The success of the hotel industry worldwide has typically been linked to the health of the economy because there is greater business travel and more disposable income is available for travel during one’s leisure time.
Savvy hospitality leaders understand that the best way to weather an economic downturn – or to take advantage of a hot economy – is to remain focused on process improvement. The more efficient the hotel’s processes, the better positioned it will be to thrive under any economic circumstance.
Process improvement never ends. Continuous improvement is the goal of any thriving organization, because market conditions, consumer demand and other factors change over time. As well, technology and other changes enable work to be performed more productively without affecting standards, and this reduces costs.
This is especially true in the hospitality industry, which is affected by technological advances and the evolving expectations of guests and event partners. Continuous process improvement on the service side, in particular, is vital in the hotel business.
As Starwood Hotels & Resorts Vice President of Operations Brian McGuire recently told the Fast Track online publication, “With the rapid development and deployment of digital technology for our guests, and our associates, we have constantly had to remind ourselves to prioritize our service whenever we evaluate whether we should invest in some of the innovative advances in this space.”
Although every hotel company must structure its methods for process improvement around its own set of assets and challenges, well-established lean management techniques exist that enable hotel executives and managers to continuously discover opportunities and maximize efficiency in the short term and over the long haul.
McGuire was placed in charge of Starwood’s Six Sigma continuous improvement program in North America before Starwood was purchased in 2016 by Marriott International, and it is still part of his job description. In essence, the program directs executives and managers to:
Remember: Process improvement should be continuous, so the cycle should begin again immediately by identifying another measurable inefficiency.
The first two steps in the process improvement checklist – identifying inefficiencies and defining inefficient processes – are most critical, because they lay the foundation for everything that follows. But before a hospitality manager or executive can identify inefficiencies in his or her own operation, a working knowledge of overall industry performance must be developed.
Common hotel processes where inefficiencies might be found include:
Another place to look for inefficiencies is within the day-to-day business. Bookkeeping, payroll services, human resources and other duties might be better performed through business process outsourcing (BPO), and an effective “do or buy” analysis might be in order.
Finally, any change that is implemented in the pursuit of greater efficiency must be sustainable. When Starwood implemented Lean Six Sigma in 2001, it did so full-speed ahead, change leading to change, improvements building on improvements.
According to a peer-reviewed, 2015 tourism study published by Science Direct (“Lean Hospitality – Application of Lean Management Methods in the Hotel Sector”), Starwood’s transition to lean techniques led to fast, measurable financial returns: a 19% increase in incremental revenue and a 12% increase in on-property spending by guests.
One final point about process improvement: Gains must be sustainable. Starwood’s McGuire told the Fast Track publication that the hotel giant fell into a “trap” of adding more and more changes without properly integrating the new ways of doing business.
“We consciously had to make a decision to roll out fewer initiatives,” McGuire said, “and put more emphasis on how we managed behaviors and reactions to the new initiatives so the line associates would embrace the change.”