To ensure success, the general manager must focus on planning

17 February 2022
During the pandemic, hotel companies lost many of their talents to different industries. These talents are not coming back soon, if ever. Many other industries have better working conditions, higher compensation packages, are better organized to make work more manageable and planned.
The lack of available talents is tricky for hotels when demand starts returning to the same levels as before the pandemic. This problem seems to surprise the hotel industry since no one could imagine employees leaving the industry for other jobs. Other industries continued to grow during the pandemic and attracted employees from the hospitality industry, which is not as attractive as it used to be.

The old mentality needs to change

I have been surprised by the lack of planning in hotels ever since I started working in the industry over 30 years ago. The hotel mentality focuses on solving today's problems, ensuring that all guests are happy. There are many problems because guests require different things, and hotels need to be alert to ensure that the following guest review will be positive. Guest needs are unpredictable, so it is a waste of time to do too much planning. I believe that hotels need to make guests happy, but planning would lead to even more satisfied guests and higher profitability for the hotel. Planning is everything for sustainable success.

Future focus

The key is to look into the future to understand changing guest behavior, such as booking windows, distribution channel preferences, package content, rate sensitivity, and general guest requirements on the hotel product and services.
 
Another important future focus activity is forecasting. A solid forecasting process is the starting point for planning, such as marketing and sales activities, purchasing, operations planning, cash flow budgeting, and financial planning.

Forecasting for success

There is probably a misconception about forecasting. It often gets mixed up with making a prediction. The problem is that when someone makes a prediction, that someone wants to be correct. Forecasting is not about accuracy and being right. Instead, based on the information available today, the primary purpose is to forecast to understand the future. Hotels should use the forecast as a base case for planning. When the forecast changes, and it does, especially long-term projections, the hotel should update the plan. When the forecast shows a gloomy future, the hotel should try to make the future brighter. There is nothing to discuss without the forecast, no ideas for when activities would make a difference, and no guidance for purchasing and labor scheduling. With all the benefits of forecasting, the management should re-instate forecasting to work on taking preventive action to minimize future problems instead of continuing to solve today's issues over and over again.
 
A hotel should have at least a 12-month rolling forecast updated regularly, weekly, monthly, and quarterly. Here is a link to our version of the ideal weekly and monthly forecasting process.

Modern systems part of the solution

Future focus requires modern, simple systems and tools, easily accessible for everyone who needs to make decisions. Too complex systems that depend on a skilled and knowledgeable person will only make hotels too dependent on one employee's willingness to share information. The typical set-up with homegrown Excel models can only show a fraction of the information needed in today's hotel business. There are many much better systems for forecasting than Excel. The modern way of working is about sharing information and working as a team. Using the same information for planning will significantly improve profitability. The pandemic forced the hotel industry to change, and better forecasting and planning will hopefully permanently change for the better.