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"Productivity Drivers for High-Impact Hotel Performance"
The highly seasonal nature of the tourism business creates significant challenges for the hotel sector. Management must “gear up” for the all-important high season by focusing staff energy and managing customer service quality in the critical months that most customers are served. As a result, many hotels focus resource planning almost exclusively on achieving a successful high season and rely on significant discounting to boost bookings for the remaining months.
Key Topics and Findings
Best practices and performance metrics in this research document focus on managing employee resources to reflect seasonal changes in the volume of business, including room rate and discount structures. By targeting these areas for improvement, hotels can improve revenue and cash flow, especially in the low season.
The document also shows examples of how hotels excel in managing financial and operational performance to help hotel executives determine linkages between bottom-line performance and specific activities that drive customer service excellence and overall productivity. Well-defined yield-management systems, for example, help managers anticipate swings in business and plan for staff and resources accordingly, so that the customer experience remains consistent. These systems consider key variables specific to hotel business flow – customer segments, product perishability and ability to pre-sell rooms – to arrive at rates that drive both revenue and occupancy rate.
Yield-management software enables hotel managers to undergo statistical analysis for optimized pricing based on historical rates, seasonal occupancy levels, cancellations, customer segments, and capacity based on durations of stay. It also aids in driving capacity utilization planning by determining the number of rooms that should be reserved for full price or “rack-rate” customers and the number set aside for various discounting segments.
The findings were gathered in two ways: The field research team designed and conducted a performance benchmark survey that gathered statistical insights from ten diverse hotels in the Caribbean, representing a cross-section of the industry. The Best Practices, LLC research team then conducted in-depth interviews with key functional leaders at participating hotels to harvest qualitative insights, process excellence observations and managerial lessons learned.