In any business there is a group of KPIs, Key Performance Indicators which help the decision makers to evaluate performance. In hospitality, a Hotel Performance Analysis is required further, to help you identify issues, opportunities, and prepare a strategy for improving performance. Performance Analysis can adequately support the needs of your organization capturing additional factors such as innovation, and a more holistic view of your hotel’s benchmarking, pinpointing your brand’s strengths. It identifies areas where you need to improve, by providing a clear understanding of your positioning and how you set yourself apart from the market.
Evaluation of hotel performance is based on pillars of Innovation, Process, Quality, Guest, Revenue, Employee, and requires careful examination of your business viability, stability and profitability. Innovation is a key element for hotels as it has the capacity to transform the industry positively, adopting innovative technologies such as phone-as-key-cards, mobile self-check-in, hotel service optimization systems, guest’s device connectivity tools, tablet menus, etc. Differing from product innovation, service innovation models have increased operational efficiency and created value for customers. Service innovations can predict customer needs and wants, increase loyalty, efficiency and productivity, while reducing waste.
By adopting a Lean Thinking in your business, you can drive Innovation which can increase productivity, boost profitability and improve guest experience. Lean Thinking focuses on enhancing value for the guests, improving and smoothing the process flow and eliminating waste. It encourages creativity, increases the volume of new ideas, and provides continuous support for the implementation.
Lean Thinking can help hoteliers innovate and transform their organizations by building a new working mentality and setting up systems which drive continuous improvement, in the following ways:
- Focus on the guest: Focusing on adding value for the guest is important as only 15-20 percent of the process steps add value, therefore this process helps you realise the potential waste in your organization. As you improve your performance in meeting the CTQs Critical to Quality, you are also likely to retain further business and increase your market share.
- Identify and understand operations: By drawing a map of the value stream which describes all the steps in our service process, we can highlight the non-value-added steps and areas of waste and ensure the process focuses on meeting the CTQs. To undertake this, we need to go to our Gemba, the place where the work gets done, where the action is and spend time in order to see how the work really gets done and not how we think it’s done. This process helps us analyse the problems and determine a more effective solution for our day-to-day activities.
- Manage, improve and smooth the process flow: This concept identifies the non-value-added steps in the process and removes them to ensure they do not delay value-adding steps. It can be an essential element in avoiding bottlenecks, overproduction, and waste. Remember that non-value-added steps can be identified anywhere, front of the house as well as back of the house.
- Remove non-value-adding steps and waste: After performing a value-added analysis and reviewing your processes you can see if any non-value adding steps can be removed. Types of waste can be broken down into seven categories: Transportation, Inventory, Motion, Waiting, Overproduction, Over-processing and Defects.
- Manage by fact and reduce variation: Measuring the right things in the right way, helps you manage by fact, using accurate data and avoiding jumping to estimations and conclusions. Data collection helps you to understand the process variation and know when to take action and when not to.
- Involve and equip the people in the process: If you like your organization to be truly effective, it requires a different thinking on understanding the people’s issues. You must involve the people in the process, equipping them to both feel and be able to challenge and improve their process and the way they work.
- Undertake improvement activity in a systematic way: Define, Measure, Analyse, Improve and Control, DMAIC method is used to improve existing processes, where for a new process you need to Design and Verify. This will help you analyse the situation by using facts and data to determine the Root Cause of the problem that is inhibiting your performance. Then you can identify potential solutions, validate your approach and implement the solution.
Lean Thinking’s long term target is to create a culture of innovation as it encourages employees to make innovation a daily practice. Innovation in Hospitality can be found in adapting new technologies, digital transformation, unique services, process standardization, modernization and revenue growth strategies. Lean methodology can support Innovation also in applying an agile management way of operating your hotel, optimizing organizational behaviour, introducing new analytics in marketing, developing an artificial intelligent business model, and fostering a contemporary leadership within your business.
Lean Process will ensure that your team members have clear roles and objectives, and accountability to lead success of your organization, driven by passion. Passion is the catalyst to start transformation and is contagious, therefore the participation of your team leaders in the process will replicate the passion and energy for the mission, project, service and innovation.
Remember that by evaluating your hotel performance and applying a lean way of thinking in your organization, you can develop a visionary strategy, make your goals unique and different, outpace your competition, and create a successful business.
Should you need help evaluating your current status and combining the above elements to unlock your business potential, SHN Hotel Performance Analysis will point you in the right direction.
