10 Steps to Business Plan Development 2017
September 21, 2016 2:50pm
By Robert A. Rauch
This article is designed to include the keys to business planning and development success but there are changes occurring in our industry that require monitoring. These include disruption (is it really disruption or is it innovation?) and changes that have transformed our industry from an art to a science. Before we complete our business plans for 2017, a review of macroeconomic data is in order. China’s growth is slowing, Europe remains suspect due to the Brexit and limited growth signs but we do not anticipate a recession in the U.S. economy in 2017. Despite the economic uncertainty and global terror threats, we believe a soft landing will keep the U.S. slowing to about a 1.5 percent GDP growth rate in 2017.
Why no recession? Unemployment is low, consumer confidence is solid, the Institute of Supply Management continues to give the economy a vote of confidence and interest rates and oil prices are still down. All of this information bodes well for the hotel market in the U.S. which should lead to our estimate of 3 percent RevPAR growth in 2017. Naturally, the caveat is that unexpected “event” that could stimulate a precipitous decline in demand. We believe that can be averted in 2017 despite the craziness in the Middle East and the turbulent economies abroad. Beyond 2017 is in slight question due to the number of new hotels in the planning stages in major cities. We assume not all will be built and the growth patterns will continue at the pace estimated for 2017 but that will be monitored closely going forward.
As we are now in the final third of 2016, this means budget and marketing planning time is here. While many operators merely look at last year’s numbers to budget and forecast, the only meaningful way to budget is to analyze the market thoroughly. Whether you are opening a new business or getting ready for 2017 budgeting, now is the time to complete the planning process.
The following action needs to be taken:
Use this process now or risk losing your competitive edge! Enjoy this time of year despite the crazy political environment—it is not the end of the world, just a turning point in American politics.
Note: I referred to franchise in this article and by that, I mean franchise, membership organization, brand relationship or your own branding.
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Bob Rauch serves as CEO of RAR Hospitality, one of the fastest growing hotel management and consulting companies in the industry. He is an internationally recognized hotelier with over 40 years of hospitality-related management experience. Recognized by his "Hotel Guru," moniker, Bob shares insights and industry trends on www.hotelguru.com. In addition to being the "Hotel Guru," he publishes Hospitality Innsights, an electronic newsletter that is distributed monthly.
Contact: Robert Rauch
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