information . Analyzing current numbers instead of comparing them to monthly or yearly trends should be the foundation for current forecasting . Many hoteliers today are operating under the impression that the optimism of early 2023 is not translating to predictable trends in 2024 . Instead , updating your models and looking at smaller sample sizes is essential to increase accuracy . Any forecast farther than 90 days out is likely too ambitious , and accuracy must be preserved above all else .
Hotels should also revisit their expense projections multiple times throughout the year . Though the value of some products and services has normalized , inflation and price fluidity continue to surprise consumers and business owners . In many cases , this year ’ s budgets are already obsolete and it ’ s time to go back to the drawing board and set new expectations for the remainder of 2024 , focusing on fiscal sustainability and a reduction in operating overheads .
LESS IS MORE Quick quiz for hoteliers : How many managers and how many full-time employees are on your staff ? Many operators have too few hands on deck to manage operations , but others could be misusing resources in the wrong places . As a result , hoteliers often find themselves trying to achieve profitability despite a 70 % to 80 % allocation overhead on each of their guestrooms . This issue is eating at hospitality from both ends — hampering operations lacking workers and driving up costs to unsustainable levels in fully staffed businesses . Hoteliers are looking for ways to leverage technology and reduce the reliance on labor when managing redundant functions , not only as a cost-saving measure but also as a means to reduce stress and workload among hourly associates .
To help maintain control over their properties , hotel leaders must rethink and adjust the key performance indicators they consult . Operators should focus on growing profit per available room , driven by reduced fixed overhead costs , to stimulate revenue growth without adding to their team ’ s workload . The first thing hotels can do to improve operating costs in this area is to rethink the approach to scheduling and find ways to reduce missed shifts . Increasing reliability and lowering extraneous expenses goes a long way toward creating a consistent operating and guest experience and help keep a lid on last-minute decision-making .
The hospitality industry was designed to be personable ; it runs on communication . Managers and hotel leaders must be more available to their workers . When leaders find ways to eliminate layers in an organizational chart , they can create more direct relationships with senior leaders . As an industry , we must find more ways to connect the most experienced individuals on property with owners and line-level workers to transfer their experience , not just information . This is the best available method for catching trends as they emerge , while rebuilding hospitality ’ s base on skilled workers , reducing long-term labor costs .
CHANGE IS CONSTANT Many in the hotel industry are looking at the trends impacting hospitality , at how business travel is still in flux , and how leisure bookings have been more evenly spread across destinations and are still deciding to stay the course until a “ more favorable ” moment arises . The moment they are waiting for is likely never going to come . The industry is in a constant state of change , continually iterating and never returning to the past . The goal is to adapt to these new economic conditions and deliver the best possible guest experience , above all else .
To do this , hotels must avoid cutting anything that impacts the guest experience . After all , the concept of the annual meeting may be gone , but events still thrive in smaller bites . Hospitality sales departments need to know these customers more personally and court them more actively . Salespeople who have taken this approach have seen an increase in banquet and meeting rentals , as well as higher engagement scores . Most importantly , closer interactions between sales and travelers help keep hotels informed on what trends are driving bookings and how to adjust their strategy in response .
Lastly , controlling overheads involves reframing the concept of productivity . From moment to moment , hotel workers are among the most productive workers in any industry . However , hotels as a business often struggle to set realistic goals beyond identifying the next revenue plateau . Workers enjoy being part of something that creates opportunities for others or helps others enjoy their lives in new ways . If operators can identify these drivers and reframe them as clear goals , they may be surprised to find how effective hotel workers are at hitting their mark .
These represent just a few ways the hotel industry is losing its obsession with unfocused forecasting in favor of growing profit per available room . It starts and ends with people and is sustained on high-quality service and sold hospitality fundamentals . Most important : the willingness to adapt to the world as it is today .
Ted Darnall
May / June 2024 hotelsmag . com 69