Management of Hotels Metrics

Access your KPIs online;
Measure your success;

Navigation: All Balanced Scorecard Articles > BSC Guides

How to correctly introduce BSC to a hotel? What categories and indicators to use? What are common mistakes in a hotel BSC implementation? Read this article to find answers. Check additional information about management of hotels metrics.

How to correctly introduce Balanced Scorecard to a hotel? Are there any differences in implementation process as compared to other industries? Well, most certainly there are differences since hospitality industry is going through hard times. Purchasing power of customers has dramatically dropped. Thus, more and more people stay in hotels just because they have to (business trips etc.). Gone are the times when people booked luxurious hotel suites to spend a weekend. Sure, the economy is recovering now, however it is early to declare full restoration of world's economy. Thus, hotels need to be very careful in managing this business.

Recently Balanced Scorecard has become an extremely popular performance evaluation and business management tool that is now used in various industries including the hotel business. At the same time, hotel owners and top managers should keep in mind that Balanced Scorecard implementation takes time and effort. It is impossible to be successfully using Balanced Scorecard with zero knowledge on this fantastic business management tool. This especially concerns hotel industry because of a very tough competition and focus on customers' preferences. Of course, every business is customer oriented, but hotels should be especially tentative to what their customers need.

Implementation of Balanced Scorecard in a hotel should most certainly start with formation of a special team consisting of hotel employees, top management, owners and shareholders, as well as external advisors knowledgeable in implementation of Balanced Scorecard in the hotel industry or in other businesses. At that, one should not forget that only company insiders have valuable information on structure in problems of a hotel. One shouldn't trust only external advisors who might use standard decisions and solutions.

Development of a strategy is another important stage. In fact, there is no point in using Balanced Scorecard if the hotel doesn't have a realistic and comprehensive strategy. Sure, it is possible to use BSC as performance evaluation tool only. However, this is not its key purpose. Besides, there are simpler and less expensive performance evaluation systems. Strategic goals and strategy in general should protect the hotel from possible problems. In other words, the hotel should be ready for various scenarios and developments.

With an adopted and approved strategy, top management and Balanced Scorecard team should start developing key performance indicators. This is perhaps the most important stage in implementation of Balanced Scorecard in a hotel. Choice of wrong indicators will result in use of the wrong data. It is imperative to focus on critical success factors. To choose the right indicators it might be helpful to buy measures from commercial KPI libraries. At the same time one should remember that every indicator should be individually selected as there are no universal solutions. Every business is unique and thus requires individual approach.

One of the most common mistakes in implementation of hotel Balanced Scorecard is that the system is used only by a few top managers. Balance scorecard will never show positive results unless it is used by the majority of hotel employees. If everyone from a receptionist girl to a top manager understands his or her contribution to strategic goals implementation, chances are that Balanced Scorecard will be extremely effective.

If you are interested in management of hotels metrics, check this link to find out more about management of hotels metrics. Also, you can check other articles in BSC Guides category.

Balanced Scorecard Toolkit includes step-by-step manuals, documents, presentations, check lists designed to help business professionals with successful development and implementation of Balanced Scorecard. Learn more about BSC Toolkit.