Hospitality Financial Leadership – Why Financial Acumen is So Important to Your Hospitality Career

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It is common sense to know:
With more knowledge and skills your career prospects and
advancement possibilities are enhanced. In hospitality it is not
quite as well understood.

There exists a counter culture to growing up, to raising one’s
self out of the guest- and colleague-only world into the financial
arena. I know and have met many people who camp out in hospitality
for this very reason. The idea that they will not have to deal with
numbers and the black and white is part of our culture. In this
piece I am going to examine why this exists and what you can do to
rise up!

The hotel world has changed tremendously in the past 20-30
years. I have been at it for 35-plus years and the most profound
change I see is movement away from the owner/operator model to one
where most hotel companies become management companies. In simple
terms this means the name on the door 30 years ago was the owner of
the bricks and mortar. Today the name on the door 19 times out of
20 simply means the brand has a management or franchise agreement
with the hotel owner or owners. What this translates to—as far as
how the hotel is run— is where we have all seen and felt the
changes.

The old model had a much kinder and gentler approach to
fostering a culture of inclusion, family, longevity and a strong
service culture. I distinctly remember my first stint in a
“managed hotel” inside my company. People had warned me that it
was different and they were right. The owned hotels had a clear
sense of togetherness and you knew what was important. I literally
grew up with this slogan in my DNA, “Look after the guests and
the money looks after itself.” Leaving the safety of the owned
nest I learned a few new things.

The owner needed a certain return each quarter to meet his debt
and investor obligations. Back home this was never a topic of
discussion. It seemed head office was always grumpy about the
results but never spoke of external obligations. These owner
obligations had a profound effect on how we operated, especially
the first year I was at the managed hotel.

Things were not going well

We missed the first two quarters and immediate action ensued.
Staffing and expense reviews had a focus like I had never seen
before on department managers being accountable for their monthly
forecasts and the results. We scheduled F&B outlet days and
hours using occupancy by transient and groups to determine demand.
We designed and implemented a staffing guide of all scheduled
positions. Each manager was accountable for his schedule based on
the approved formula. No more looking after our colleagues in the
low occupancy periods. This was a luxury we could not afford. We
tore apart the food cost and especially the buffet offerings, and
designed menus that reflected business levels. Back at the ranch
there was never a focus like this.

In all, my experience with my first managed hotel was very
positive. As luck would have it, business really picked up after my
second quarter there and for the next two years our team enjoyed
great results. Our owner’s rep (today’s version of an asset
manager) was happy and more than willing to invest. This was
another point of sharp contrast to the old homestead reality. At
the owned hotels money came for capital on a regular train
regardless of the results. In the new world we saw the intent and
the desire for the investment as a clear link to our ability to
generate a return.

So how does this relate to you and your financial acumen—which
in my book means your hospitality financial leadership skills?
Simple, you are in a business that now needs you to operate like a
business person. Just like my story of going from the safety of the
owned nest, your career will be greatly enhanced by getting your
financial leadership game on. Perhaps you just made a move to a new
position or hotel and the demands and expectations are a little
different.

Don’t turn from that light, do the opposite:
Run straight at it!

Maybe your new role is a little scary with a sharper focus on
profit performance and not as much on guest service scores and
colleague engagement results. Do not worry—that is par for the
course today. Owners need to make their numbers. You job now is to
deliver. Your tools are the same as mine were. Get to know your
costs, zero base your expense. By the way, what this means is every
line of your expense section is supported by an itemized list of
what is in your budget and forecast. For your payroll you have a
staffing guide and formula that works on a productivity basis.

Once these tools are in place your job is to make sure the other
managers and leaders in your business all understand and use them.
Now comes the sauce on this dish and it is the new understanding
and your ability to grasp and articulate the owner’s business
strategies and goals.

Now your financial leadership skills set you apart from
others and that is what today’s hotel world is looking
for!

At Hotel Financial Coach I help hotel leaders with
financial leadership coaching and workshops. Learning and applying
the necessary financial leadership skills is the fast track to
greater career success and increased personal prosperity. I
significantly improve individual and team results with a proven
return on investment.

The 10 Hour Executive Coaching Program http://hotelfinancialcoach.com/coaching/

Team Financial Workshops http://hotelfinancialcoach.com/tailored-specialty-workshops/

Signature Keynote or Breakout Session http://hotelfinancialcoach.com/speaking/

Financial Leadership Video Course https://video.tourismworks.ca/en/financial-leadership

Give the coach a call today and let’s get
going!

If you would like a copy of any of the following send me an
email at david@hotelfinancialcoach.com

  • RevPar Index Spreadsheet
  • Incentive Plan Template
  • EFTE and Productivity Exercise
  • Hotel Financial Policy Manual – Inventory of
    “Sections”
  • Hotel Financial Coach “Services
    Sheet”
  • A White Paper – Creating a Hotel Policy
    Manual
  • F&B Productivity Spreadsheet
  • Rooms Productivity Spreadsheet
  • Financial Leadership Recipe F TAR W
  • A White Paper – A Six Month Workshop and Coaching
    Assignment
  • Hotel Financial Coach – “Speaking
    Sheet”
  • Flow Thru Cheat Sheet – Enhanced

Visit my website today for a copy of my FREE guidebook
The Seven Secrets to Create a Financially Engaged Leadership Team
in Your Hotel

www.hotelfinancialcoach.com

Contact David at (415) 696-9593
Email: david@hotelfinancialcoach.com

Source: FS – All-Hotels-Blogs
Hospitality Financial Leadership – Why Financial Acumen is So Important to Your Hospitality Career