Every hotel CEO and people in top management positions should constantly improve their ability to make the right decisions. There are a vast number of tools and systems available to structure and support the decision-making process. It is not as simple as buying some new technology. Decision-making is a human skill supported by several techniques.
Any decision is a prediction about the future. When the CEO of a hotel makes a decision, the objective is to choose the option that gains the most ground in achieving the goals towards the vision. When there are no good options, such as during the pandemic, the objective is to choose the least worse alternative.
Ideally, hotel CEOs should have a crystal ball that provides perfect knowledge to make life easy. Even if many hoteliers think so and seem to trust their gut feeling over decisions based on data, information, and insights, the crystal ball is not yet an option. There is another and better way of preparing the hotel for better decisions. Here are the three most important processes that a hotel must implement to make better decisions that lead to success.
1 Total revenue forecasting
Every hotel needs a solid forecasting process. The total revenue forecast is the base for many types of decisions, such as:
- Marketing activities
- Sales activities
- Rate adjustments
- Tactical campaigns
- Labor scheduling
- Cash flow/financing
Gut feeling is not the best method to make decisions within these areas. A better way is to have an accurate, updated, and complete forecast as a starting point to make qualified decisions. A revenue manager needs less than an hour per day to maintain a correct revenue forecast.
2 The learning process
Hotels tend to focus on day-to-day operations and solve problems when they arise to assure that guests are happy when they check out. Every hotel would benefit from setting aside some time for reflection on what could be improved. The teams in different departments in a hotel should have a monthly learning meeting to discuss all past problems and solutions and then create a standard operational procedure so anyone can solve the problem faster and more accurately in the future. Document the learnings and include them in future training of new employees. After a few months of these learning meetings, the operations will feel much smoother, and team members can devote their time to servicing guests.
3 Executing the strategy
The first two processes will keep you floating on the same spot. You will survive for now, but eventually, you will need to start swimming. The hotel needs a direction where to go from here. A vision or a dream is long-term and, in most cases, stays the same for many years. Every hotel needs a strategy on how to reach its long-term goal. Top management creates a plan based on many variables, such as hotel type, location, destination, competition, and many more. The next step is to execute the plan and track the progress towards the vision. Setting short-term team objectives, following the progress, and reporting to the owners and top management is vital to align everyone working in the hotel towards the same mission.
Find the right people
The CEO has full responsibility for everything in the company but will not become successful without the right people. It looks like a lot of talents have left the industry, so it will become more challenging to find and attract skilled persons to critical positions in hotels. Having the three vital processes in place will free up time for the CEO to focus on developing the hotel, including finding talents.
For more ideas, download the white paper "Create a High-Performance Commercial Team."