If you are top management, GM, head of commercial, or the CFO in the hotel, you should be focusing on the commercial reporting the first day after the end of the month. These reports can be highly automated but still needs a well-thought-out process to add a bit of human judgment to all figures.
When implementing the month-end process, it is critical to commit the team to all the details and timeline. Here are some of the actions needed in the process.
Update the forecast
The process starts the last working day of the month by updating the forecast for the next 12-18 months. Analyze demand and update the forecast day-by-day. Update rooms and ADR, and if the hotel works with total revenue, update the forecast for all revenue sources. While updating the forecast, the revenue manager will also discover where it is necessary with price adjustments or other actions to stimulate demand for the hotel.
Analyze and comment
Hotels distribute revenue to the stay day or when guests consume the products or services. The hotel PMS, POS, and other systems automate this with the correct settings in place. Immediately in the morning the first day after the month ended, collect, analyze and compile all the data the hotel needs for analysis to better understand what happened the month that just ended. In a system such as Demand Calendar, the system automatically collects and pre-analyzes data, so the revenue manager can easily add comments to explain all the figures. The report is then ready to distribute to the management team in the hotel and top management in the hotel company.
- The complete monthly report includes
- Actuals for the month
- Actuals for the year to date
- Forecast for full fiscal year
- Total revenue and by category
- Room statistics
- Market data
- Pick-up/sales for the next 12 months
- On-the-books for the next 12 months
- Forecast for the next 12 months
- Comments about the month
- Comments about the year to date
- Comments about the forecast
The hotel CFO can use this report for financial planning for the next 12 months and produce a reasonably accurate profit and loss forecast for the fiscal year and the next 12-month period.
Deeper commercial analysis
The final step is to analyze segments, customers, campaigns, customer acquisition costs, and other details to learn what worked well and what needs improvement in the future. This analysis is for the commercial team to update plans activities and re-allocate resources to actions with a higher investment return. By taking a closer look at the forecast, the commercial team in the hotel can take action before it is too late and be ahead of the competition. If these actions are successful, they will show in the revenue figures in future reports.
The deeper analysis is also to look at each team member's performance measures. The purpose is to discover areas where each person needs more coaching or help in achieving the targets rather than starting a blame game. The hotel industry needs to hold on to talents and ensure they are adequately trained and have access to the correct information and the right tools to get their job done faster and more accurately.
The financial reports are essential to understand the hotel's historical performance better, but they do not tell much about the future. Therefore, the monthly commercial process is crucial for the hotel's future success. Without a fast and accurate assessment of the future outlook, the hotel risks running into financial trouble without prior warning signals.