Enhancing collaboration and communication across all departments to reposition your hotel asset.
Ever wonder where the expression “that is like trying to turn the Queen Mary” comes from? It is actually a UK-based metaphor and comes from the fact that large ocean liner vessels, like the Queen Mary, can take up to 10 nautical miles to slow down enough before they can initiate a turn. How many of us find ourselves in situations like this as we try to turn a hotel asset position around?
One of the more challenging assignments in my career was working for a big box hotel in downtown Toronto. This particular hotel was on a wayward course and needed to set a new direction. The owners made it very clear that the current state was not sustainable and if the course continued, it would spell certain failure.
I was part of a new management team brought in to turn this “ship” around. It was very much like trying to turn the Queen Mary. There were certain fundamental changes that needed to occur (slowing the vessel), including a change in perspective, focused goals, and strong collaboration. There were many well-intentioned teams within the hotel, but they worked in their own silos and inadvertently created several conflicts, which ultimately formed a condition of gross underperformance. Simply put, they were not achieving asset objectives. It was not until everyone fully understood the enterprise goal, comprehended their role within the greater context of the organization, were willing to align themselves to that end, and had a new set of aligned goals that we were able to begin to change course.
As you reflect on your hotel asset or portfolio, ask yourself these questions:
1. What are you trying to achieve? Do you fully understand what your owners are trying to achieve?
2. How well can you articulate the enterprise objectives to others?
3. How aligned are these goals with your other disciplines in your organization?
4. Do you have a system in place to ensure that individual department goals truly align with the enterprise goal?
5. Is your organization set up to be transparent about their specific goals and effectively communicate its successes and failures.
As a consultant, I often encounter hotel teams who struggle to identify their asset objective. An asset objective is a critical component of any hotel's success strategy, but it's surprising how many teams are unaware of it. When asked, they give generic answers such as "to make a profit" or "to drive NOI." However, understanding your hotel's asset objective is much more nuanced than that. It involves identifying whether it is a short-term, mid-term, or long-term hold. It encompasses understanding ROI cycles and expected market positions, to name a few. Without this understanding, it's challenging to create a comprehensive plan for the hotel's success. So, it's essential to take the time to identify your hotel's asset objective and create a strategy that aligns with it.
Departments that have opposing goals or a lack of awareness of what the enterprise is trying to achieve can often find themselves in conflict. A classic example, and one that I experienced recently, has to do with the age-long tug of war between sales revenue goals and revenue management RevPAR/profit goals. The subject property I worked with gave their director of sales the ability to book the entire hotel without the consultation of revenue management or GM. Furthermore, no displacement analysis was done on the impact of such a decision. This created a situation where the hotel fell far short of its full potential. By assigning the right goals and ensuring collaboration amongst disciplines this situation could have been avoided.
It is central for hotel teams to have a clear understanding of the asset objective and how it aligns with the enterprise objective. By doing so, they can focus on properly aligned key performance indicators and work towards achieving the desired outcome. When hotel teams are empowered to work towards a shared goal, they are more likely to achieve success and contribute to the overall success of the enterprise. To do so, it is recommended that hotel teams receive regular training and communication to ensure they are aligned with the asset and enterprise objectives.
Initiating the Turn...
Creating a hotel balanced scorecard is a great way to focus on four key areas: customer experience, customer acquisition, revenue optimization, and financial success.
By utilizing this framework, we can ensure that our efforts are concentrated on improving customer perspective, increasing revenue share, acquiring new customers, and optimizing our financial performance. We believe that this approach will help you achieve your long-term objectives and maintain your position as a leader in your respective market and increase overall asset value.
With the Hotel Balanced Scorecard, you will be able to track and measure progress in each of these areas and make data-driven decisions to continuously improve your performance. This tool will allow you to identify areas of strength and areas for improvement and will provide your teams with a framework for making strategic decisions that benefit the entire organization.
A Hotel Balanced Scorecard Strategy Actually Enhances Collaboration and Communication
It goes without saying the Hotel Balanced Scorecard will serve as a strategic management tool that will enable teams to measure and monitor their performance against key performance indicators (KPIs) that are aligned with our business objectives. This will help us to identify areas where your team is excelling and areas where they need to improve.
The Hotel Balanced Scorecard will also facilitate cross-functional collaboration by ensuring that all teams are working towards the same goals and have a shared understanding of our business objectives. By promoting collaboration and enhancing communication, leaders can ensure that their operations, sales, marketing, revenue management, and finance teams are all working towards the same targets and are aware of each other's progress. This also assumes, of course, that your organization has an environment where associates feel like they have a forum to communicate their successes and failures and are open to discuss strategies from others.
How to create your Hotel Balanced Scorecard
By following a few simple steps, you can develop a Hotel Balanced Scorecard that will effectively measure your organization's performance.
First and foremost, set your asset or portfolio objectives. When it comes to setting asset goals for your hotel, it is important to keep in mind that these goals can vary based on the objective at hand. This involves diving into the analytics to understand the true story behind your asset to identify your strengths and vulnerabilities.
Whether you are looking to increase profits, improve guest satisfaction, or simply maintain the status quo, your asset goals should be aligned with your objective. By understanding your objective and setting realistic and measurable goals, you can better track progress and make informed decisions about how to allocate resources and make improvements. So, take the time to assess your current situation and determine what your hotel asset goals should be based on your specific objectives.
Second, begin to create discipline objectives that line up with your asset objectives. All departments should have goals that they specifically can control and positively influence the asset objectives. It’s important that these goals do not create a conflict with another departmental goal. Make sure all disciplines have focused and balanced set up objectives that are realistic and achievable.
Finally, once all teams are updating the progress of their KPI’s on a regular basis and reporting on their successes and challenges, together your team can decide how to close the gap. Everyone should have visibility on all team goals so they can see how others are progressing.
The discipline of creating a Hotel Balanced Scorecard ultimately enhances camaraderie and a sense of collective success which will, in the end, set your “ship” on the path to success. It’s not always easy and can sometimes be frustrating finding the right combination of KPI’s, but the right mix will yield strong results.
I work with teams on building the right mix of goals that align with the shared vision of management and ownership and have found that it’s very rewarding for the team members to feel like they are working towards something that benefits everyone. This ultimately will set your hotel assets in a direction that enhances overall value.
To access a simple template with detailed instructions, feel free to click on the following link: