When is the right time to review an operation and its efficiencies?

 

When business is good and revenues are flowing, an operation may appear to be performing well. However, when that same operation runs into a down market – and we all know the cycle of the business – the operation’s true colors come through. Strong revenues can cover up a lot of challenges that become difficult to correct when the revenues drop. We have found that most operators wait until the economy turns south before they spend significant time analyzing their operations.

 

An operational analysis should be a living and breathing process for all operators. The ability to continually look at the operation in detail and answer some of the following questions:

 

• Does your Cost Per Occupied Rooms (CPOR) align with industry standards and have the ability to flex as
  your revenues do?

 

• Have your staffing guidelines been set up to effectively work with your business model? Do the guidelines
  match with how your team is actually scheduling each week and what actually occurs?

 

• When do you know your expenses – labor, cost of goods sold and operating – need to be adjusted?

 

• How do you adjust expenses and not impact the customer experience?

 

• What is acceptable flow through ratios for each department?

 

• Do you have the right reports to properly analyze the operation?

 

PHG can help you ensure your operation is running efficiently in any market condition.