In the dynamic realm of the hospitality industry, where growth is a constant pursuit and adaptability a cornerstone of success, the journey of an International Hotel Operator Group stands as a testament to innovation and transformation. The esteemed international hotel group saw a need for a streamlined approach to reporting and financial planning more than ever before, and therefore, Fairmas stepped in.
The collaboration with Fairmas aimed to streamline the reporting and financial planning and analysis (FP&A) procedures and empower each tier of management to drive efficiency, maximize revenue, and enhance overall portfolio performance.
This case study delves into the challenges faced by the International Hotel Operator Group, the strategic interventions brought about by Fairmas, and the tangible outcomes achieved through this mutual partnership.
Customer Profile:
Short Description:
A rapidly expanding hotel owner and operator, headquartered in Germany, has established an impressive presence across multiple European countries. The organization’s management structure has a high focus on centralized services. Although the acquisition of properties during existing operations takes place within the given brand standards and system setup, their growth has been hampered. The reason behind this is because part of the properties are bound to certain franchise standards that have less flexibility for short-term changes in the system structure (e.g. PMS) or reporting standards (e.g. market segmentation). This unique blend of internal management, property acquisition dynamics, and adherence to franchise standards presents both opportunities and challenges that shape the very fabric of their hospitality portfolio and eventual growth.
Number of Hotels:
Around 80 in 3 European countries
Size of Hotels:
80 – 400 Rooms
Portfolio Service Level:
Limited to Full Service
Portfolio Brand /Chains:
Franchise Hotels – Different brands throughout various chains
Technology Environment:
Multiple PMS (e.g. Oracle, Suite8, Protel), Multiple ERP Systems (e.g. Sage, SUN, GrandBack) Revenue Management Systems (IDEAS, Duetto) No central BI and Consolidation
Customer Key Challenges
- Various Data Sources
– Manual input of data into Excel reporting and planning sheets
– Limited data availability across all management levels from local Department Head to CFO/CEO
– Different data structure within different hotels and countries - Questionable Data Quality
– Calculation errors in Excel files & planning templates Input errors because of human mistakes
– Different versions of Excel workbooks (Budget / Forecast, etc.) – no single version of the truth (SVOT) - Stability and Security
– Person-dependent processes Inconsistent standards - Low Efficiency and Transparency
– Delayed data provision across all management levels
– Different levels of detail available depending on local reporting of the hotel - Consolidation and Reporting
– Different owner requirements
– High manual effort for consolidation Weak comparability (e.g., different market segments, different social CoAs)
Customer Key Challenges
- Comparability – To receive financial data, including KPIs and statistics in a standardized and comparable reporting format – independent from hotel brand, system structure, setup and country-specific regulations
- Workflows – To structure and align reporting and planning processes for all operational and management levels
- Standardization and security of financial planning – Establish a cross-portfolio working environment for financial planning. Provide secure access and input control
- Information and involvement of all management levels – Ensure quality and access to financial data for all management levels/departments in a timely manner
- Integration to various systems – Integrate existing and potentially new source systems and ensure data integrity across all reporting levels
- Quality and efficiency – Optimize data processing within systems to ensure data is more reliable with the increased forecast accuracy, and quickly available for all stakeholders
Process
- Assignment of responsible Project Managers on both sides
- Kickoff workshop to identify challenges and define requirements
- Presentation of existing Fairmas products
- Provision of background information (systems in use, reporting structure)
- Suggestion from Fairmas for implementation
- System setup and introduction to pilot hotel
- Pilot phase and review
- Further integration into system structure and implementation of customized reports
- Definition of responsibilities and workflows on client side
- Joint trainings for user groups
- Go-live across portfolio
- Regular review meetings and adjustments to upcoming needs and requirements
Solutions
1. Creation of a platform providing:
– Standardized planning and reporting Chart of Accounts as per client’s definition, based on USALI
– Import functionality of actual data from all required accounting systems
– Integrated mapping tool to import data from different accounting systems and different social CoAs
– Flexibility regarding department/cost center structure per hotel to cater all service levels (limited service to full service)
– Interfaces for all required PMS (FOLS, Opera, SIHOT) for the automatic daily import of 30 days of actual data per market segment and on-the-books data for the next 365 days
– Interface to third party Revenue Management System – for automatic import of Demand Forecast form to validate Financial Forecast vs. Demand Forecast
– Flexibility regarding market segmentation – hotels can plan within their own market segments which are transferred to the company’s market segment standard
– Payroll planning feature, adjusted to different local Payroll, Taxes and Employee Benefits standards, allowing detailed payroll planning on manning guide level to be transferred into corresponding P&L account lines
– Monitoring feature to supervise the planning process per unit (hotel), ability to lock certain planning steps
– Validation feature to measure current Planning vs. Last Year results
– Automatic consolidation and automatic email reporting
– Various on-board reports with different levels of granularity
– Customized reports as per client’s definition – for different owners’ requirements
2. Client involvement
– Master-User and Train-the-Trainer concept
– Dedicated point of contact with time resources, know-how and empowerment
– Commitment of all stakeholders within the company structure
– Support from IT/ System departments for system integration
3. List of Fairmas Products
– FairPlanner
– FairChain feature for consolidation
Key Learnings / Advantages
- Availability of financial P&L data (actuals) by the 10th of each following month across all management levels, incl. hotel operation and head office
- Availability of reliable financial forecast for 12 months, rolling by 15th of each month across all management levels, incl. hotel operation and head office
- Centrally controlled planning and reporting workflow for forecast and budget
- Contribution, involvement & direct planning input from department-head level upwards
- Utilization of the platform as part of daily routine across all user levels
- Highly efficient budget and revenue meetings due to commonly shared and reliable data
- Solid data source for extended and partly automated owner reporting
- Effortless and smooth integration of new properties regardless of local system structure
- Data consistency in the Fairmas software despite change / update of PMS and / or accounting system
- Easy “on click” consolidation
Conclusion:
In conclusion, the partnership between the International Hotel Operator Group and Fairmas stands as a testament to the transformative power of innovation and collaboration in the hospitality industry. By overcoming complex challenges and implementing cutting-edge solutions, this alliance has not only streamlined financial planning and reporting but also empowered the entire organization to thrive in a competitive market. As the hotel group continues its journey of growth and adaptability, the lessons learned from this case study serve as a beacon of inspiration for the industry at large.
