New managers in any field, including the hospitality industry, are often faced with the unenviable task of rapidly getting up to speed with the details of their new responsibilities. Your big promotion, or transfer, may not be such a blessing if you fail to understand what success means in your position and how to know if your business is running smoothly or not.
When it comes to the hospitality industry, there are many distinctive details that need to be understood to make good decisions and maintain the financial stability of the business. Thankfully, hospitality software can lift some of the burdens from your shoulders, but you still need to know the basics of hospitality financials in order to use these tools effectively.
To this end, let’s look at some of the things that a new manager needs to know about hospitality financials.
Sort Out Profit And Loss Statements
One of the most important things to grasp is the nuances of a profit and loss statement as it pertains to the hospitality industry. While many of the traditional features of a P&L statement remain similar to those of other industries, there are some specifics that need to be highlighted for this sector.
For example, revenues and expenses are usually grouped according to different departments in the business. In a hotel, you will expect to see each department with its own section on a P&L statement. This may take some getting used to if you are coming from another field.
Unlike some industries, hotel P&L statements often separate their expenses into controllable operating expenses and non-controllable fixed charges. Be sure to understand the difference if you are tasked with making decisions based on these numbers.
Understand Important Hospitality Metrics
The hospitality industry has its own set of metrics to measure business performance and operating capacity. These metrics are not necessarily difficult to understand, though it is important that you are aware of them if you are managing a hotel or a similar business.
Some examples include the number of total available rooms, the average daily rate paid by guests, average occupancy rate, gross operating profit per available room and sentiment score, on TripAdvisor and related travel review sites. This diverse set of metrics, among many others, will provide you with detailed insight into how your business is doing.
While some managers may prefer to do things the old-fashioned way, there is little room for this in a serious hospitality business. It is important that you delegate many of the more basic tasks, especially ones that can be automated, to one of many hospitality software packages. Things like accounting and payroll software can also be configured to suit the needs of a hospitality business. While these may require a bit of a learning curve, they will save you and your team from a lot of stress as time goes on.
Stay Up To Date With Contemporary Developments
These days, the hospitality industry is being transformed by technological developments in automation and artificial intelligence. Mobile apps are capable of completing many of the check-in and verification tasks that used to require an extensive front desk team and the data that such apps collect is useful for gleaning insights about how to offer better services for your customers.
Staying up to date with these and future developments will allow your hospitality business to thrive in the coming years. You can expect that this trend will continue into the future, so being at the front of the curve will give you an edge in the competitive hospitality sector.