2. Work on your business not in it
“Show me a company where everyone is trying their hardest and I’ll show you an organization destined to fail.” W Edwards Deming
1 min

3. Work on your business not in it
“It is not enough to do your best; you must know what to do, and then do your best.” W Edwards Deming

4. How do they do that? GOP 53.8% GOP 50.1% GOP 47.0%
GOP does not consider expense from:
Management Fees
Rent Expense
Taxes
Interest Expense
Depreciation
Amortization
Replacement Reserves
1 minute

5. High Profit Hotels Go Clockwise
Market Dynamics
Competitive Position
Guest
Experience
Staffing
& Amenities
Rate Placement
Room
Sales
Service Level & Expenses
It’s rarely one thing, and even if it is, everything in the cycle will still be affected.
Profit
Loss
5 min

6. Total Rooms Sold in Market
Market Dynamics
How does this impact profit?
100,000
Rooms
Total Rooms Sold in Market
10,000 family
50,000 leisure
40,000 business
What segments are they
How much do you get
1,000 family
10,000 leisure
9,000 business
Client closing -200
How will you retain
9,000 family
40,000 leisure
31,000 business
Where do the rest stay
360 rms new company
Is there new demand
More Revenue
Now 20,000
Want 20,952
Need 1,152 rms
IF 360 rms
Steal 792 rms
How will you get more?

7. Market Dynamics Why are guests visiting your market
Become an expert on guests in your market
Why are guests visiting your market
What are the main sources of demand
How do people book hotels in your market
What experience are they looking for
What do your competitors offer that you don’t

8. Market Dynamics Hourly Employees Management
For every guest: ask what brings them to the hotel, track Market Segment, if it’s Business get Company Name
Ask walk ins and non repeat guests where else have they stayed in the area
Do daily call arounds to area hotels
Management
Complete a formal review of supply and demand in the market annually
Train hourly employees on their role
Monitor the businesses of your top demand generators
Owners and Management Companies
Require monthly market segment data
Do an ROI on wage increases and other spending initiatives
Require action plans for increases in revenue

9. WHy? Competitive Position
A report card tells us what happened, not how to fix it
WHy?

10. Competitive Position How does this impact profit?
Pharmaceutical Account
Offshore workers needing 1 night when heading to and from the rig
What business is our competition getting that we’re not?
Need breakfast ready at 6 am and direct bill
They require transportation and a meeting room
Why do they choose them over me?
Am I suited for that business,
and do I want it
This is business I am well suited for
I do not have a van nor meeting room
Could use breakfast room, would need van and driver
How do we get them to
choose us
Will offer a rate $5.00 below competitor

11. Competitive Position Be a Predator NOT a Victim Know the Market1
Know the Market 2
How do you fit in the market 3
What sources of business are your strength 4
What are your index goals 5
What new sources will you attack 6
How will each booking channel be used 7
Where are your rate opportunities 8
What is needed to complete plan

12. Competitive Position Hourly Employees Management Ownership
Get information from your employees who worked for your competition
Make sure they understand the goals for the property
Keep them informed of demand sources you are looking to add
Management
Determine what segments you are best suited for, and which ones are booking most frequently
Do monthly or quarterly visits to local demand generators
Set goals for where you want your indexes to be
Establish specific actions to accomplish those goals
Position your revenue management settings to drive your index goals
Ownership
Purchase additional STR reports
Consider additional services and reporting

13. Staffing & Amenities How does this impact profit
What will bring more room and rate
Staffing &
Amenities
Grow Revenue
What do we get and what don’t we
Competitive
Position
Market
Dynamic
How much business is there

14. Staffing & Amenities Are you providing a competitive experience
Impact on Booking
Leisure
Business
Cleanliness
+65%
+55%
Comfort
+45%
+35%
Rooms
+25%
Wifi
+40%
Service
+20%
+15%
Amenities
Breakfast
+10%
Exercise Room
+5%
Food
N/A
From
When travelers were asked which attributes were “Extremely Important” to them in deciding to book a hotel, they responded as indicated.
These scores also reflect the impact that negative reviews in these areas will have on your booking power.

15. Staffing & Amenities Are you providing a competitive experience
Your Hotel
Competition
AM Maintenance
Weekend Security
No Driver
1 Breakfast Attendant
No Sales Person
Rm Attendants $8.50/hr
No Housekeeping Mgr
AM & PM Maintenance
Security
Van Driver
2 Breakfast Attendants
Sales Person
Rm Attendant $10.00/hr
Housekeeping Manager

16. Staffing & Amenities Are you providing a competitive experience
Your Hotel
Competition
Standard Breakfast
Standard Amenities
Exercise Facility
Swimming Pool
No Transportation
In Room Coffee
Regional Specialty Item
Custom Amenity
No Exercise Facility
No Swimming Pool
Airport Transportation
No In Room Coffee

17. Staffing and Amenities
Hourly Employees
Cleanliness
Service
Management
Comfort
Amenities
Breakfast
Ownership
Comfort
WiFi
Wellness Center

18. Staffing & Amenities Hourly Employees Management Owners
Note any recurring request
Note what items are used the most
What gets thrown away or left behind the most
Management
Determine what additional positions or amenities could improve revenue and profit
Form a committee of long term hourly employees as advisors
What unique services or amenities can you offer to travelers?
Complete a wage and benefit survey once a year
Actively recruit employees
Owners
Judge suggested changes in staffing and amenities by GOPAR impact
Consider paying for your GM to experience the competition

19. ? Guest Experience How does this impact profit Positive Guest Feedback
Grow Revenue
What will bring more room and rate
Staffing &
Amenities
Negative Guest Feedback
What do we get and what don’t we
Competitive
Position
Market
Dynamic
How much business is there

20. Guest Experience Cornell University Study How does this impact profits
Cornell University Study
Online hotel reviews impact room demand and appear to be responsible for rate swings of more than 10%
A one-point swing on Travelocity’s five-point rating scale, on average, sways room rates by 11%.
Factoring in multiple review sites, a 1% increase in the hotel’s “online reputation score” was found to boost RevPAR by almost 1%.

21. Guest Experience When you respond don’t: When you respond do:
You may be right, but what it is costing you
When you respond don’t:
Talk to the person who complained
Insult the person posting
Repeat the problems in your response
Argue back and forth
Ask the person to contact you directly
Address the validity of the claim, no one cares but you
Cherry Pick, commenting on positives and avoiding negatives
When you respond do:
Make future guests believe it won’t happen to them
Offer realistic, detailed, solutions and explanations
Be to the point
Make sure you fix the problem or make sure expectations are adjusted
Make sure that guest who have a positive experience are posting

22. Guest Experience Hourly Employees Management
Provide the best service possible
Encourage all guests to provide online feedback
Make sure management is aware of all complaints and concerns
Show reasonable care
Management
Do not over promise, ensure that online descriptions are current and correct
Invest in training
Limit turnover
Reward employees for telling you about issues
Prepare accurate forecasts that ensure you have proper staffing, amenities, and supplies on hand

23. Guest Experience Management Ownership
Make budgets and forecasts that target segments that line up well with your product
Remember that replies are speaking to future guests, not the person writing the review
Read your competition’s comments as well as your own
Follow the response rules
Ownership
Consider a service to handle online reputation
Provide resources to fix recurring complaints
Understand the true cost of turnover when considering wages

24. Rate Placement $113,381 $95,974 How does this impact profits
2158 Rooms
$ Rate
$218,042
Revenue
$113,381
2868 Rooms
$90.60 Rate
$259,391
Revenue
$95,974

25. Rate Placement http://www.jolynphoto.com/blue-swallow-motel.html

26. Market Segment Day of Week Pattern Booking Channel
Rate Placement
$ High Volume Base
Negotiated
Volume
$ Book through site or app
Brand Direct
$ Book directly with you
Hotel Direct
$ – Rate shopping, commission
Internet Non-Opaque
$70.29 – Greatly limit, commission
Internet Opaque
Market Segment
Day of Week Pattern
Booking Channel

27. Rate Placement Hourly Employees Management Ownership
Understand how to use the PMS fully, to access and enter rates
Be aware of the lowest rate available, but don’t start at that rate
Be aware of the ALL the rates they are authorized to sell
Management
Have rate plan that is not purely based on reservation volume
Use a detailed budget and forecast to set rates in advance
Use your knowledge of the market and your goals to set the revenue management system appropriately
Ownership
Understand Revenue Management does not replace knowledge of the market, and managers decisions
Consider the ROI on Sales and Revenue Management positions
Consider the ROI of hiring outside sales and revenue management services

28. Rooms Sales How does this impact profit?
Not all rooms occupied are the same
Labor and Expense are not a pure curve
Forecasting
Different segments produce different profits
There are points in occupancy that are more profitable
Allows you to see upcoming problems in time to affect them

29. Profit varies by Segment
Rooms Sales
All Room Nights were not created equal
Rates vary by Segment
Cost vary by Segment
Profit varies by Segment

30. Rooms Sales
Expense is not a perfect curve

31. Rooms Sales Affect the Future, Don’t try to Predict it
Have you ever....
Sent employees home early or told them not to come in tomorrow
Had to call employees in unexpectedly
Run out of breakfast items
Not been able to pay property taxes because of cash flow
Had a sold out night with an average rate below your highest levels
Had financial performance behind last year, and wondered why
Been surprised by a level of business
Posted losses for a year or quarter
Low Booking Pace
Who is likely to be travelling
Where am I on profitability scale
What business is best for us
How is the market trending
How does my decision impact profit

32. Rooms Sales Hourly Management Ownership
Understand the goals of the hotel
Completely understand the impact of selling a room
Management
Have a plan as to how you will fill rooms, that allows for understanding failure
Become knowledgeable about segmentation and booking channels, and manage both for profit
Accuracy in projections means both higher profits and better guest experience
Ownership
Change your reviews and questions to be detailed. Ask how will we get that increase? Why are we targeting that business?
Find the most profitable Occupancy ranges and Mixes of Business

33. Service Levels and Expenses
How does this impact profit?
Expense
Revenue
Expense
Revenue
Expense
Revenue

34. Service Levels and Expenses
Know your numbers
Awareness is Efficiency
Efficiency is Margin
Margin is Profit
Profit is Money
Money is Loyalty

35. Service Levels and Expenses
Compare to similar hotels

36. Service Levels and Expenses
Compare to your own performance

37. Service Levels and Expenses
Are you doing better? Flex/Flow

38. Service Levels and Amenities
Management
Build accurate projections that allow you to have a good grasp on Cash Flow
Accuracy in projections build needed credibility
Use the 11th Edition of the Uniform System of Accounts for the Lodging Industry
Create and monitor Labor Standards to help create accurate schedules and projections
Manage expenses off an adjustable forecast, not out of a checkbook
Use forecasting to help determine purchasing needs
Maintain inventory
Track Cost and Staffing metrics per guest and per room
Ownership
Balance short term cash needs with a long term plan
Put in place processes and reports to ensure standards
Accurate projections provide for better cash flow management and planning

39. Planning Benefits Ownership
Balance short term cash needs with a long term plan that promotes growth and continued success
Accurate projections provide for better cash flow management and planning
Avoid not having enough cash flow to pay property taxes, insurance, and other large expenses
Demonstrate to lenders your knowledge of your business and your ability to manage financial results

40. Hotel Operating Profit Evaluation
Financial data from over hundreds of hotels
Property-based profile
Free to owners
Provides a STR report style report for expenses and profits
1 minute

41. Thank You for Attending
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