Employer-Engagement: What does it mean for HLST? Working with Industry Research to Consultancy (informing practice) Thursday 6 th November, 2008 St Annes College, Oxford Peter Harris Professor of Accounting & Financial Management

Working with Industry Oxford Brookes University & Rezidor Hotel Group (a decade of collaboration) Peter Harris & Knut Kleiven

One of the fastest growing hotel groups Based in Europe - Middle East - Africa (45 countries) Corporate office: Brussels Operating some 287 hotels = 50,000 rooms (approx.) Results for year (approx.): Revenue 785m; GOP 291m; Profit after tax 46m The Company (at 31 Dec. 2007)

Consulting Designed business analyst in-company project (1999) Key development: Stockholm, company embraced marginal accounting construct (2001) Designed company-wide cost analysis process (2001) Designed programme for financial controllers & general managers (drivers at properties) Sweden (trialled analysis process) (2002) Delivered seminars in-country at the regions Germany, Belgium & Norway (2003) Poland, UK & Ireland (2004) France, Denmark & Iceland (2005) Austria, Switzerland & Italy (2006) Embedded through the companys virtual management school ( )

Consultancy (reflection) Natural platform for co-operation and interaction between industry & education Opportunity to reflect on strengths/contributions of the organisation and the university Practitioners obtain new/novel applications Faculty research endeavours tested/refined/adapted in rigours of live commercial environment Cutting-edge experience to bring back to teaching environment Financial rewards to university, school & individual Raises faculty profiles (companies tend to engage with individuals)

Contribution to research European hotels performance project (a) company-wide questionnaire distribution (b) facilitated follow-up field interviews PhD industry-wide CPA project (Vira Krakhmal) (a) part-funded full-time candidate (b) provided complete data collection access to build a constructive case study model (13-month period) PhD pricing project (Jean-Pierre van der Rest) (a) funded complete data collection stage (b) arranged access to 33 hotels -18 cities -16 countries in Europe MSc dissertations: generous fieldwork access e.g. (a) one student is currently interviewing corporate office executives in Brussels for investment appraisal project (b) plus another student granted access at two Radisson SAS hotels: Birmingham (for pilot) & London (part of main study)

Partnership beyond the ordinary Sponsored professorial inaugural lecture event – champagne reception & buffet for over 100 guests Kurt Ritter, President & CEO attended and delivered keynote address for our major alumni event at Chelsea Football Ground Contributed forward for new accounting & finance book ( & almost a chapter on corporate governance..!!!) Sponsor annual Masters book prize for top student Joint authored a decade of collaboration article

The company has always said yes (carrys responsibility!)

Research to Consultancy/Practice

Institute of Chartered Accountants in England and Wales Tourism and Hospitality Group Annual Conference, November 2006 C ustomer Profitability Analysis Research Findings Prof Peter Harris & Dr Vira Krakhmal

Purpose of the project Construct a model to assist hotel companies to improve customer mix decisions

Phase 1: PhD Research Project (2002 – 2006) Research Project

Model construction Development of a CPA Model (using activity-based costing) Case property is a 280-room, four-star, full-service international city-centre hotel

Customer characteristics by profit contribution Profit Loss

Case hotel customer profit profile 50% 100% 150% 200% 0% 10%20%30%40%50%60%70%80%90%100% 250% Cumulative % of Customers Cumulative Operating Profit 20 % of the customers generate 250 % of the profits 80 % of the customers lose most of the extra 150 % of the profits Unrealised Profit Potential Actual Profit

Dependence Ideal situation; little or no subsidising Room for action; small number of very unprofitable customers Low risk situation; no extremes High risk situation; dependence on few customers; extensive subsidising Subsidising effectHigh Low Source. Storbacka, 2001 Customer-base portfolio analysis (strategic tool) Profit profile at the site

Phase 2: Dissemination to Industry (2006 – 2007) Joint Publication (BAHA, Oxford Brookes University & The Open University) Recommended Practice Guide for Customer Profitability Analysis (revised draft guide submitted September, 2007)

Phase 3: Informing practice (2008) Friday 25 th April: Presentation of CPA research findings at corporate office, Brussels Monday 26 th May: Meeting with corporate office team from Brussels at Radisson SAS Portman Hotel, London to: Explore the implementation of CPA in the Rezidor Hotel Group Meeting resolved to develop a system and pilot in the new Radisson SAS EU Hotel, Brussels Consulting opportunities are already beginning to flow