How to Conduct A Productive Monthly Operating Review For Your Hotel

Posted on : 04-Sep-2012

I am often confronted with the question on the art and technique of conducting a meaningful and productive Monthly Operating Review. Mostly the questions are on the “how to and what to” aspect of the reviews. This makes me wonder why in the first place this should be an issue. Every business must meet at least once a month to take stock of things, where they are and where they were supposed to be.

Structured operating review meetings are even more significant for hotels which are managed by a management company. The owner must know how well the management company has performed against the agreed targets or deliverables. However one thing must be very clear to all of us. An operating review meeting has relevance only if the hotel has an agreed business plan, budget or targets. One must evaluate performance against some bench marks or mile stones.

Operating Reviews are a very formal and structured process and perhaps the best way to keep track of the performance of the hotel against the agreed strategic business plan. These review meetings are generally conducted in a very friendly and understanding atmosphere. It offers you an opportunity to evaluate your success or failure in exploiting the existing market scenario and most importantly pushes the team to think on possible adjustments required in the strategic approach to achieve or exceed the volume, price and profit targets.

Let us now discuss the specifics on your operating review strategy.

How often should you hold your MOR

I would say every month. No two ways about it. The ownership must be briefed on the operating results at least once a month on a fixed date to fall within the first five working days of the following month. Reason being that unless you discuss the performance of the previous month immediately after the close of the period, you are going to lose time in implementing the corrective measures required to stay on course. A well managed MOR generally lasts for a 90 to 120 minute period.

Who All should Attend the MOR

Ideally the owner with his professional representative or the owners representative and the General Manager, the Financial Controller, Director Marketing, Rooms Division and Food & Beverage Managers. Other functional heads should be available on call in the hotel to join the meeting, if required. Your review process should not cause any disruption to normal operations.

MOR Structure

The format of the meeting is quite simple. The general manager gives an overview followed by a crisp presentation on numbers and strategies and concluded with an action plan to meet the variances or improve the performance. Additionally he should also highlight the external factors that were influencing the performance, positive or negative.  The key focus areas in an MOR are,-

-How effectively is the management team implementing the business plan, what is the performance efficiency?

-Are there any external or internal threats that need to be addressed?

-Are we taking advantage of all opportunities?

-Do we need to review our approach and strategy, if yes, what all needs to be adjusted?

Since owner’s representative is normally a professional hotelier, he must advise and lead the ownership into key critical areas of performance and seek satisfactory and actionable response from the operating team. The meeting must result in a very objective assessment of the performance and agreement on future action plan or course that the management team shall pursue. These meeting go a long way in instilling a sense of responsibility and ownership of actions in all functional heads.

Preparation for an MOR

The success of a monthly review will depend on the quality of data and facts circulated by the management team to the ownership. More than the quality, I have always given more importance to transparency. There should be no attempt to hide information or numbers between the lines. The management team should follow a standard format which depicts true actual performance against approved business plan for this period and on a year to date basis. I have always liked format which in addition to this also gives projected figures for the end of the year.

Once the operating review meeting concludes, the General Manager must send minutes of the meeting, with agreed action plan assigned to each functional head, to the ownership or their representative.

A regular, structured and productive operating review not only help in taking stock of operating efficiencies but also cements the team as a cohesive force, committed to achieve results.

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