they provide some follow-on training which is apparently not held in much regard for its focus on hitting audit points and not addressing underlying issues that will actually change conditions. The relationship is not that of partner, therefore, but of judge (and marketer), neither of which quite provide the help that would prove of greatest benefit. Action programs, proper analysis and addressing of basic issues in training, resources, etc., and staying the course to guide improvement are how a partner might deliver value.EQ--One Big Missed OpportunityAnd finally, we come to the question of EQ, emotional engagement: All those GMs canvassed considered EQ to be the most important element in QA, expecting maybe 50-50 consideration with facilities/hardware. This harks back to the early days of QA, when Egon Roney, who published his first restaurant guide in the 1950's, subsequently carried on a thriving business rating hotels. His guide was probably the first to recognize that increasing facilities and services offered didn't necessarily equate to guest satisfaction. Roney's star rating was color-coded: Red stars for excellent service, black for acceptable, and white for below par service. A 5-star grand hotel in London might have black or even white stars, while a small country hotel with limited facilities was classified as a 2-star hotel, but because of the high level of personal service and consistent guest satisfaction, those two stars were red. Somewhere along the line, that focus on service quality was lost in QA programs--and as one ends up with what one pushes, hotels were nudged into focusing on material elements at the expense of live and solicitous service.One QA organization recently added a few token EQ standards to their facilities-centric assessment; these EQ standards have the same technical understanding, accuracy, and efficacy in improving EQ application in hospitality, as doctors had of how the body worked until the 17th Century. Following the theories of the ancient Egyptians and espoused by Galen, a Greek surgeon from the 2nd Century, they claimed for centuries that blood was produced by the liver and was one of the four liquids in the body, the balance of which determined an individual's mood and health. From which they came up with practices such as blood letting to cure pathologies. Dr. Harvey, a doctor in London during the 16th Century, confirmed that blood was pumped around the body by the heart and had nothing to do with one's "humors." It took a while for Dr. Harvey's observations to be viewed and accepted, the cry from the medical community being, "I would rather err (be mistaken) with Galen than proclaim the truth with Harvey."There is no reason that understanding and adopting the proper use of emotions should take so long: all it takes is acknowledging that maybe not everything there is to be known about emotions and emotional engagement, is already known! That just maybe, a Harvey-like breakthrough has already been made.A sadly misnamed "Emotional Quotient" might be better named "Emotional Quality," but it does little to define what is meant by this all-important skill of emotional engagement. Current more-advanced concepts of EQ include: the demonstration of genuine individual care & recognition; the delivery of "wow" moments and stepping above and beyond the expected to create unique moments that make a lasting impression; smiling; proper verbiage; anticipatory service--all of which only obliquely hint at emotions, and instead only reflecting the style of service for which superior service providers, such as butlers, are famous. As a result, the power of emotional engagement is not being harnessed in hospitality, even though its use is greatly desired.More advanced hoteliers see that Western-focused QA-concentration on facilities as opposed to solicitous service does not work in the East, but this is more of the same error: that emotional engagement is simply solicitous and genuine service, as opposed to being a whole new subject that puts hospitality into a whole new ball park of service excellence. One should be able to use emotions to make guests happier, a basic goal of hospitality.In Part II of this series, scheduled for August, we will examine the difficulties faced by hoteliers in evaluating quality/gauging how they are doing and therefore coming up with workable strategies to move forward--including assessing the value to management and guests alike, of report cards generated by QA audits for management versus the report cards being published broadly to potential guests on social media.First published in Hotel Business Review and reprinted with permission of the author
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Hospitality Financial Leadership: The Three Dimensions of Delegation

Hotel Online·21 May 2018
BDelegation has three dimensions that are powerful tools. Delegation is also quite often misunderstood. In this article I am going to explain my thoughts on how to use delegation to be more productive, to grow your own abilities and to help you see the way forward using delegation to develop others.

Simplifying the hotel industry in 2018

hotelnewsnow.com Featured Articles·18 May 2018
Marketing, operations and finance are three diverse yet comprehensive sectors of the hotel business, and should be primary focus areas for hoteliers this year. Why? Marketing has completely transformed the hotel industry. Today, we must thoroughly understand revenue management, distribution channel management, social media marketing, web marketing and myriad changes in guest preferences. Moving to operations, we have added a couple of twists like robotics, energy management and new laws particularly surrounding human resources. By and large, this is where the art of hospitality still shines, but a big addition is wellness of both guests and team members. Most owners view finance as the most important area. Finance is really a cyclical thing, notwithstanding accounting rules, new software and tight cost controls that have not changed. Hold, sell, build, buy—where, when and with what capital?
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Why teaching accounting in hotel school is a waste of time

eHotelier.com·15 May 2018
I have a dream. My dream is that the numbers – the numbers that so many managers agonize over in our industry – are just as accessible as guest service and employee engagement. Let me put this another way for more clarity: I want you and the other leaders and managers in your hotel to be just as comfortable dealing with the numbers as you are dealing with guests and colleagues.

Hospitality Financial Leadership - Is Teaching Hotel School Students About Accounting a Waste of Time?

The Hotel Financial Coach ·15 May 2018
I have a dream. My dream is that the numbers, the numbers that so many managers agonize over in our industry, are just as accessible as guest service and employee engagement. Let me put this another way for more clarity: I want you and the other leaders and managers in your hotel to be just as comfortable dealing with the numbers as you are dealing with guests and colleagues.You might be thinking that is a tall order. Well, I do not think so. I have seen many managers overcome their fear and confusion with the numbers. I also believe a big part of why the numbers scare so many people off is because we "seemingly" do not know how to teach them to our leaders. I also think that college and university hotel programs that teach accounting are a big part of the challenge.When we look at a college or university hotel management program, it invariably has an accounting for hospitality management course or a course by a similar name. Look inside these courses and you are likely to find all kinds of accounting stuff, from T accounts to trial balances to general ledgers, financial analysis, problem solving, cash flows, balance sheets and profit and loss statements. All of this is OK for a finance major but why are we teaching this to our hotel management students? Repeatedly I have heard from colleagues over the years just how much they hated accounting in hotel school. Over and over again I hear from leaders just how little they learned. Recently, I am hearing from schools too. They tell me just how poor the comments and ratings are for their hotel accounting courses.I remember just how confused and frustrated I was in both first and second year accounting when I attended hotel school. I do not think I learned one thing, at least I cannot remember if I did. It was always too far out there, too mumbo jumbo and, "Why are they doing this to me?" Accounting was like this water torture test we all had to endure--just get through it was our mantra.Well, no wonder no one likes the courses and it is not a surprise that they all complain. What gets taught in hotel school is exactly the wrong thing.Let me digress a littleI remember when I was taking Certified Management Accounting courses many moons ago. We had a law course. Business Law I believe it was called. And guess what? They did not have us prepare a case or defend a client. They did not even have us prepare any summations. They did not have us definitively answer any questions. What they did teach us were some principles and concepts that were in line with where we were at in relation to our other learning. It was not over our heads and when we were finished I had some basic understanding of business law concepts and still do today.When I cross the hall to the hospitality accounting class, the professors were trying to create mini accountants and this is the wrong approach. Do we honestly think that any more than .001 percent of these hospitality students will ever pursue a career in hotel accounting? If they did--like I did--they would need a rather lengthy list of other classes, courses, training, and experience.Young hotel students today will find their way into the industry and like most of us they will land in operations and a few short years later they will be a junior somebody in an operating department. Once this happens we throw schedules, purchase orders and whatever else we can find to throw at them. If they survive this we give them the forecast, budget, and commentary, not to mention all the other "special projects" or, as the job description states, all other duties as assigned. What our leaders need from school is a basic understanding of the business of hotels. What makes them tick financially and operationally--not finance and accounting courses.What students need are Financial Leadership SkillsSchools, please teach them the fundamental accounting equation, explore the basic accounting principles and then turn them on full speed to the business of hotels:Instruct them how to read and understand a hotel profit and loss statement and what constitutes a good one.Teach them about rooms market segmentation and what it all means for profitability and diversification.Baptize them in the world of food and beverage and why we produce statements for our outlets the way we do.Explore banquets and the engine of hotel F&B profit.Introduce them to the Uniform System of Accounts for the Lodging Industry (11th Edition) and why our entire industry uses this book.Stop along the way to examine real hotel ratios that people watch and the expense dictionary.Walk them through operating departments vs. non-operating departments.Tutor them in understanding RevPAR and STR dynamics.Turn them on to basic management and franchise agreement details.Delve into flow thru and labor productivity analysis.Expose them to EFTEs.Show them how to do a zero-based expense budget and forecast.Make them create a staffing guide where they differentiate between fixed and variable payroll.Critique real property commentaries and show them what owners are looking for.Introduce them to a Return on Investment model and CAP rates.I could fill the page with what they want to know and what would be really useful. But please stop trying to make them into mini accountants. This is entirely the wrong approach and a waste of time and energy. Let's start turning out students who have hospitality financial leadership skills!There is so much hotel business thinking that is crying out to be taught.Equip the leaders of tomorrow with industry business-savvy concepts and experiences.They will love it, they will remember it and--most importantly--when they are thrown to the lions they will have skills to fall back on.Try running your trial balance simulation when someone asks for next month's forecast. Good luck!

Corporate Governance: Why Independent Audit Committees Matter

EHL ·15 May 2018
Since 2000, the audit committee has been put forward as an effective mechanism to limit fraudulent financial reporting. Following financial scandals such as Enron and WorldCom, the US Congress issued the Sarbanes-Oxley Act (SOX) in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.Sarbanes-Oxley requires publicly traded companies to have:the CEO and CFO certifying the financial statements;an effective internal control system put in place and maintained;an audit committee in charge of the oversight of the financial reporting process and of the engagement of the external auditor. The audit committee must be wholly composed of independent members sitting on the board of directors.In Europe, the audit committee's composition rule is different. The European Commission (EC) mandated in 2006 that each 'public-interest entity' should have an audit committee with at least one independent member. In 2014, the EC amended this regulation by mandating companies should be at least 50 percent comprised of independent members.In a recent article in the Journal of Accounting Literature, we examine whether the percentage of independent members sitting on audit committees, in different institutional settings, has an impact on the credibility of earnings.For this study, we examined a large sample of 7,656 earnings announcements by 1,420 listed companies in 15 European countries during the period 2006-2014.To measure the strength of the institutional setting, we used an index developed by Brown et al. (2014), which - in our view - is able to explain differences in earnings management across countries.We also used the World Bank's Governance Indicators to control for potential limitations of the index.Our key findings were as follows:Stock market reaction to earnings announcements is greater when firms have more independent members sitting on the audit committee;The percentage of independent members sitting on the audit committee very significantly affects investors' reaction in countries with weaker legal protection of shareholders' interests (i.e. weak institutional setting), but not in the case of stronger legal protection.Thus, our results suggest that the institutional setting does have an impact on the effectiveness of the audit committee. In weak institutional contexts, managers have more incentives to distort financial information to acquire private benefits, and investors may therefore rely on the independence of the audit committee to assess the credibility of earnings.Overall, by highlighting the impact of the institutional context on the independence of the audit committee, our results are particularly interesting for European regulators. They should also be interesting for boards of directors, which are in charge of the oversight of the financial reporting.As for the hospitality industry in Europe, we would encourage boards of listed hotel firms to opt for fully independent audit committees.Access the full study:Audit committees' independence and the information content of earnings announcements in Western Europe. Journal of Accounting Literature. Poretti, C., Schatt, A., & Bruynseels, L. (2018).

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