Net profit is the main goal of business, and every manager should know how to influence this indicator. So, according to Andriy Marenchuk, managing partner of Ribas Hotels Group, it is possible to increase hotel profits using effective management, in particular, relying on financial planning and analytics.
Financial planning
Creating sales plans, marketing strategies, and building a team interested in achieving goals are important elements of financial planning. Usually Ribas Hotels Group calculates a budget for a year. Now, given the situation in the country, it is for the quarter. What is the purpose? To understand what the funds are used for, what can be optimized, at the same time, so that it does not affect the quality of service. It's better to spend a few weeks on planning, thinking, discussing with the team and partners, but to have a goal for the year.
"When we work with implemented hotels, it helps us a lot to analyze previous experiences. We try to understand how we can optimize existing costs. For example, in the hotel Ribas Duke Boutique Hotel (Odessa), which we took under the management, before us there was overstaffing. We have been working with the object for 7 months, and during this time, thanks to planning, profits have increased, numbers have become better, "- said Andrei Marenchuk.
When developing a revenue plan, you need to understand what will get you to that number. You should also tweak your marketing strategy and understand what kind of sales plan you have that will help you achieve that financial goal.
The cost part should be planned in a similar way - to create a plan and cost limits, taking into account the need for them and their optimization. For example, you will calculate what your hotel should use at an average occupancy of 1 m³ of water, and if this number is exceeded, you will already look for the reason - perhaps there was a water leak somewhere, etc.
Photo: Freepik
It is also important to communicate the hotel's income not only to the manager and department heads, but to the entire team. The hotel owner should tell the employees about the hotel's performance, because that's when you move together toward common, clearly defined goals.
"People also need to know how their performance will be evaluated. For example, our managers' KPIs are budget execution, reputation, employee turnover, and property security. We capture these four metrics monthly, quarterly and annually. At the same time, we let managers make decisions on firing, hiring, bonuses, ets. within their competence," commented Andrei Marenchuk.
Maintaining analytics
The hotel manager should keep a close eye on all performance indicators. There are a lot of BI systems now that help bring all the analytics into one dashboard. You need this in order to understand the target. Analytics is a very important tool for all departments. There are many services for analysis: Google Analytics, SEO analytics, PPS analytics, PR analytics.
In sales, it's similar: assess the number of calls and the quality of communication in order to understand how to increase the number of bookings at all stages.
If you analyze all the processes, it will be easier for you to communicate with your employees and go towards your goals together.
Pictured: Helios by Ribas
Case: Helios by Ribas Hotel
Consider the issue of increasing profits on the example of the hotel Helios by Ribas (Polyanitsa village, Ivano-Frankivsk region) with the feedback of the owner of the hotel about the cooperation with the management company.
Ribas Hotels Group has been managing the hotel since May 2021. By the time the company entered the project, it was already in operation. It was managed by the owners at their own discretion, but since it was not their core business, they turned to the company for help.
"We opened the hotel in 2017, its construction lasted 3 years. Our main activity is agriculture, but we are constantly looking for new ideas and projects. Given the recommendations of friends and the lack of time to monitor the operation of the hotel, I came to the decision to work with Ribas Hotels Group. The seasonality of the work and the search for staff takes me out of the rhythm of my core business. Therefore I rely on professionals. The main request of the Ribas Hotels Group was integrity, as well as maintaining the hotel in its original form, progress in development and innovation," said Yaroslav, co-owner of Helios by Ribas.
Before we started working with the hotel, its indicators were lower, given the lack of a specialized management company. "We started the work in this object with an analysis of the product: we found out what kind of hotel it is, highlighted the potential portrait of its guests. Then we began to change the component of the restaurant, the configuration of the rooms, the services provided in order to increase the value of the room and provide the service that guests expect, "- said Andrei Marenchuk. Ribas Hotels Group was also engaged in creating a new marketing strategy - a lot of money was invested exactly in the promotion of the hotel. In addition, the company hired and trained a new team. Since the beginning of the management of this object it was able to increase rates by 70%.
Pictured: Hotel Ribas Karpaty
Case: Ribas Karpaty Hotel
The next case is Hotel Ribas Karpaty, located in Polyanitsa village (Ivano-Frankovsk region), Bukovel.
Ribas Hotels Group accompanied the design and construction phases of the hotel, which lasted almost 1.5 years. This is quite a short period for such a project, but the goal was clearly set: to build the hotel by the winter season so that it would immediately begin to bring profit. In general, it turned out that way - it opened on December 20, 2020, in the high season, and did not work a single day at a loss.
"The fact that the hotel was built qualitatively and on time is a fact. That's why I think that you can dream about anything and everything, but it's up to professionals to make your wishes come true," said Alexei, the owner of the Ribas Karpaty hotel.
The hotel has been steadily reaching a break-even rate of 10-11% for more than 2 years with the management company Ribas Hotels Group. "The hotel shows good results, in my opinion, also because of the location, on the choice of which we spent more than a year with Artur Lupashko, the founder of Ribas Hotels Group. I do not know any other resorts in Ukraine, which are developing so dynamically in spite of all disadvantages - pandemic, war. Moreover, we allowed Ribas Hotels Group to implement all the right things in this project. Everything was as the team insisted and showed", - said Alexey.
Photo: Freepik
Choosing a management company
"I think all of our partners are very smart people, because turning to a management company is the best decision they could have made for their hotel," said Andrey Marenchuk. A management company is, first and foremost, a guarantee of profitability for the property and a reduction in control points for the investor. These are professionals to whom the owner can entrust his or her property, controlling only the most important issues. How to choose such a company? Yaroslav advises to listen to the recommendations of those people who themselves are clients of the management company. "Also pay attention to the consistency of the staff. Take into account the transparent access to the hotel's accounting and programs - these are the control points. I would recommend not on paper, but in real life to conduct secret checks of the integrity of the staff (all the links), and in addition to the form "The budget for the next period" to introduce such a format of hidden control as "Analysis of the causes and conditions that were the basis for failure to implement the budget or profit shortfall", - commented Yaroslav.
We are ready to cooperate! Ribas Hotels Group has been managing hotels for more than 9 years. In complex management and exclusive booking of hotel operator Ribas Hotels Group there are 26 objects. Ten of them the company has designed and built. Total we have more than 1000 rooms. We can share our experience and help you to realize your dream project, demonstrating the declared indicators. Make it happen with Ribas!
Operational management of the Ribas Hotels Group hotel. More details follow the link.
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