The pandemic hit the hospitality industry hard. Not only did travel come to a near halt for a long period of time, but when it restarted, hotels had to adjust operations to adhere to continually changing cleaning, training and health reporting regulations implemented by the CDC, OSHA and the American Hotel & Lodging Association. They had to adapt quickly or close their doors.
Early this summer, travel was getting back on track in parallel with the acceleration of the vaccine rollout, and hotels were poised for a strong comeback. But a greater level of uncertainty was reintroduced with the spread of the Delta variant and, again, customer demands shifted, and guest occupancies have fluctuated.
Remaining operationally agile is important, even in the best of times. With new variants extending the global pandemic, there are additional challenges facing the hotel industry. Having the right back-office technology in place is crucial, as hoteliers must make strategic decisions in real-time. Having as much visibility as possible into financial KPIs and business operations is critical. From predicting cash flow to quickly breaking down costs and adjusting staffing levels, having a modern, cloud-based financial management system is no longer a ‘nice-to-have’ option for hoteliers looking to recover from 2020 – this technology is a requirement to navigate the still ongoing pandemic.
Unlocking Financial Answers with Real-Time Data
Data is the key to recovery, especially for the hospitality industry. With data often spread across multiple properties and a variety of systems, hotel executives have become accustomed to the long wait for accounting teams to retrieve the numbers they need to make operational decisions. It can often take weeks with multiple staff members moving data across dozens of systems to present a report on anything from occupancy rates to quarterly budgets. By the time the data is ready to be presented, it’s frequently out of date or the fundamental question you were hoping to answer has changed.
Thankfully, modern financial management software solutions can exponentially reduce the time needed to access the data required to make decisions. Cloud financial systems offer easy connection with other business systems in place, allowing finance teams streamlined access to key metrics. From budgeting numbers to sales forecasts and cash flow, these numbers hold a wealth of value for hoteliers.
With so many factors impacting the financial health of hotels – including room rates, guest occupancy numbers, staffing levels and associated costs – it is important to use a financial system that makes it easy to combine financial and operational data. Having this information readily accessible allows finance teams to quickly identify and capitalize on opportunities that they otherwise may have missed, such as an outperforming location or concept, helping hotels continue to refine their post-pandemic business models using real-time results—not hunches.
Creating Business Flexibility to Stay Ahead
One of the most compelling outcomes for the hospitality sector through the pandemic has been the rapid adoption of new ideas to help save the bottom line. As regulations continue to shift, and customer demands and industry trends evolve, hotels need to be current on everything from changes in safety protocols to smart tech features and unique brand experiences. While data analysis is helpful for finance teams determining how feasible – or expensive – these changes may be, the data itself must be transparent, easily digestible and, crucially, actionable.
A good example of this is Benchmark, a global hospitality company with more than 50 properties and 80 entities. Before investing in cloud financial management software, Benchmark had limited insights into their portfolio performance and budget forecasts and found it difficult to make informed decisions on business operations. Moving to cloud financial management software enabled Benchmark to streamline processes and gain access to real-time data for in-depth reporting and decision-making that has led them to a massive increase in growth, efficiency, and scalability. The increased visibility into their business has allowed the company to maximize revenue potential and streamline processes resulting in $800k in time savings per year. Rather than spending hours compiling detailed data from multiple systems surrounding occupancy, operations, and more, Benchmark utilized transparent technology solutions to save invaluable labor hours.
Reallocating hours previously spent on tedious tasks is not the only upside to investing in these types of technology solutions. Accurate financial data with clear insights into existing processes can also lead to new revenue streams. Technological solutions can help identify where money should go, taking into account cash flows, wages, customer demand, and more. Instead of manually sorting through bulky spreadsheets to identify which locations are seeing the largest increase in room reservations, integrated technology systems can quickly deliver accurate results in real time. The increased data visibility and actionable analytics empower the reallocation of revenue where demands are highest, like special services for guests and high-value amenities.
The Road Ahead
Still facing a long road to recovery, the hotel industry is ripe for a technological overhaul – and though many will automatically think of air filtration systems and new cleaning technology, the back-office systems that enable better, more nimble decision-making are just as key. By implementing new solutions to deliver real-time data and increase visibility, hotels can cut costs, improve strategy, and even create new revenue opportunities. Ultimately, the hotels that invest in the technology that their guests don’t see will provide the best experience, rebound the fastest and recoup the most revenue.
ABOUT THE AUTHOR
Susan has more than 20 years of experience across hospitality and technology businesses. As the Hospitality Industry Principal at Sage Intacct, Susan drives strategic product and partner direction, drives brand awareness and facilitates sharing of best practices to empower hospitality businesses to succeed with best-in-class financial software solutions.