Consolidation – Hotel key figures at group level

Performance analysis for multi-property at one click


To meet the challenging demands of the controlling and steering function, head offices of large hotel companies must be able to access all revenues, costs, and relevant hotel key figures quickly and easily. The level of detail of the analysis should be flexibly adjustable so in the event of deviations from targets, it is easy to switch from the group, country, or cluster level to the hotel level. 

The hotel industry is changing, and not just since Corona. Established hotel companies have consistently pursued a growth strategy in recent years because the desire to travel and increasing prosperity in populous countries such as China and India are promising sustained dynamic revenue growth in the future.

Despite rising costs and steadily increasing competition, it was possible to generate comparatively high returns. This in turn increased the attractiveness of the hotel industry for investors.

Corona also seems to have made little difference to the prospect of profits, at least in the mid-term – the optimism and speed of recovery from the pandemic-related slump in demand for hotel rooms are impressive.

However, the internationalization of hotel companies, the development of new hotel brands within a group to appeal to individual guest wishes, and to meet the high return expectations of financial investors, are also confronting hotel companies with new challenges.

Think global – act local

 The headquarters of the world’s largest hotel operators already manage room capacities ranging from 500,000 to more than 710,000 rooms – distributed around the world and across a wide variety of hotel brands.

 This includes national and regional differences as well as differences between the various hotel brands in terms of service, the scope of offers, and cost structure. The bottom line is that no two hotels are alike, and direct comparison of hotels in terms of performance ratings is virtually impossible without prior standardization.

 This affects all hotel companies above a certain size. Regardless of whether it is a franchisee with several hotels, a hotel management company, or a hotel group with a relatively homogeneous hotel portfolio such as Lindner Hotels AG or the Meininger Hotel Group.

 The number of hotels is also growing steadily. The TOP 4 of the German hotel room providers, the French Accor, the two US hotel companies Best Western Hotels & Resorts with headquarters in Phoenix / Arizona and the Marriott International and the British InterContinental Hotels Group (IHG) [1] owe their growth in market share mainly to new franchisees or the granting of further licenses to management companies.

Consequently, it has been no longer sufficient to welcome guests with perfect hospitality, i.e. in the hotel on site. What is needed is a tool for the overall business overview in combination with the possibility to access the data sources easily and flexibly.

The headquarters of a multi-property as a cockpit with controlling and management function

For the long-term success of the group, the head office becomes the control centre, equipped with a controlling instrument keeping a constant eye on all sales and costs, as well as imputed profits and key figures – also known as key performance indicators (KPI) – of the individual hotels. 

The requirement for this is automated data processing at the hotel level, the transparent and uniform calculation of hotel key figures, and the transfer of hotel data to a uniform profit and loss statement (via mapping) by hotel standards. This way, the top management keeps the focus on the overall result and, in the event of deviations from the plan, can simultaneously analyse the profit contribution of individual hotels (or of a region) and intervene in a controlling manner.

Consolidation at one click 

What does consolidation mean and what is the basis of consolidation at one click?

Only when consolidation at the group level is possible at one click, it is possible to act promptly – and reacting quickly is the basis for sustainable success in a market as competitive and volatile as the hotel market.  

In the context of financial planning in hotel management, consolidation means combining the performance data of several hotels. This does not mean the evaluation of expenses and revenues in the fiscal sense, nor does it mean liquidity planning. This means the net and gross profit determination based on the company’s profit and loss account as well as the automated calculation of the decision-relevant hotel key figures (KPIs) based on the hotel’s chart of accounts to determine the degree of target achievement through a target / actual comparison (actual values compared to Forecast and budget).

The key to one-click consolidation lies in standardization in combination with automated and digital processes in the cloud for access regardless of location or time.

Only if performance evaluation is standardized, automated, and access is guaranteed at any time from any location, will all the requirements for consolidation at one click be met. 

Automated and standardized for maximum quality and efficiency

The globally recognized and industry-specific USALI standard has established itself as the hotel standard for this purpose. (read more about USALI here). USALI enables the performance comparison of hotels even with national, regional, and other differences.

 The automation of data transfer and the calculation of decision-relevant KPIs, plus ready-made reports and analyses ensure high data quality by eliminating manual data processing. At the same time, this minimizes the time and personnel required for data transfer and analysis. All data can be retrieved daily and ad hoc. The transfer to the cloud allows unrestricted access from anywhere and at any time.

By retaining the source data, the level of detail can be flexibly expanded in the opposite direction if necessary – i.e. if there are deviations from targets. Possible causes of deviations can be quickly identified, and measures can be decided at an early stage. 

Case study: Consolidation with FairChain – simple & flexible

Using the example of FairChain, the module for consolidation with just one click in FairPlanner, the following is an insight into selected reports.

1. Hotel P&L Report – The Profit & Loss Statement as a Performance Analysis

The report shows the key figures Occupancy (room occupancy), Average Daily Rate (average rate per room/day), Revenue Per Available Room, Food & Beverage (F&B) (Sales for food and beverages), total revenue and compares actual data with budget, forecast & last year values.

2. Hotel P&L Report – The Profit & Loss Statement as a Performance Analysis

The Hotel P&L Report shows the consolidated P&L for a selected set. It compares actual data with the budget, forecast, and previous year’s actual data. The level of detail is freely selectable. Thus, all hotel departments can be examined based on the profit and loss account or individual hotel departments such as only the F&B area. Here, too, the period can be freely selected. Depending on your needs, the relevant period in FairChain can be set to a year, a month, or a specific event period.

3. Corporate report – Deviations at a Glance

The corporate report is used to quickly record deviations. The previous forecast, the budget, or the figures from the previous year can be used as a reference value for the current forecast. The report shows all important key figures per hotel, per cluster & per set at a glance.

4. The Cost Benchmark Report – Costs in Comparison

The cost benchmark report shows at a glance the profitability of individual areas of the hotels in the form of a list. This report shows in a simple way in which hotels, for example, the F&B department, makes a particularly high percentage of the GOP or at what level the hotels level off on average.

5. Drill-down – The search in detail

FairPlanner’s drill-down procedure enables detailed analysis at the hotel level in the event of detected deviations.

If, for example, the “Cost Benchmark Report” shows an unexpectedly high proportion of costs in the area of ​​F&B (cost of goods), it is possible to select the F&B department in a few seconds and to look at the individual bookings of the accounting system via “drill down” or any comments on the local F&B director to read about the values.

“Drill down” in FairPlanner or via the Account Line Generator Report in FairChain.

Collaboration – Reports to download and share

Would you like to learn more about FairPlanner, FairChain or do you have questions about the integrated reporting system and the pre-installed evaluations and analyses?

Then arrange a free demo appointment now. We would be happy to show you our hotel BI solution for efficient budget and forecast planning, especially for the hotel industry.

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As hotels strive to streamline their financial processes and make informed decisions, the selection of the right FP&A software becomes a critical aspect of their strategy. In this blog, we'll explore the key considerations and steps to help hoteliers decide...

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