The Melrose Hotel Company Studies New Process
to Hospitality That Includes Goal Setting, Goal Tracking,
and Data Analysis
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PITTSBURGH, December 2, 2003 � During the past 48 months the hospitality
industry slid sideways in reaction to September 11th, SARs,
and a feeble economy. Pundits say this is about to change in 2004 as hotel
occupancy, RevPAR and the economy make steady gains in 4Q�03, and an important
new technology concept is imbedded in management company infrastructures:
Performance Management based on business intelligence, a new process to
hospitality.
Performance Management in Hospitality
Performance management is made up of three elements: planning goals,
monitoring goals with balanced scorecarding, and analysis of performance
on a real-time, actionable basis. Widely deployed across other industries,
the concept is gaining acceptance in hospitality as a way to improve return
on investment for owners through more efficient reporting, more accurate
and actionable information for decision making, and improved customer management.
"If you are not conscientious to the concerns of your investors, you should
not be in the hotel business. Returning money and protecting assets for
investors is key, and having performance data real-time is essential,"
said John J. DePaul, president and CEO of Philadelphia-based The Melrose
Hotel Company, which posts an enviable 98% intent-to-return rating from
its guests. DePaul, who scans other industries for best practices that
may benefit his company, admits performance management is "a way of life
with me." He and his team trimmed a 102% turnover rate to 37% in 2002 and
improved labor costs ten-fold through daily real-time labor reports.
In hospitality the three components of Performance Management form a
circle of processes that include budgeting and forecasting, analysis measures
to check performance against goals, and analytical tools that drill down
into all data sources such as Smith Travel Research, and the property�s
PMS, back office and point of sale systems. Hotel operators can enter the
circle from any point. The objective is to evolve accurate decisions as
quickly as operational data changes, which results in an improved Performance
Management capability and increased revenue. At least one company, Aptech
Computer Systems, Inc., has developed an integrated suite of Performance
Management products for the hospitality industry that combines all three
processes.
Managers may enter the Performance Management process
from any point in the circle for a clearer picture of property efficiency.
Together all three components provide a �heads-up� display for managers
in dynamic hotel situations, and can yield a greater return on investment
for investors. |
Property Managers Have A Stake In The Process
Although the supporting business intelligence system is maintained at
the corporate office, every manager has a stake in the Performance Management
process because they are the source of forecasting and budgeting information.
Budgets are the standard of how managers think a property should be run,
while forecasts are a moving target of business realities. In both cases
property managers are invested in the outcome, and timely balanced scorecarding
reports generated at headquarters are the reality check of how they are
doing. The third key element of Performance Management is database drill-down
functionality that lets managers view the actual source data influencing
their enterprise, whether it is monthly utility expenses, in-room entertainment
take rates, or RevPAR, to verify data and predict trends. Each of these
processes automatically gathers information from the data mart on the corporate
server, including Smith Travel data, which can be received weekly or monthly.
Taken together and applied to any company these three components give operators
the tools to monitor their business today and control its direction into
the future.
Data Integration From Separate Systems, Coming Soon?
Business intelligence � the foundation of Performance Management - combines
data components from all areas of property operations to form a consolidated
source of operational information that spans systems. Each type of information
is maintained as a �data cube� in the corporate data mart. Data cubes hold
much more than accounting information. They may contain guest satisfaction
comment-card statistics, employee retention numbers, Smith Travel comp
set performance, and property revenue and expenses from all sources, which
is united and made available to managers in any format necessary to guide
a company. "We are in an un-rolled up industry," said John DePaul, President
of Melrose Hotels. "Most vendors approach data like the Old West; we have
25 to 30 vendors whose systems will not integrate with each other. It is
devastating to hotel companies. Now we have new Performance Management
tools from Aptech and other companies that are allowing us to combine data
to develop more intelligent management practices. Our first goal is revenue
maximization. As this is achieved in the next two years we will insist
on complete integration of all systems on a common platform. Cost cutting
measures are over. We as an industry cannot cut any further. It is time
to raise our rates and return to profitability through higher average rates.
As an industry we must use all our tools, including Performance Management,
to bring back higher ADR and RevPAR."
About Melrose Hotel Company
The Melrose Hotel Company operates upscale, traditional hotels in urban
locations that include The Melrose Hotel, New York (formerly The Barbizon);
The Melrose Hotel, Dallas; The Melrose Hotel, Washington, D.C.; and the
Westin Great Southern Hotel in Columbus, Ohio. The Melrose Hotel Company
is a subsidiary of Berwind Property Group, LTD., a Philadelphia-based,
privately held real estate investment company with a portfolio in excess
of 27 million square feet of hotel, office, residential, retail, and industrial
properties located throughout the United States. Berwind Property Group
is actively pursuing the acquisition of other upscale hotel assets in urban
locations such as San Francisco, Los Angeles, Boston, Chicago and Atlanta.
Aptech
Computer Systems, Inc. is known for valuing human relationships and evolving
technology offerings as the market dictates, a commitment that has earned
the company 100% customer loyalty of its 700 users over the last three
decades.
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