What everyone needs to know about hotel financial skill 1-10 (Part 1)
Applies to financial leaders’ and operational managers’ roles:
On the eve of starting my financial leadership course for the third year with Royal Roads University it occurs to me that most people have it somewhat wrong when it comes to how they think about the financials inside the hotel business.
It’s almost like they think that a mechanic is the only person who can drive a car. On that note many great drivers possess great knowledge about how the car works but they’re not mechanics; it’s not a requirement to be a great driver. You would never take your Ferrari to the driver for a repair, but man can they drive it. The exact same goes for financial skills and understanding. You don’t need to know how to be an accountant to be very well versed in hotel financial leadership knowledge and be a hotel numbers pro.
Here is a list of what to know and how best to think about the numbers in your hotel. No matter what your role is.
- It’s not accounting, it’s business thinking.
People naturally think that the numbers are the accounting people’s thing and they are correct about that to a great extent. But it’s the forward motion we want to capture and that’s clearly a different action than capturing and being the master of the recording process. Having financial skills means you possess business thinking or what we would traditionally call business acumen. Your business thinking allows you to capture and communicate the essence of the company’s business strategy. Developing your team and department and communicating and delivering on business objectives is your goal. Understanding what the enterprise is saying and being able to translate that and act is business thinking.
- Treat the numbers the same as the Guests and the Colleagues.
The hotel business is premier, one of the originals and leaders, in providing great guest service. That service is delivered by engaged colleagues. Put the two together and you have just created an environment that allows our guests to have a great experience and that’s the essence of hospitality. Behind that curtain lies the truth about this business. A slightly complicated and somewhat misunderstood beast that is crying out for the attention it needs. Make the numbers just another part of what you do every day. Everyone in management has a role to play. Play your role well on the financial stage and your career grows. Skipping the numbers is a big mistake.
- Welcome imperfection.
The numbers behave the same as guest service and colleague engagement—they are never perfect. People confuse the recording of the numbers in accounting with playing their part to be involved in developing business strategy. The answer to these challenges is never finite. What would you rather have, two points of occupancy or $5 in rate next year? That’s a very different question and discussion compared to the accuracy of the bank reconciliation. Learn to distinguish yourself from the idea that what you want is the numbers to be perfect in your budgets, forecasts and business discussions. Take the pressure off and welcome the contribution and know it’s never going to be perfect.
- Everyone needs to play together.
Your accounting leaders cannot sit in their offices and dream up what’s going to happen next month or next quarter in the operation. It does not work that way. They need operational managers to be involved from inception all the way to the end and repeat, never stop. If there is a separation between creating budgets and delivering results it will not create traction in your hotel and the engagement you desire will not develop. Everyone has a part to play and in order to play the game well we must learn to play together.
- Get and be a mentor.
Everyone is better with a mentor. Someone who has traveled that road before. If you’re a leader, part of your responsibility is to develop the next wave of soldiers. If you’re a soldier, then make sure you have the guidance of the experienced campaigner. Don’t try and re-invent the wheel—ask for help. Getting and being a mentor to others creates lasting relationships that produce amazing results. Remember those that helped you? What would you be willing to do for them? Create this kind of environment and support for your leadership and people will want to follow you. Look for and cultivate this kind of relationship throughout your career and you will flourish. Pay it forwards and backwards.
To be continued in Part 2 next week
David Lund – The Hotel Financial Coach
Contact David at (415) 696-9593
Email: david@hotelfinancialcoach.com
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