Use the latest benchmarking techniques to find hidden profits.
It seems like a paradox; profitable hotels that are inefficient, and unprofitable hotels that are efficient! While there is generally a correlation between efficiency and profitability, we often find profitable hotels hiding serious inefficiencies because they have enjoyed buoyant market conditions; factors outside the control of management. Similarly, we have found unprofitable hotels that were highly efficient!
The most effective efficiency analysis is, therefore, one that controls for external factors and matches a hotel’s performance on its internal, controllable factors. Because no two hotel markets are the same, evaluating a hotel’s performance and efficiency is one of the most challenging issues facing management.
Making use of frontier analysis and optimizing techniques, investors can control these external factors and identify significant annual expense savings not identifiable with traditional financial and operating ratio analysis! These single-factor productivity measures are less than optimum because they fail to take into account the interaction between multiple inputs and outputs.
Our hotel portfolio efficiency & productivity services can assist clients:
- identify star performers to locate “best practice
- identify under-achievers to locate “poor practice
- set realistic, peer-based improvement targets
- uncover the largest potential efficiency gains
- allocate resources more effectively
- inform strategy development
- monitor efficiency changes over time
- identify where to give rewards for good performance
This technique has become an increasingly popular management tool for evaluating and improving lodging operating performance since the mid 90’s.
Call us today to see if your business can benefit from our Hotel Portfolio Efficiency & Productivity Analyses on 973-723-0423
“I found your analysis and findings very helpful in quantifying efficiency and productivity across our portfolio and identifying hotels that were demonstrating best practices within our group. Our response to the study will deliver value to our managers and shareholders over the long-term. I’ll look forward to the next time that we work together.”Jay H. Shah