During a Recovery Connections session on Dec. 9 — part of HSMAI’s Road to Recovery 2020 program — Chesapeake Hospitality’s Cassie Bond, CRME, SpringHill Suites by Marriott & TownePlace Suites by Marriott – Los Angeles / Manhattan Beach’s Jacqueline Pirotta, and Hilton’s Kristen Stampe joined Tim Wiersma, CRME, to discuss “From Revenue to Profit: Can You Make the Shift?” Wiersma shared key insights from the session during a recent interview with HSMAI.
What were your takeaways from the session?
With the pandemic, what it’s taught us from a revenue standpoint is that we need to be laser-focused on profit. We’ve been moving on it slowly, but the pandemic brought it to the forefront quickly. Everything changed based on the number or rooms, turnaround, staffing, and level of services that we’re offering, as well as maintaining a clean and safe environment, so the costs are greater to maintain a room.
We have to focus more on the cost per available room, variable cost components, drawing into the P&Ls and understanding those variable components. We also have to have a solid understanding on the cost of acquisitions. If that’s through a marketing campaign, then you need to be conscious of ROI. If you’re booking business through opaque channels, then understanding the cost per channel basis is important.
From the staffing point of view, most hotel companies are doing more with less, so if, for example, a revenue manager had two or three properties they were in charge of, now they are in charge of six properties, so they may have scaled back responsibilities to accommodate that.
We also talked about technology and the importance of taking P&L over expense components into account when it comes to analyzing business. It’s hard, because we don’t have any great data since the historical data doesn’t mean anything at all anymore and trying to find a current trend is difficult.
Was there anything that a panelist said that really stuck out to you?
I think it was Kristen who suggested that revenue managers spend time with directors of finance and sit in P&L meetings to have a solid understanding of P&L itself and speak fluently to it. And then she also mentioned that having the owners’ mindset in mind, so that they’re trying to stay afloat and keep cash flow going. Oftentimes owners are just looking for assurance that the operations group has a strategy in place.
Another thing that was mentioned was reevaluating the type of business you’re accepting. Jacqueline said that they’ve increased the number of extended-stay customers at their properties but are being more selective as to who they accommodate. Certain customers are not good for their properties and sometimes they don’t respect the property, which can damage its reputation, so we’re all trying to be conscious of that as well as holding the line from a pricing standpoint wherever possible.
Also, one of the questions I asked was what advice you have for revenue management leaders with a finance background, and someone reinforced taking the CHDM course to reintroduce the operations piece and finance piece and understand the owners’ mindset.