The following article appeared on HotelNewsNow.com on November 20, 2014:
Owners these days are looking for financial results in real time, not just once a month. What does this mean for your business?
It’s not much of a memory stretch for mid-career hotel executives like Kerry Ranson to recall when property owners expected no more than a monthly P&L statement and an updated quarterly forecast on revenues and profits to be satisfied.
“Wow – those days are long gone!” Ranson exclaimed. “Today, financial reporting is a daily activity – and in some cases, several times daily!”
Hotel management industry leader Ranson is president of Expotel Hospitality Services Inc. and chair of the IHG Owners Association. He commented recently on the changes today in the quality and quantity of data and reports that today’s owners expect from their operators.
Ranson said that the “50,000-foot view of operations and finances” that owners had over their assets just a few years ago has come down rapidly in the last few years to now more like a “50-foot perspective.” Workplace technology, he said, has opened the door to greater communication efficiency and specifically the ability to share both financial and non-financial operating reports almost as spontaneously as the data is created.
Another change factor is the hotel owner profile has also transformed, he said. “The biggest adjustment recently is the presence of a different buyer now in our industry. These new ownership and investment groups and REITs just expect more communication and as much information as we can provide. Fortunately, we excel in that area.”
“Owners are basically looking for all the details we can provide about revenue amounts and sources and segments and what we’re doing to capture every opportunity out there,” Ranson explained. “Reports used to provide ‘reactive’ data, but now we’re sending owners what we call ‘pre-active’ information daily.”
Ranson said the new breed of owners is looking for transparency above all – transparency in performance analytics, business intelligence and operating results. “Our Expotel system provides real time data and is cloud-based and highly versatile, allowing owners to see everything from daily performance to mid-month results to guest service scores to competitor analyses – even down to what invoices are open or paid. If they want to see it hourly, we can do that too.”
What Hotel Owners Expect Now
This demand for faster and more detailed and concise reporting has compelled operators to develop new generation tools for producing the kind of real-time depth and scale of data owners are expecting today. Ranson said these resources “do not come cheap” but clearly are required to meet the changing information standards between owners and operators in the industry.
“We boil down what our owners want to what we call the ‘FACTS,’” Ranson explained. “The FACTS acronym stands for information flexibility, as reporting customization is important; asset valuation, because growing asset value is the bottom line; communication, which must be open and routine; trust, which happens when an owner gives us their checkbook and the responsibility to manage it well; and hotel market share, which is our fundamental responsibility to grow.”
Is there a down side to providing perhaps too much information? And what are the next trends in ownership information reporting in the hotel industry?
“To be clear, ‘TMI’ does not apply when it comes to supplying owners what information they expect in 2014,” Ranson observed. “Strong hotel management companies like Expotel have become virtual information and data centers today, pushing out detailed financials, brand service scores, competitive market analyses and more everyday to satisfy the expectations of today’s ownership groups.
“As for future trends, we’ll see even more and more reporting flexibility and customization,” he added. “But today, we kind of think the future is right here.
“The good news is that all of it reflects upon more pro-active engagement between owners and operators, who decide together what information, when, is most critical to their shared success. It’s the new basis of stronger business partnership in the hotel industry. Ultimately, we view it as all directed to our mission of providing the best guest experience and the best employee work experience as possible at our hotels.”