The Resort at Squaw Creek is an award-winning luxury ski resort in California's Squaw Valley. The full-service resort operated by Denver-based Destination Hotels & Resorts recently completed a $53 million renovation to all 405 rooms and suites. Yet a team of corporate executives including general manager Richard McLennan knew that a good looking hotel wasn't enough to satisfy discerning clientele; it had to operate extremely well, too. McLennan and the DHR executives decided the resort needed a more sophisticated and comprehensive labor management system.
"From corporate perspective we always look for tools and processes to help the hotels manage their business," says Brad Hayden, vice president of finance for Destination Hotels & Resorts. Three years ago, he and the team reviewed five labor management systems. "We were looking for a solution that could help managers identify the fluctuations in their business and make sure that they have the right number of staffers there at the right time," says Hayden.
Destination Hotels & Resorts uses a decentralized financial and operational model, which gives individual properties more management flexibility Ã.‚¬" and can create more challenges for corporate oversight. DHR sought a solution that could provide detailed information on the company's diverse portfolio of hotels.
The team selected Heath and Company, an Atlanta-based management consulting firm that specializes in productivity solutions for the hospitality industry. Founder Dave Heath and his team focused on how the resort could control labor costs while also improving efficiency and service. In May 2008, McLennan and the Heath and Company team installed a suite of software modules called OnTrack, which is one part of Heath's labor management system.
Defining resort service standards
"When I first got here, the resort was operating with an old and conventional system that was not comprehensive," says McLennan, who had worked with Heath and his software systems at other resorts. Among the first steps: Define the resort's service standards. The Heath and Company consultants, acting as facilitators, assisted the management team to develop and commit to paper labor standards for each resort department. Labor standards serve as guidelines for staffing every position in the hotel at every level of volume. The consultants had a lot of areas to cover.
Heath and Co. installed a customized suite of web-based software tools that help hotel operators manage labor, maintain quality and improve profits for owners. Together, they're called OnTrack. The individual modules collect and analyze data in distinct areas.
- GamePlan is a decision-making tool that helps predict daily business volume, particularly in hotel restaurants, bars, spas and golf operations.
- PeakPerformance provides staffing guidelines for each job at every level of customer volume.
- TeamWork is an automated scheduling tool that insures that quality levels are maintained and financial objectives are achieved.
- InsideView presents the relationship between business volume and labor hours in a unique graphical format.
Managers at the resort can forecast revenue and room nights and use those standards to forecast payroll. After reviewing the results, the team can make adjustments when necessary.
McLennan began to see payroll savings "within about a month of implementation," most notably in the departments of housekeeping, banquets and food service. In the first year, the hotel achieved savings of 2 to 3 percent of total salaries and wages. McLennan notes that the system paid for itself within four months.
The resort is not only more effectively managing its payroll, but it is also improving the quality of service. "If you have a system in place, your planning and your execution are better," McLennan adds. "If you don't, you're kind of winging it."
Now the resort's management conducts a weekly forecasting exercise for the following week. Every Tuesday, managers from every resort department are provided key decision-making information enabling them to generate an informed forecast for their areas, which includes such information as the hotel's occupancy, the number of total guests expected, banquet events and so forth. The food and beverage department will analyze every meal period and even the retail store managers weigh in. A resort-wide meeting is held every Thursday.
"By Thursday afternoon, the forecast and the employee work schedules are complete and are posted at the end of the day for all employees to see their schedule for the following week," says McLennan. Top levels of management are able to view a virtual "snapshot" of the operation in its entirety. From his office in Denver, Hayden said he "can look at the properties and track where they are from a corporate perspective. It's not necessarily a big brother approach, but it is very exciting to see how the properties are maximizing the use of the tool."
Additionally, the hotel staff has taken well to the new structure. "The system is very easy to use. It doesn't take long for the staff to be trained," says McLennan. As the employees use the programs, they have developed insight into the variables that can affect business.
"Our managers now understand labor management, staffing guides and the impact of these methods on labor costs," says McLennan. "Our payroll has dropped significantly and the level of management expertise of our staff has increased dramatically with this system."
The Resort at Squaw Creek was the first of several Destination Hotels and Resorts properties to implement a Heath and Company labor management solution. Now other hotels in the portfolio use the system, including the Inverness Hotel and Conference Center, the Estancia La Jolla Hotel and Spa, the Sheraton Universal Hotel; other installations are underway.