The big picture and critical details
Every general manager likes to be well informed and have a sense of being in control. The general manager understands that knowledge is power, and if used correctly, it will engage people and drive a hotel toward an attractive vision and financial success.
When you present something to the general manager, start by giving the big picture. Tell a story instead of just showing raw data or information, and remember the saying that a picture is worth 1000 words.
Marketing
The big picture in marketing is the return on marketing spending. The general manager wants to know if the money spent does make any sense. A good KPI shows the return calculated as a delayed rolling 12-month average. What you spent 3-6 months ago impacted the revenue the past month. Calibrate the input to the KPI and start measuring. If the general manager wants more details, you could show the top most successful campaigns and the bottom ones that did not produce as expected. Experiment and measure until the data show what works and does not.
Sales
Salespeople sign contracts for future room nights. The big picture is the total production of room nights (and revenue) from all active agreements. Another big picture for hotels with substantial meeting space is the win rate calculated based on the value of incoming inquiries. Critical details could be the top ten customers by total revenue, so the general manager can appreciate their business when meeting them in person.
Revenue
The general manager wants to be mentally prepared for the future. Therefore, the big picture in hotels is the total revenue forecast, but most hotels still only forecast rooms and room revenue. The critical KPI shows if the rolling 12-month forecast today is higher or lower than last year. Another big picture is whether the market share (RGI) is increasing or decreasing. Is the hotel gaining or losing market share? A third big picture is the Customer Acquisition Cost (CAC) in percent of total revenue or total room revenue. Revenue managers make decisions about distribution which significantly impact CAC, so measuring CAC falls into the revenue managers' area of responsibility. Charts showing rolling 12 months add value by visualizing if the KPI increases or decreases over time.
Very few general managers are interested and knowledgeable in revenue management. Tell the general manager the story behind the development, especially if the three KPIs above point in the wrong direction, instead of making bad excuses. Revenue managers are among the most trusted people in the hotel industry, and by simply explaining a complex landscape, they will strengthen the trust. They know their jobs and the figures, so make presentations easy for the general manager to understand.
A revenue manager should also measure the forecasting accuracy to learn and improve and share the results with the general manager when appropriate.
Evaluation and rewards
General managers should use the big-picture KPIs when evaluating the performance of each role in the hotel. The big picture means that getting these KPIs right will lead to the hotel's financial success. Therefore, set goals for these KPIs, and if the KPIs show satisfactory development, the general manager should reward each team and individual.
Take action
The six big-picture KPIs are all that a general manager needs from the commercial team. When all of them are developing according to plan, all is good. However, if any of them point in the wrong direction, the general manager would like to hear the story about that specific KPI.
The next step is collecting the data, calculating the KPIs, and designing an easy-to-read report.
