Cycas Hospitality, a hotel management company based in Amsterdam, The Netherlands, currently operates 27 properties across Europe. It recently introduced a new business technology platform and began in-sourcing Cycas’ finance function in order to provide its partners with complete visibility into each hotel’s performance across every department at any given moment.
In a recent blog post, Peter Habelitz, CFO of Cycas Hospitality, explains that his “vision was for Cycas to be industry-leading not just in terms of the finance services we provide, but also for financial analysis, business intelligence and business insights.”
To accomplish this, the brand invested in a business technology platform that ensures key stakeholders have access to real-time information on all aspects of the business. Because all departments and most of the company’s systems are included, it’s able to present results 75% faster than before.
“As a result, our owners benefit from a live, comprehensive and fully-automated daily synopsis of each hotel’s individual performance. As well as covering everything from finance and market data such as STR and HotStats to revenue details, including segmentation and geo data, it even incorporates operational data such as energy consumption,” Habelitz says.
To learn more about the benefits of finance technology, Hospitality Technology spoke further with Habelitz.
How has hotel finance technology evolved over the last few years?
While there have been industry-wide developments focused on improving revenue management analytics, as well as new property management system (PMS) providers, I have not seen any significant developments in finance-specific hotel solutions.
There are a couple of companies out there that are on the right track, however this is still an area with a huge opportunity for innovation. That said, it’s just as important to find a way to collect, analyse and make use of the data that companies already have access to today as it is to have the best systems in place. I think this is where hospitality can learn from other industries, such as the big tech companies, and has the potential to evolve most.
As such it is up the hospitality companies themselves to start evolving, as we have done at Cycas over the last 18 months, by combining different industry-specific and non-specific pieces of technology into an innovative and highly capable system that maximizes our ability to access and analyse data.
I strongly believe that the route to success is creating an IT eco system that combines the best-in-class technology – industry-specific or not – and enables the company to access, analyse, draw conclusions and benefit from the wealth of data it already has in its armoury; often unknowingly.
This is not only about bringing together financial data, but rather all data that is available to a company. As such, it is important to look outside the confinements of “finance technology” or “finance solutions” and think about wider business technology.
What should hoteliers be looking for in a finance tech solution?
Finance is rarely seen as a value-adding function, but more as a necessary evil – and one that perhaps even has a reputation for introducing processes that stand in the way of doing business. Changing this perception is one very important step to create acceptance and enthusiasm about finance tech solutions across the entire organization, from operations to sales or development.
The finance department is the place where all the information flows together, and at Cycas we have recognised this and sought to make sure that finance is truly at the heart of the company, adding value to the rest of the team by introducing the right technology and systems that make everyone’s life easier.
So, one of the first things to ensure is that a new solution does not create more work, but rather reduces manual processes. In general, it should be seamless and automated, even on the lowest level, to help frontline users truly understand the benefits it can bring them.
To give an example: it starts with the way revenue figures get moved from the PMS to the accounting systems and on to a reporting tool. This should happen without anyone moving a finger, so that a General Manager (GM) can check their hotel’s performance from the day before on his mobile as soon as he arrives at work. And, ideally this overview will be combined with even more data from additional sources, from guest reviews and labour efficiency to energy consumption, for the ultimate overview.
The second point is think first, then act: When Cycas started a project to implement this kind of system, we knew it was key to get a very thorough understanding of the underlying data. We therefore spent months gathering and analysing the data flows coming in and defining a data governance structure to ensure a consistent and accurate data set. We also liaised with internal stakeholders, from hotel operations teams to the executive team, as well as external stakeholders, to help us create a reporting structure that genuinely fitted the needs of the target audience.
Ultimately, it is more important to have a solid foundation of data and processes and a clear plan than choosing a solution first and then trying to make everything around it fit. There are a lot of products on the market that can do a lot of good things, but knowing what I have, what I can do and what my limitations are, will help me far more than paying the highest price for the “best solution”.
However, the one thing that a solution in today’s world needs to be able to do is seamlessly integrate into the whole system landscape to reduce manual interference, which is usually the root cause of quality problems or late delivery.
By reducing the amount of time our teams spent compiling reports and automating certain processes also frees people up to focus on other ways to improve the business, both at a hotel and department level.
How can having visibility into hotel operations help hoteliers save money? Improve the guest experience?
Timely and accurate visibility of every aspect of the business will help identify problems or inefficiencies quickly and avoid unnecessary spending. Everything from unusually high energy costs to deteriorating guest satisfaction levels will have a financial impact, and the quicker and easier the relevant team can see his, the quicker it can put in solutions to rectify it, and the more money it will save the company.
If I only receive this information in a big reporting pack two weeks after month end, it might easily get overlooked amidst the sea of information. And even if it’s spotted, you’ll already have lost 4 to 6 weeks to make the necessary amends. Having everything available daily and within a few clicks means that department heads – from GM to CFO - can react immediately.
And guests will have the best experience when a hotel’s operations run. The benefits of a well-designed finance solution can range from enabling the hotel team to immediately react to guest feedback, identifying technical issues from energy, maintenance or housekeeping data or problems in the F&B outlet, based on consumption or food cost/waste data.
How can finance tech help hoteliers struggling due to COVID and then with the surge of vacationers afterwards?
It is very important to be able to react quickly in a crisis like this. And the ‘cash is king’ saying is especially apt in times of crisis when it’s all the more business-critical to have a sound cash management practice in place and the industry is experiencing such challenging conditions.
Having full visibility on the cash needs and availabilities is obviously the single most important thing if you want to survive. Any finance tech that can support this is essential to any hotelier, and the proprietary systems we introduced played a key role in helping us forecast requirements on a consolidated basis for both our day-to-day operational business as well as for new projects, while also allowing us to improve our modelling and forecast accuracy.
The need for an easy and fast way of adjusting forecasts and plans was even more emphasized by the COVID crisis. We have learned from this and developed a solution that will help Cycas to plan in scenarios and change these within minutes, not days. This flexibility will enable us to react quickly to new developments; something every hotelier would benefit from.
To summarize, the pandemic certainly helped highlight the benefits of having a full business overview at any given moment. The new capability for integrated simulations and being able to reforecast in just five minutes would have helped scenario planning in the early months and has reinforced the value of having the most flexible business intelligence tools.
Any other comments?
Big data, automation and artificial intelligence have been buzzwords in the last few years, and rightfully so. They are already playing a huge role in a lot of other industries, and I think the hospitality industry still has quite a way to catch up and properly utilize modern technology in the same way. This relates to finance technology as well as any other areas, but given that a lot of information comes together in the finance systems, it makes sense that the finance function is leading this development.
However, that does not mean, it is all about finance technology. When we started the journey with Cycas to create a system landscape that is industry leading within the hospitality sector and can compete with a lot of other industries, we specifically choose an industry-agnostic “business technology” solution rather than a finance technology solution. It gives us full freedom and flexibility in accessing data across the entire organization.
To think outside the box and confinements of “finance” technology is a recommendation I want to give to everyone embarking on a similar journey: it is key to see your organization as one big organism that should be managed and seen as one.