The Hotel Financial Coach · 7 Sep
Bloody is a great word. It's English and I'm Canadian so that's close enough and I'm adopting it for this piece. The word is so descriptive, and it immediately conjures up images of battle and of great suffering. Much the same as the annual carnage we refer to as budget season in the hotel business. It's the epic contest between line managers and executives, hotel leadership teams and the brand and hotels and their owners.
The Hotel Financial Coach · 31 Aug
Regarding both the financial leader and the operationally managers roles: On the eve of starting my financial leadership course for the third year with Royal Roads University, I realized that most people have it somewhat wrong when it comes to how they think about the financials inside the hotel business. It occurred to me that most people think that a mechanic is the only person who can drive a car.
The Hotel Financial Coach · 24 Aug
Applies to financial leaders' and operational managers' roles: On the eve of starting my financial leadership course for the third year with Royal Roads University it occurs to me that most people have it somewhat wrong when it comes to how they think about the financials inside the hotel business.
The Hotel Financial Coach · 3 Aug
The hotel business is a retail business and in order to stay on top of your business you must fully and completely balance your daily revenues and settlements. Every day we begin anew and every day is a story unto itself when it comes to the revenues and settlements. I may sound like I am repeating "revenues and settlements," but it cannot be emphasized enough.
The Hotel Financial Coach · 20 Jul
Internal controls in your hotel are critical and they need to be designed to keep your assets safe and your money where it belongs - with you and not in someone else's pockets. I have seen this go wrong way too many times and I also talk to many hoteliers that are oblivious to this level of control or they just don't see the importance of it.
The Hotel Financial Coach · 13 Jul
In the hotel business, we have three equal pillars. The guest, the colleague and the money. We need to realize that the third pillar—the money, the owner, the P&L, the paperwork, whatever you want to call it—needs a proper voice. The right voice, a voice that speaks to the leadership and the highest purpose that a cornerstone of our business warrants. Far too often the voice of the money is scary stingy or downright mean. If the paper is going to have a voice, we want to ensure it's the proper one. The voice that will get and give equity to all our constituents.
The Hotel Financial Coach · 15 Jun
In the business world protecting your assets is a critical strategy. Without it you are open to "things" happening that can cost you a fortune. I was trained with the concept of the separation of duties as a foundation so in some respects I take it that everyone else has the same perspective. Recently I worked with a client that showed me just how far things can go awry when you put your trust in someone and you fail to have the proper separation and oversight.
The Hotel Financial Coach · 25 May
Inside of the hotel company I worked for there has always been a constant movement to increase efficiency, especially inside the financial function. Not surprising, right? That’s what all businesses have done and continue to do, to evolve and ultimately outsource or eliminate seemingly needless, value lacking work. I was heavily involved in such a project that took me all the way to England.
The Hotel Financial Coach · 4 May
Having been around awhile I have seen the changes that have come as a result of major global events. The starkest example is our pre- and post-911 world. It showed us that the idea of getting on an airplane means we need to prove we do not have any threatening objects with us, like guns, knives and explosives and we need to prove we are who we say we are. We even must prove we're not a threat and that we're on the right security list.
The Hotel Financial Coach · 27 Apr
In the hotel business we need to be relevant and on top of the key issues that make our venture successful and ultimately sustainable in the long run. This piece is about how we can differentiate between expenses and investments to make sure we recognize the difference and make the best decisions for the ongoing health of our enterprise. Especially now that we are sidelined and looking for a new normal.
The Hotel Financial Coach · 20 Apr
The simple and only answer is yes, you should. Without these tools, you are flying in the dark and sooner rather than later you are going to run into a mountain. In my opinion, if you are running your hotel business without this and you think that is okay then you are simply irresponsible. If you are thinking it is too complicated or only for the big kids, well, you are wrong again and this recap will be an eye-opener for you.
The Hotel Financial Coach · 14 Apr
Over the years I have seen a lot of messes in my career. Not only the ones that catch your eye because of the clutter and disorganization you see in the back spaces of your hotel but I'm talking about a mess on the balance sheet.
The Hotel Financial Coach · 30 Mar
When people hear the term food cost, they generally think of the simple calculation of cost / selling price = food cost %. This calculation does little more than give you a percentage. Understanding and controlling food cost is much more complex.
The Hotel Financial Coach · 23 Mar
Controlling the beverage cost is a big deal in hotels. People like to drink and that's great for the bar, but you have to remember the people serving your drinks need a tight set of checks and balances or else they will help themselves to your supplies. It's just human nature to mess around with the stuff at your fingertips all day long. There is a certain sense of entitlement as well because the wages are small, and people rely on tips. Bigger portions or the odd free one for a client can make a big difference in the tips left behind.
The Hotel Financial Coach · 16 Mar
In the business world protecting your assets is a critical strategy. Without it you are open to "things" happening that can cost you a fortune. I was trained with the concept of separation of duties as a foundation so in some respects I take it that everyone else has the same perspective.
The Hotel Financial Coach · 4 Mar
A lot has been said about the flue outbreak and the devastating effects it will have on the travel and hotel industry. But what can you do about it? The old saying, "you can't save your way to prosperity" still holds true, but you can be the best of class when it comes to being the least effected. Occupancy and rates are going to fall, they always do. The question is, where will the market go and how can we keep our REVPAR index. I'll leave that piece for the revenue and marketing pundits.
The Hotel Financial Coach · 24 Feb
An old GM of mine was fond of this statement. He usually came at it from the other end of this by saying, "Any monkey could fill this place when the phones are ringing." And I think he is right.
The Hotel Financial Coach · 2 Dec
Being a branded or franchised hotel is an expensive endeavor. Especially when you consider the average agreement is 20 years in duration and you're on the hook for the fees outlined in your agreement plus anything else the management company throws at you.
The Hotel Financial Coach · 11 Nov
Food cost is a never-ending battle in a war that does not end. You can never take your foot off the gas, if you do you will slow down. When you slow down in the food cost world it is costly. Back in the day I cut my teeth as a receiver, F&B cost control clerk and ultimately an F&B cost controller.
The Hotel Financial Coach · 28 Oct
I know a lot of people have some confusion and a slight frustration when it comes to the financial information that's available in a hotel and the way it's presented.
The Hotel Financial Coach · 21 Oct
This is a story about a recent client who hired me to coach her. She was the director of rooms in a large hotel in Illinois and was told that it was possible for her to be promoted to a general manager role in the future in a smaller hotel with the same brand. She was excited and nervous. Excited because of the prospect of becoming a GM which she had longed for and worked hard for. Nervous because she knew, as did her whispering boss who said, "You better brush up on your numbers."
The Hotel Financial Coach · 14 Oct
The Stow has always been a great hotel. Sitting high on the hill overlooking the river its bones and lines are completely classic. The 505 rooms all have a view of something great. For decades, the hotel had been the home away from home for the elite of the world. Rock stars, heads of state, actors, CEOs, you name it and they came, stayed and came back. Managing the hotel was a dream job. I never thought I would have the opportunity to be the general manager of such a fine lady. We call them ladies because they are gentle and beautiful and just a little complicated.
The Hotel Financial Coach · 7 Oct
Just like your auto mechanic checks your car's health you can completely review your hotel's financial performance and get a clear reading on as many as 21 different flow thru performance points. Further to that you can even see what you need to do in most cases to correct the results! It's what I call super revealing. And, the best point is you don't need anyone's help to do it because I'm going to give you the list! Flow thru is an essential concept to understand. If you are new to the idea read, my blog on flow first. https://hotelfinancialcoach.com/flow-through-understanding-how-it-works-and-how-to-include-flow-thru-in-your-financial-statements/Checking performance is a step-by-step exercise and we start at the most vital points. Failure to do this analysis is a costly error. By being diligent we can identify the areas that are affecting our financial health and that's the first step in fixing the problem.In this example the flow is measured to the same time period, year-to-date this year to year-to-date last year.
The Hotel Financial Coach · 30 Sep
What is really important to realize is the food cost calculation in your hotel will always come back to the cost of goods formula. Any attempt to track and individualize the outlet food cost that I have ever seen is a big waste of time. It is a waste of time because it always comes back to the fact that the food cost is calculated by adding the opening inventory to the purchases and then subtracting the closing inventory - as well as any legitimate credits at month end - to calculate the food cost. This is never done in hotels by outlet simply because it is completely inefficient to do so.
The Hotel Financial Coach · 16 Sep
In our business it is no secret that labor is our single biggest expense. Last year the average hotel in North America, according to data collected from thousands of medium- and full-service hotels by a popular industry partner, was right around 50 percent of total revenues. What is a secret is how most hotels manage their largest cost. In this piece I am going to talk about creating and using a staffing formula for all scheduled positions. In addition, I will talk about the best practices as it relates to having and using staffing guides. First of all, let’s define what a staffing guide is and what constitutes a staffing formula. The two are separate but also come together when used properly. Allow me to explain.
The Hotel Financial Coach · 26 Aug
When it comes to payroll we are not just paying the cash wages. We have additional dollars that are substantial in the form of supplemental costs and employee benefits.So, what we want to have are three areas we can see and analyze in our financial statements: