Mr. Heller

Human Resources, Recruitment & Training

Creating a Small Hotel Operating Plan that Fits Your Objectives and Budget

By Jed Heller, President, The Providence Group

Strong communications between an owner and general manager are vital to the success of any property. The general manager needs to share the owner's vision while clearly understanding business strategy, objectives, accountability and metrics for success. In many cases, the owner and general manager will have already developed a broad based business plan that documents the goals and objectives of the property. Once these goals and guidelines have been established, it is incumbent upon the general manager to create a detailed operating plan to fulfill the vision.

The operating plan acts as a highly detailed roadmap that outlines very specifically the course of action that will be taken to achieve stated objectives over an agreed upon period of time. In general terms, an effective operating plan explains in detail what needs to be done, when, how, and by whom - essentially, it defines how the hotel will be managed on a day-to-day basis and sets a standard for hotel employees. The operating plan also serves as an outline of the capital and expense requirements for daily operations.

For small hotels, a sound operating plan will help managers address inefficiencies, operate more productively, and be better prepared for unforeseen market situations, all of which directly impact the bottom line.

Creating the Plan

In developing the plan, managers should include measurable details, but not to the level that it may restrict creativity. It should be written in a manner that enables measurement of progress toward specific operational goals and objectives, and should be consistent with the overall strategic goals of the hotel.

A well thought out operating plan is flexible and must be readily adaptable to new situations. The operating plan should also include contingencies for best case, expected case, and worst case scenarios. Potential risks should be identified and the plan should describe how those potential risks can be mitigated. For instance, how will the hotel maintain a high level of customer service if one of its key employees leaves? What external resources are readily available that can quickly address severe maintenance problems, like heating or plumbing, that will allow you keep your guests satisfied? A well-executed operating plan helps managers maximize profit in high and low seasons, anticipate swings in business and plan for staff and resources accordingly, so that the customer experience remains consistent.

Budget Considerations

The hotel operating plan needs to be mapped to a budget and include capital equipment needs, marketing tactics, cost controls, employee training, and preventative maintenance and safety issues. Standards need to be established in each operational area and supported by clearly defined staffing requirements, staff expectations and policies and procedures for reaching objectives. The plan also identifies inadequacies in staffing or other areas and how those inadequacies will be addressed. Formal operating procedures are designed to assist the hotel managers in the daily operation of the hotels as well as provide reporting and review controls. These procedures detail the standards for operations, human resources, payroll, accounting, computer systems and maintenance.

General managers need to regularly check their operational expenses against the budget so they can identify trends and make adjustments in the operating plan as necessary. Just as an accountant would report and compare monthly financial statements against a budget, the operational goals and objectives identified in each functional area should be reviewed on a regular basis and compared to the plan as well. This ongoing analysis provides a clear picture of overall hotel performance.

Addressing Key Functional Areas

Key operational areas that should be addressed in the operating plan include maintenance, housekeeping, front desk operation, and food service, if appropriate.

In the maintenance area, the plan should address maintenance contracts, costs, and schedules; work to be done by electricians, plumbers, painters, and carpenters; heating, ventilation, air conditioners, and refrigeration; security, telephone, water, waste, fire protection, and smoke control systems; and maintenance of food service and laundry equipment.

Housekeeping considerations include cleaning techniques, procedures, and schedules for rooms, bathrooms, and public areas; inspections; cleaning materials and supplies; inventory of guest room supplies and amenities; cleaning floors and carpets; supplying clean linens, textiles, bedding, and laundry supplies, and facilities; heavy cleaning; selecting, maintaining, repairing, refurbishing, and replacing furnishings; assuring safety, handling fire prevention; and keeping records.

Clear policies and procedures for the front desk hosts are critical in creating a friendly guest atmosphere. Policies and procedures should be outlined that set expectations for customer satisfaction - listening to guests, fulfilling guest requests, telephone skills, efficiently registering guests, processing payments, and handling complaints and correspondence. Training programs should be built into the plan that will help your employees develop and refine the necessary skills to present the most pleasant guest experience.

If the hotel provides food service, the operating plan should address food storage and preparation policies, sanitation and waste disposal. The plan should also map out state sanitation and food handling regulations and any associated costs or resources required to meet regulations.

Build Marketing Activities into the Plan

Marketing is also an integral part of the operating plan. The market plan outlines the programs that will attract guests and differentiate the hotel by delivering a unique customer experience. Goals should be established to measure the success of all marketing and sales programs to determine if the activities are generating the planned return on investment. If an incentive program is not generating the expected results, the general manager will be able to quickly adapt to a contingency strategy as mapped out in the operating plan. Fully realized marketing plans help managers define the customer segments most important to their financial and strategic goals and enable them to leverage these areas to achieve the greatest success.

Motivate Employees

Finally, the operating plan should be communicated to hotel employees. Incentives and recognition programs, for example, help sustain staff energy and morale so that customer service levels are maintained over the long-term. In fact, if you bring your employees into the planning process, they will feel more accountable for its success. Each employee should understand the objectives and expectations in their specific area and how their role plays an important part in the hotel's success. Creating team incentives will motivate and build a sense of camaraderie with your employees. ** **

Tying it all Together

In summary, the operating plan is a critical success factor, particularly for small hotels, where any missteps can have a dramatic impact on the bottom line. The most successful hotels will know where they are going and how they will get there, while being prepared for any market situation. The operating plan is the living document that will keep managers on track and in touch with every aspect of the hotel.

Jed C. Heller is CEO of The Providence Group LLC, which provides management services to hotels and timeshare resorts. Heller has managed all phases of three start-up ventures, two as the operating partner. He was the president of Goodmanagement, vice-president of The March Company Inc., and president of Premier Hotel Corp., He began his career with Winegardner and Hammons in Cincinnati, Ohio. Heller serves on the editorial board of Hotelexecutive.com and the Resort Management Committee of the American Resort Development Association. Mr. Heller can be contacted at 781-582-8785 or jcheller@providencegrp.com Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.

Receive our daily newsletter with the latest breaking news and hotel management best practices.
Hotel Business Review on Facebook
RESOURCE CENTER - SEARCH ARCHIVES
General Search:

FEBRUARY: Hotel Social Media: Engage, Promote, Personalize and Reward

Larry  Mogelonsky

Social media is evolving. Given how pervasive it now is for any and all hotel marketing efforts, we must change how we utilize these channels for the best results. Namely, we must recognize that social media are advertising vehicles, but with very different calls to action over other, more traditional platforms. Once you understand the passive nature by which social advertising functions, the tactics you employ will be clear as will the path to long-term success. Moreover, knowing that social media works as an advertising vector will hopefully reinvigorate your prospects in using traditional mediums to this end. READ MORE

Bronwyn  White

Hotel marketing executives should now start viewing social media as a distribution outlet for owned media rather than a stand alone marketing strategy as social media giant Facebook makes you pay more for renting on their own real estate. READ MORE

Katelyn  Stuart

Social Media starts at the beginning of the consumer buying process. It is imperative to building brand awareness, generating leads, and also retaining customers. Social Media platforms are used as an opportunity to engage with these users and assist in the decision-making process, given that the content is valuable and relevant. As the consumer continues learning about the brand and product through social media, this exposure results in assisted conversions, generating indirect revenue. After experiencing the product, the customer continues engaging with social media, building a sense of loyalty that turns them into a repeat customer. Through a process of trial and error, Paramount Hospitality Management Company (PHM) has learned what engages their fans, and what doesn’t. With a portfolio of three different hotels that have their own individual style and demographic, we have learned that the engagement received on Social Media is not only based on a specific audience, but the specific content you are sharing. Here are 6 key-elements of engaging content that have proved to be successful in the hospitality industry. READ MORE

Peter O'Connor

With over nine out of ten of people selecting a hotel now consulting user reviews prior to booking, manage a hotel’s online reputation has become essential. Based on multiple years experience helping hotels develop and implement their social media strategies, this article outlines how hotels can maximize the benefit they can gain from online review sites, offering practical tips and techniques to help maintain and enhance their online reputation. READ MORE

Coming Up In The March Online Hotel Business Review


Feature Focus
Hotel Human Resources 2015: Recruiting and Retaining the Best Employees
Due to the ever-increasing demands for improvements in guest experience, intense pressures are brought to bear on hotel workforces, as well as on the Human Resource professionals who are responsible for recruiting, training and retaining them. Meeting and exceeding guest expectations requires a substantial investment in recruiting and development, so that top talent can be hired, and career paths can be established to ensure the continuation of five-star service performances. So important is staff development that most HR professionals believe that retaining and rewarding their best employees, and cultivating the next generation of corporate leaders represent their greatest challenges. And they are expected to accomplish these feats at a time when competition for in-demand skilled talent has never been greater, and when HR budgets are still constrained due to the slow-growth recovery following the Great Recession of 2007-2009. HR strategies continue to evolve as social media has become an accepted means for recruiting purposes, and there is also a greater emphasis on metrics so that investments in HR practices and policies can be measured and justified. In addition, issues surrounding demographic changes in the workforce are being addressed. A large percentage of existing workers are ageing out of the industry, just as the Millennial generation is entering it, and there is also greater diversity in the workforce which affects many aspects of HR operations. The March Hotel Business Review will examine some of the challenges facing HR professionals, and will report on some of the best practices they are employing to achieve their goals.