NATIONAL REPORT—In an era of rising operational costs, smart hotel companies are using all of the tools at their disposal to maximize efficiencies and drive financial performance. For PM Hotel Group, which oversees more than 50 properties, this strategy includes a partnership with ProfitSword, a developer of data management solutions for the hospitality industry, and the implementation of The Edge, an advanced data management platform that allows personnel to gain real-time insight on the financial performance of individual hotels and the company as a whole.
Paul Bennie, ProfitSword’s director of business development, noted that companies of PM Hotel Group’s size often face business intelligence challenges when it comes to resources, time and knowledge. “In many cases, hotel companies attempt to create a business intelligence solution using off-the-shelf products internally,” he said. “These products can be powerful and useful, but without the ability to spend time and resources and gain knowledge on how to use and create a BI solution, it is difficult to achieve expected results. Many companies don’t have the depth of knowledge or enough team members to manage a large BI infrastructure. Companies like ProfitSword can take the burden of data collection and management off the hands of the client and can provide a higher level of service and responsiveness to the overall needs of the organization. Hotel companies need BI/technology, but they are in the hospitality business, not the software business of creating business management solutions.”
For PM Hotel Group, the main challenge was timeliness. “From early on, we struggled with a way to consolidate real-time data and deliver it to the individuals who could immediately affect a change in strategy,” explained Jim O’Hara, CFO, PM Hotel Group. “We used to be reliant on monthly financial statements which were not reviewed for 45 days after the start of the period in review. If a change in strategy was necessary, it was often too late to adjust in the current month so, in effect, two months were now lost. We needed a customized platform that allowed us to be nimble and adjust to real-time data from our hotels.”
In looking for the platform that could fit the company’s needs, O’Hara said, “We recognized the fact that there was no existing platform that could do all that we desired. We were searching for a platform that could aggregate data from multiple sources and brands, as well as pull in accounting and payroll information from our existing systems and be able to compare the results across all properties. ProfitSword’s accounting-based platform offered a great start and was a great way to organize data. All the external brand information was converted to our chart of accounts and then easily comparable. Once we learned they could interface with the different brand property management systems and we could customize the output to meet our specific needs, the decision to move forward was clear.”
When partnering with a new management company or ownership group, ProfitSword takes into account the unique needs and approach to reporting and operating for each company. “In addition, the many systems and data structures used by each company can be unique themselves,” Bennie said. “ProfitSword looks at a company’s systems, tools and processes to help define a custom product and database that will help each company succeed. When we are first introduced to a company that has a need, we consider each business unit and its operating systems along with the management company’s accounting system and processes, reporting requirements and management tools. This allows us to intimately create a solution that makes sense for each customer.
“The Edge is a web-based application that automatically integrates with the disparate software systems used to operate the day to day of the entire organization, from the hotels to the management company itself,” Bennie explained. “PM Hotel Group uses The Edge to normalize and consolidate data into a single database. This powerful database powers the application, which is used throughout the entire organization for activities such as automating the income journal, budgeting and forecasting, daily reporting, financial reporting, dashboarding and analytics and much more.”
The Edge integrates with multiple systems, including PMS and POS platforms, accounting, labor management and online purchasing. It provides detailed, flexible reports and dashboards that can be viewed by the team in any browser or be preset to be delivered to specific team members and stakeholders on particular days and times. Leadership can review individual properties, specific regions or the entire portfolio over desired timeframes.
Other features include the ability to evaluate the success of annual plans or weekly and monthly progress; detailed insight on market overview, demand outlook and an analysis of key competitors; the option to gather future on-the-books data across multiple sales platforms; and standardizing both individual and multi-property pace and productivity reporting.
“ProfitSword’s solutions provide transparency across the entire organization,” Bennie said. “Management groups provide a great deal of confidence in their partnership with owners through increased collaboration and visibility. In addition, management companies can now show a proven track record to potential ownership partners by sharing their history of using a solution such as ProfitSword’s BI platform. Because our solutions provide real-time access to information to everyone, decisions to adjust the business to achieve optimum results can be done quickly and communicated to everyone.”
O’Hara stressed the importance of this ability. “As our portfolio has grown, it has become crucial that we have consolidated real-time data available to react to changes in markets and to change strategies in response to those changes,” he said. “Multiple team members use The Edge on a daily basis to review results and to set strategy on room and F&B revenue, labor costs and staffing levels, and purchasing programs.”
“We now use The Edge to aggregate data from different sources, which leads to a great deal of statistical analysis,” O’Hara added. “As we have used the system over time, more and more historical data has been accumulated. We use this data for all types of analysis, from labor productivity in rooms and F&B, room revenue pace by segment, cover counts in outlets and multiple metrics on expenditures. In particular, we have used The Edge to model and track labor schedules based on business levels and to verify the following day if the hotels plan was successful.”
Looking toward the future and real-time data’s impact on the industry, Bennie said, “The use of real-time data will change as the needs of the industry change. This is no different than the past—data will continue to be the ‘currency’ of owners and operators, and it is essential to the success of any organization.” HB