IHIF Profit Management Panel reveals solutions for increasing hotel profitability

Over 100 audience participants joined the Profit Management panel at IHIF on Tuesday, 7th of March 2017.

Since the year 2000, data shows the GOP improvement has being dramatically lagging RevPAR improvement across a significance sample of hotels in the UK, according to Jonathan Langston Co-founder of Hotstats.

Recent trends show an increase in RevPAR and a decrease in gross operating profit performance across many markets.

Recent trends show an increase in RevPAR and a decrease in gross operating profit performance across many markets.

According to the panelists at the Profit Management panel hosted by Jonathan Humphries, Senior Lecturer at the École hôtelière de Lausanne and Chairman of HoCoSo, the reasons are many – ranging from increasing OTA’s share of the business, minimum wage increases, to ultimately a more complex and competitive operating landscape. However the question posed by Jonathan Humphries, was “what can be done to reverse this trend?” The panelists had a lively discussion and identified the following possible solutions:

  1. Michael McCartan MD from Duetto proposed creating customized pricing packages for every single guest, for every single stay.
  2. Max Luscher MD from B&B Hotels suggested selective outsourcing where service, quality and also costs can be maintained.
  3. Jonathan Langston Co-founder of Hotstats recommended the use of benchmarking and KPIs to identify positive operating trends to communicate best practices for improvement.
  4. Stephen Cassidy SVP from Hilton suggested creating centers of excellence, in areas such as Revenue Management, collaborating in off-site shared locations.
  5. Ken McLaren EVP from Interstate, proposed instilling a culture of owner-profit-driven focus on the business with every operational employee.
  6. Carl Olsberg VP from Choice Hotels, suggested that owner’s interests are balanced through transparency of distribution costs and selective use of performance measures.

Overall, there should be a focus on creating solutions to maximize profitability, therefore alignment with owner’s interests is absolutely key.

As an industry, it was agreed that we need to stay relevant. Given the challenges we face today, we have two choices: 1) do nothing; or 2) do something different. If we do nothing, we will be unable to reverse the trends; however if we do something different, we have a chance to be more profitable, survive as an industry and of success.

By Jonathan Humphries

Chairman of HoCoSo

Senior Lecturer at the École hôtelière de Lausanne

Trend of lower hotel profitability - IHIF Profit Management Panel revealed solutions

About HoCoSo

HoCoSo is a Swiss-based company providing solutions for hospitality industry, with a focus on the following areas: investment, development, asset management and advisory services within the extended-stay hotel and serviced apartment sectors in Europe; hotel development and investment in Africa; and student and executive hospitality education globally.

Jonathan Humphries is the Chairman and Owner of HoCoSo. He brings together teams of global experts to suit a client’s needs.

Jonathan Humphries has almost twenty years’ experience in the hotel and real estate sectors.  For the last eleven years he covered EMEA region, supporting the expansion of Marriott International’s fifteen brands. He brought a tailor-made extended-stay Residence Inn by Marriott concept to Europe in 2008. He has been engaged on major acquisitions, renovations, extensions, re-brandings, contract extensions and terminations and created strategic road maps for both countries and cities across EMEA.

Phone: +41 (0)78 661 61 72
Email: Lanazhang@hocoso.com
Web: www.hocoso.com

By | 2018-02-16T13:00:29+00:00 March 10th, 2017|HoCoSo, IHIF|0 Comments

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