HAC panel on profitability

Yield management, sales management budgets and business plans all affect the operating success of a hotel.

Left to right: Robert Pratt, Didier Oboeuf, Michael Jackson, Philippe Gadbois, Scott Allison, David Larone.

Left to right: Robert Pratt, Didier Oboeuf, Michael Jackson, Philippe Gadbois, Scott Allison, David Larone.

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Yield management, sales management budgets and business plans all affect the operating success of a hotel. At the HAC conference, Robert Pratt of Coast Hotels, Didier Oboeuf of Groupe Germain, Michael Jackson of Easton’s Group of Hotels, Philippe Gadbois of Atlific Hotels and Scott Allison of Marriott Hotels of Canada all shared their ideas on profitability in a panel moderated by David Larone of PKF.

Pratt spoke about the importance of business plans, saying he was surprised at how many organizations don’t have one.

Everyone has a role, he said. “The owner wants ROI, ongoing investment and an exit strategy. The management looks at profitability as part of a balance it strikes between the guest and employee loyalty. GMs have to collaborate with hotel teams to determine what’s achievable, but stretch targets.”

Allison noted it is important that the team understand key metrics and stay on top of the numbers.

Gadbois said that the planning process has changed. “Fifteen or 20 years ago, forecasting was easier to do because it was governed by the past; now we’re trying to project.”

“The biggest mistake people make is to plan with a full look in the rear view mirror,” said Oboeuf.

“The ability to react is as important as our ability to plan — as long as the plan can be adjusted. Planning beyond three months is like the weather channel!”

The success of a plan depends on whether the bottom line is meaningful to various members of a hotel team. Front desk staff can understand the benefits of upselling a room, but for a room attendant, that’s not important, said Jackson.

Gadbois told the group that at one point he had an epiphany, realizing that our customer today is not really loyal. Many customers have platinum or elite status in two or three loyalty programs.

The important things are location, type of experience, value for money and recognition. “Those who do better at those basics will win,” he said.

Whether it’s a hockey group or a large Fortune 500 company, hoteliers need to understand who their customers are by segment, Allison said.

The key, said Pratt, is maximizing the business mix. “We look at so many different factors to define the optimal business mix. We have to tweak that.”

“You cannot save your way to prosperity,” said Jackson. “If you put more in the top of the funnel, it’s a whole lot easier at the bottom.”

“Keep it simple,” said Oboeuf. “Believe in your people and they’ll take care of business for you.”