#1 Owner Group Priority: 
Performance Management for Investors
.
The Melrose Hotel Company Studies New Process to Hospitality That Includes Goal Setting, Goal Tracking,
and Data Analysis 

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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Contact:

John J. DePaul, President & CEO
The Melrose Hotel Company 
3000 Centre Square West 
1500 Market Street 
(215) 575-2360 
www.melrosehotel.com
jdepaul@melrosehotel.com

Aptech Computer Systems
135 Delta Drive 
Pittsburgh, PA 15238 
Sales: (800) 245-0720 or (412) 963-7440
Email:  vueinfo@aptech-inc.com
Website:  www.aptech-inc.com



 
Also See Big Box Hotels, Boutiques Share Design Styles; Standardize Data, Financials To Support Long-Term Growth of Real Estate Parent / October 2003
Economy Brightens: H.I. Development Corp. Picks Enterprise-wide Business Intelligence, Back Office Technology to Drive Growth / September 2003
CHIP, Other Ownership Groups Eye New Scorecarding Tool To Communicate Common Vision of Enterprise Priorities, Control Costs, Raise Profit Margins in Tough Economy / June 2003
Dolce International Clicks Through Smith Travel Data To Chart Growth Plans, Increases Market Share 4 Percentage Points / June 2003
The Melrose Hotel Company Installs Business Intelligence Software to Stay Above RevPAR Curve / May 2003
Pineapple Management Benefits: Technology Vendor Invests in Back-Office System Advances for Operators; ‘New Economy’ Demands Greater Efficiency in Hospitality Operations / Mar 2003
Minnesota Hotel Operator Builds Success With Locations Near Chain Restaurants, Web-Based Centralized Accounting / Feb 2003
Business Intelligence Software Identifies, Controls Costs; Focuses on Improving Profitability for Hoteliers in 2003 and 2004 / Dec 2002
Mid-Sized Management Firm Bursts into Creative Boutique Market with Added Services, Web-Based Centralized Accounting / Sept 2002
Marriott, Hilton Management and Real Estate Firm Dominates New Construction Niche With Business Intelligence Software, Relationship Financing / Aug 2002
Starwood, Host Marriott Shine at New York Hospitality Investment Conference; Edge Ahead with Business Intelligence Tools, Rely on Aptech Applications / June 2002
Hotel Undergraduates Shift With the Industry Towards Business Intelligence / March 2002
Interstate Hotels Partners with Aptech to Install ASP Model; ASP Back Office Provides Value to Hotel Owners With Ability to Reduce Capital Outlay, Eliminate Maintenance Costs, Bring Faster Processing Speeds / June 2001 
Jill Wilder Named Vice President and Officer of Aptech Computer Systems Inc. / May 2002
Survival Tactics; New Technology Directions Surface in Business Intelligence Survey / November 2001 
Aptech Opens Business Intelligence Door for Small to Mid-sized Management Firms / October 2001


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