BSC – Hotel PFA

A Guide On Managing Hotels Kpi

Posted on April 28, 2019 by blogger

KPI management is as important as implementation process of Balanced Scorecard. Sure thing, the choice of the right key performance indicators and development of the right strategy is vital for BSC success. At the same time maintenance of Balanced Scorecard and management of key performance indicators is a critical success factor for efficient use of Balanced Scorecard. By the way, improper management of key performance indicators is one of the most common mistakes in implementation and maintenance of Balanced Scorecard. Just having a set of key performance indicators is not enough. It is necessary to adequately measure them, exchange obtained information between different managerial levels, as well as use evaluation results in decision making and strategy revision. This also concerns hotel Balanced Scorecard. Hotel industry is known as being extremely competitive. Indeed, there is no lack of options when looking for the hotel to spend the night there or the entire vacations. Hotels are eager to use
Balanced Scorecard since this system can certainly help transform strategic plans into real actions. This is only possible if all rules and norms of Balanced Scorecard maintenance and KPIs management are observed.

As known, Balanced Scorecard consists of four categories: financial, customer, internal business processes, learning and growth. What makes Balanced Scorecard unique? Unlike similar performance evaluation systems of Balanced Scorecard evaluates nonfinancial indicators as well. In terms of a hotel industry these indicators refer to customer satisfaction, improvement of hotel personnel professional level, optimization of internal processes, for example laundry, dining services, housekeeping and cleaning, reception services etc.

No less imagine such a situation hotel top managers have developed a strategy and selected a set of key performance indicators that fall into the above mentioned four categories. Now is the time to start using Balanced Scorecard and evaluate the selected KPIs. It needs mentioning that key performance indicators should be measurable and understood. As time passes by the first results are obtained. This is perhaps the most important stage since top managers have to find out whether are not they have made the right choice and assigned the right weights for indicators. For instance, such a key performance indicator as room occupancy may not matter much as visitors tend to stay for more than three days in a hotel and maintenance of vacant rooms requires little expenses. This is just a hypothetical example.

Having obtained the first results, top management needs to analyze them. KPI evaluation results show progress or regress of a hotel on its way to implement strategic goals. Thus, hotel managers and owners locate problematic areas and make decisions as to necessary improvements. For instance, if your kitchen performance prevents hotel from optimize an overall performance, relevant decisions need to be made (e.g. hiring new chef, changing food supplier etc.). Balanced Scorecard will work only in case the information it provides is actually used to initiate changes. Balanced Scorecard will not change the situation by itself but rather offer important and valuable information for top managers and business owners.

How To Manage The Operations Of Hotels Bsc

Posted on October 1, 2018 by blogger

Implementation process of Balanced Scorecard is followed by its maintenance. Just developing a set of key performance indicators and introducing Balanced Scorecard to the company is not enough. The entire personnel must learn to live with Balanced Scorecard and use this effective performance evaluation and strategic management system in routine everyday work. This concerns all industries and business types, including hotel business. It should be mentioned that hotel industry is particularly competitive, and thus, control of adopted strategy is extremely important since any mistakes and dedications may result in loss of competitive advantage and consequently in monetary losses. In theory, Balanced Scorecard looks great. If you read reviews and works by creators of this tool, Norton and Kaplan, you will learn that BSC is created to communicate operational and strategic management. Very often, strategies remain on paper and never transform into real actions. This is a very common problem in many businesses
. One of the greatest mistakes in implementation of Balanced Scorecard is inability to maintain and control the system. In this article, well talk about hotel Balanced Scorecard, its components and operations to control the system.

As known, Balanced Scorecard starts with development of a strategy. This is the first age that many top managers fail. What is a strategy for hotel? Making a lot of money is a good goal but strategy is something different. One has to identify mission and values for the hotel. Top managers should answer simple questions where will we be in several years or how will we satisfy needs of our customers? A strategy is a global plan that implies future vision. It also contains methods of achieving and controlling strategy implementation.

Choice of key performance indicators is a subsequent stage that also requires much attention. The most typical hotel KPIs are room occupancy, percentage of international guests, house keeping costs per overall expenses, average revenue per room, average revenue per customer, percentage of customer complains per total number of customers and others. It is important to select the right indicators that represent critical success factors. It is never late to introduce amendments to hotel Balanced Scorecard and substitute indicators if the wrong choice was initially made. Key performance indicators offer top managers real time information on how well the strategy is being implemented at the moment. Moreover, some indicators, namely leading KPIs, can tell much about what is going to happen in the nearest future. For example, improvements in customer satisfaction imply that satisfied customers will come back to the particular hotel which means growth of revenue.

Finally, it needs mentioning that the most important stage is maintenance of Balanced Scorecard. It is possible to develop strategy and key performance indicators within several days. It is possible to present a Balanced Scorecard to the personnel and explain why the company needs to use this system. However if top management and ordinary personnel is reluctant to use Balanced Scorecard all have an entirely wrong concept of this system, BSC will most certainly fail as it will only complicate management process.

Management Of Hotels Scorecard With Bsc

Posted on September 21, 2018 by blogger

It happens that Balanced Scorecard turns into said waste of time and money. This explains critical reviews of Balanced Scorecard submitted by top managers with a negative BCS experience. The problem is that Balanced Scorecard is often considered and magic business management tool that can solve any problems. BSC is a strategic management tool and thus some top managers think it can substitute strategy. Balanced Scorecard mistakes are quite typical, although they differ throughout various industries. Sometimes sets of key performance indicators and implementation guidelines are taken from online sources without proper revision and harmonization with company strategy, organization structure, goals and objectives etc. This also concerns implementation of Balanced Scorecard in hotels. As known, hotel industry is extremely competitive. In order to maintain competitive advantage and revenue rates hotels have to make unique offers to customers providing them with top quality services at competitive prices.
This is only possible if everyone in the company is thinking of ways to improve his or her performance and contribute to implementation of strategic goals.

Balanced Scorecard is perhaps the best tool for these purposes. It does not only serve as performance evaluation tool but also as a powerful strategic management system. It communicates operational in strategic management and takes strategy from presentations and strategic plans to real actions. Implementation of Balanced Scorecard in a hotel has its own peculiar features which are mainly represented in the choice of key performance indicators and customer oriented strategies.

The first thing top managers and hotel owners have to do before making a final decision to implement Balanced Scorecard is to develop a strategy. Do not hope that Balanced Scorecard will substitute the strategy. One should think of future. There is nothing wrong in earning immediate cash, however, you will lose in the long term since competitors make plans for three, five and even ten years. In this sense Balanced Scorecard is just perfect. BSC makes it possible to design long-term strategic plans and control their implementation in real time. Previously, hotel top managers analyzed only financial indicators which represented financial results for past periods. With Balanced Scorecard it is possible to be kept informed on implementation of hotel strategy all the time.

Once the strategy is developed, top managers and maybe Balanced Scorecard consultants have to look for key performance indicators which will be measured in order to obtain information on strategy implementation efficiency. Key performance indicators cover critical success factors in various spheres and aspects of running hotel business. KPIs fall into several categories: financial, customer, internal processes, as well as learning and growth. Names of categories are quite explicit and it is easy to imagine what key performance indicators can be found there. It needs mentioning that implementation of financial goals is only possible through implementation of goals in the other categories. Big profits are made only when more and more customers are coming to hotels, which is only possible through optimization of internal processes, development of unique offers and improvement of personnel professional skills and knowledge.