The AHC in conversation with - Michael Grove, HotStats
5th September 2019
With less than two months until Manchester is abounding with the great and the good from across the UK hospitality industry, we took some time to catch up with Michael Grove, Managing Director EMEA - HotStats, the global benchmarking providers, to talk about the importance of understanding profit as a key element in operational decision making and why, in these times of Alexa, Tinder and Trello, we need to bother getting dressed up for conferences.
1. How is business?
Business at HotStats has never been better or busier. During the last 12 months, we have opened two new offices in the U.S., will imminently open an office in Asia Pacific and tripled the size of the team in the UK to support our rapidly growing, global network.
Our value and benefit to the hotel community has caught on and we are adding more hotels to our platform on a daily basis. In doing so, we are better able to serve the hotel industry by offering more and enhanced data that give owners and operators the ability to make better decisions and boost profitability.
And it’s going to get even better. We are soon launching a new product that takes data analysis to the next level, looking at further detail in segmentation of revenues and expenses. It is garnering much interest from the industry.
The bottom line is this: Operating hotels is a tough business. That’s why insight into the full picture of an operation—not just the top line—is not optional, but essential. Good, clean, measurable data is the intel the hospitality industry needs now. Never has it been more important for the industry to benchmark performance on revenue, expense and overall profitability. That is where HotStats is filling the gap.
2. Let’s talk about profit. Specifically, the importance of its measurement and analysis v’s our old pal, RevPAR.
Naturally, with the majority of hotel profit deriving from the letting of hotel bedrooms, RevPAR is a vital factor. It is, however, self-limiting. Understanding and measuring RevPAR in isolation, can and will result in strategic decisions that do not consider the wider picture of maximising gross operating profit.
Hoteliers utilise many forms of benchmarking to understand their market share in different areas of performance, such as revenue, online traffic, guest reviews, and safety scoring. Profit is the final output of the various areas of performance and, therefore, is the key metric in understanding the net result of your strategic decision making.
3. What are the current trends that are impacting the ability of hoteliers to drive profitability?
The story is different region to region. In the UK, the rapid increase in costs, such as gas & electric pricing, payroll and distribution, have outpaced the revenue growth, which we have noted in the form of ebbing RevPAR gains. The lack of correlation between top- and bottom-line performance highlights the need to benchmark further through the operation and focus on areas of opportunity whilst understanding areas of strength.
4. In a hyper-connected and digital world such as today, why does coming together at industry events such as The AHC still hold value?
I think there are many benefits to various stakeholders in the hospitality industry to attend such valuable events. Whether it is to get some context and discuss current issues with people from different parts of the industry, keep afloat with the rapidly growing hotel technological innovation, meeting and networking with potential clients or just generally catching up with peers in a dense environment, AHC, in particular, is well designed to facilitate this due to its size, the wide-ranging delegate base and the well thought out sessions.
As indicated, Mike will indeed be getting dressed up for The AHC and joining the panel session, “Sitting on the Bench or Pressing It? Maximising Benchmarking to Your Advantage” during which experts from hotels to statisticians will dive into the details of what understanding metrics means for boosting business, measuring performance and answering questions to support maximising revenue and profit with these magic numbers. This session takes place on Thursday 10 October at 10.00am.
If you have yet to register, we invite you to join them, us and a host of other friendly faces for The AHC 2019.
Learn. Network. Be Inspired.
The AHC Team