Standard Operations
Melrose Hotel Company streamlines operations by standardizing back-office software.
By Rebecca Oliva, Technology Editor -- HOTELS Magazine, 8/1/2003
When Melrose Hotel Company, Philadelphia, standardized its back-office system in January it cut data entry time significantly. And not only is this upscale hotel operator now able to view all financial reports at the corporate level, but it also can automate almost all of its data processing and reporting.
Previously, the company was running various accounting platforms at each of its four urban properties. The corporate office found it difficult to track the spending of the different properties because each had its own back-office system and standard method of accounting. Furthermore, it was a great burden on the corporate office to compare profit and loss (P/L) reports and 12-month running forecasts.
Now, by using Aptech Computer Systems’ Profitvue, an application service provider (ASP)-based back-office system, all properties use the same standards allowing for more efficient management.
“Our goal was to create a common platform within our four existing hotels,” says John J. DePaul, president and CEO of Melrose Hotel Company. “It evens the playing field for all accounting packages.”
The Benefits Of Standardization
Profitvue is a Web-enabled back-office solution
that can handle single or multi-property accounting. It features accounts
payable, general ledger, budgeting, forecasting and
more. Melrose uses Profitvue in combination with Aptech’s Execuvue, a program
exclusively for executive offices that automatically “cubes” data
after it has been entered. Once data has been entered at the property
level in Profitvue, Execuvue business intelligence software spins
nightly cubes and automatically transmits that data to Melrose’s
headquarters for analysis each morning. Each report, or cube, is condensed
data that is categorized according to Melrose’s specifications
for easy viewing and comparison.
One of the most popular cubes is a daily scorecard, according to Jill Wilder, vice president of Aptech Computer Systems. The scorecard provides hotels with trending and performing information and the variance between forecast, actual numbers and last year’s performance. The corporate office then can manipulate that data to produce a multitude of reports.
“Now that we have an automated, common platform of reporting we have the ability to query financial questions without burdening the property level director of finance with time-consuming data collection,” DePaul says. “They can spend their time actually analyzing the data and less time finding and inputting the data.”
By standardizing the back-office system, Melrose also has readied itself for future growth. Profitvue has an add-on component that automates the chart of accounts, the standard method used in accounting. Therefore, each property uses the same numbering system, making it easier to compare and contrast hotel performance. “As we acquired hotels, we took whatever chart of accounts and back-office systems were there,” says Melissa Hauser, director of finance for Melrose Hotel Company. “It was difficult to look across all the hotels and compare cost per occupied room by position, housekeeper or cleaning supplier. Now, having all our properties on the same chart of accounts makes it much quicker to extract the data and to bring new hotels on line.”
Reducing Time
Aside from centralizing the reporting and accounting
process, Profitvue also reduces the report processing
times. “Every
report we used to do manually can be duplicated in either Profitvue
or Execuvue,” Hauser says. DePaul and his team are able to condense
data much more quickly than before. “Instead of getting financial
reports on the 15th of the month, I can look at my P/L on day two
of the closing process and manage the close,” he says. Melrose
reduced its closing time from 14 days to 10, but DePaul says he aims
for a closing period of five days. “The most significant ROI
is time,” DePaul says. “There has been a significant savings
already each month as the system gets established.
We can plug and implement our chart of accounts well before closing
instead of waiting for the close of the acquisition to physically
get access to the accounting office.”
With the new system in place, Melrose is migrating toward a more efficient way to use its accounting tools to realize financial benefits. One best practice Hauser is eager to implement is a rolling 12-month forecast to avoid the grueling once-a-year budget process. “People tend to look more at the trailing 12 instead of the rolling forecast,” Hauser says. “Once we get our forecasting data loaded into Profitvue, we will be able to concentrate more on the rolling forecast using the information provided by the trailing 12 months.”
HITEC in Reveiw
Technology should not replace good human relations
was the resounding message at this year’s HITEC conference held late
June in New Orleans. Speakers and panelists at the general sessions
and seminars stressed that technology is secondary to good customer
relations. Speakers demonstrated ways in which hoteliers could use technology
to better market their hotel services to achieve superior customer relationship
management (CRM). This customer-centric focus also means
combining high-tech with high-touch as a hotel’s major point of
differentiation from another brand. Seminars focused on the wireless
revolution and solutions to solving many of the challenges of Internet
distribution. Other buzz words heard throughout the week included “privacy,” “connectivity,” “integration” and “enterprise
solutions.”
“Most people don’t change because they see the light, they change because they feel the heat,” was the warning posed by marketing expect Don Neal at the opening of the second general session entitled “Return On Technology.” Here, Neal stressed the importance of being a technology leader, not follower, and on building relationships and customer loyalty in this “era of higher expectations.” Neal stressed the differentiation between marketing services and marketing products, citing the “intangible human factors,” which set the two apart. He warned the audience that two-thirds of customers defect from a brand due to neglect and emphasized the importance of aligning a CRM strategy with business objectives in order to build that brand relationship.
CRM: Not Just Technology
More hotel companies are getting on the customer
relationship management (CRM) bandwagon. But, as many of the hoteliers
pointed out at the show with 4,500 attendees and more than 600 booths:
Collecting the data is easy, figuring out what to do with it is more
difficult. “You
can collect a lot of good data, but if you can’t see it, store
it or protect it, it is of no value,” said panelist Bruce Small,
director of sales information systems at Hyatt Hotels
Corp.
At this seminar entitled, CRM: Sales and Marketing Applications, panelists discussed CRM strategies as they relate to both independent and chain hotels. They shared data with the audience that revealed less than 25% of the CRM initiatives in 2001 had concrete results in 2003.
Jens Thraenhart, director of Internet strategy at Fairmont Hotels & Resorts, suggested using a hotel’s Web site to build relationships with customers as well as capture data. “The benefits of building a relationship on the Web are there. You need to create a Web site with the users’ experience in mind,” Thraenhart said. He suggested using fewer downloads, more interactive tools, security encryption and ensuring that content is accurate.
GDS And Beyond
Another important seminar focused on the role of
the global distribution systems (GDSs) and how the Internet has changed
it. While many customers have started booking their
own hotel rooms over the Internet, leaving behind the travel agents,
panelist Jerry Murck, vice president of hotels relations and consulting
at WorldTravel BTI, said, “The GDS is still the most efficient way to handle
reservations.” Murck stated that 90% of hotel reservations go
through the GDS.
Alyson Dombey of Partners-in-Marketing said she believes that the concept of the GDSs must be broadened if it is going to continue. She noted companies such as Galileo, which is looking to capture more markets, and Worldspan, which positions itself as a technology company. “The GDS role is very much not just an intermediary anymore—within the cost model, there is a lot of movement.”
Ask The Experts
Consumer privacy was one of the major issues addressed
at the informative Ask The Experts session. “Sooner or later
a guest is going to be asked if they want a feather pillow again,
and there’s going to be lawsuit,” said an only half-joking
Mark Haley, partner, The Prism Partnership. As privacy
laws vary from state to state, Haley told attendees that new legal
issues related to CRM and the Internet will no doubt arise. How hotel
companies address those legalities remains to be seen, the panelists
agreed, as it is a chapter not yet written in the legal books.
Another hot topic on the minds of conference attendees was whether or not to charge for high-speed Internet access, as one attendee noted the recent “competitive pressure to give it away.” Panelist Jon Inge, president of Jon Inge & Associates, offered the opinion that “within two years time [I predict] there will be no charge for in-room high-speed Internet access. However, charges will continue in meeting rooms.”
Emerging technologies, channel management, distribution and wireless rounded out the main questions and themes of the session, which concluded with a look at self-service. “We are going to see a resurgence in the focus of self-service kiosks, like the airlines are utilizing,” said panel moderator Thomas Murphy, CIO, Royal Caribbean Cruises. Murphy said he thinks the limited-service segment will lead the way in utilizing such “kiosk technology.”
If you missed this year’s conference, the HFTP already is planning HITEC 2004. The show will be held June 22-24 in Dallas, Texas.
New Products, Alliances at HITEC
Among the mass of new products and
partnerships showcased at this year’s
show there were some that stood out among the rest. Here’s a peek
at them.
LodgeNet Entertainment Corp. and Zenith Electronics announced a partnership to provide the lodging industry with a high-definition TV (HDTV) solution. Guests will be able to view digital audio and visual programming through an HD-capable television. Through LodgeNet’s interactive programming, guests can view content such as on-demand movies, music, TV and Internet all over the HDTV standard.
Assa Abloy had a lot to talk about this year. Elsafe introduced an Offline Revenue Share Program, which makes it possible for properties to equip their guestrooms with Elsafe’s safes at no front-end cost to them. Timelox debuted the IR-5 Online locking system, which allows properties all the benefits of a hard-wired system at a fraction of the cost. VingCard showcased the new Dual Card Classic locking system that has smart card/magstripe capabilities. And, INHOVA demonstrated the anticorrosive properties of its new lock, the DONNA extreme. This lock is designed to withstand inclement environments and condensation.
SAFLOK introduced eSECURE, a Web-based electronic lock system that requires no capital investment. Properties receive the benefits of a high-tech electronic lock and only pay based on occupancy.
MICROS debuted the Opera Gaming interface. The interface bridges the gap between the casino player tracking system and Opera’s property management functionality. The new gaming and comp accounting features allow properties to provide complimentary goods and services to guests by routing selected transactions to special billing screen windows.
Metropolis Technologies rolled out a new addition to its suite of call accounting products at HITEC. ProfitWatch Hotel Call Accounting for the Web allows users access to their ProfitWatch systems from anywhere with an Internet connection, allowing them to check system status, create reports, receive alerts and update rates remotely.
IR Recognition Systems showcased its Hand Punch 1000, designed for companies with fewer than 50 employees and require a simple time and attendance system. The system has a red/green light indicator and eliminates badges and “buddy punching.”
Galaxy Hotel Systems, provider of property management systems for the hotel industry, featured its new Linux-based operating system, available this fall, with demonstrations to explain this low-cost alternative aimed at small and mid-sized hotel operations. With Galaxy, hotels facing budget constraints now have the option to install Galaxy/UX on Linux hardware. Even existing customers can update their hardware platforms, lowering their ongoing support costs.
Security Innovations showcased Access-Plus On-Line Access Control, which features real online security integrated with property mapping and CCTV. It enables alarm events to be quickly located on-screen and in real time.
STSN announced Merlot Communications formed an agreement whereby STSN will offer Merlot VROOMService HSIA to their customers worldwide.
Wayport showcased Cyber Café, which provides meeting attendees with fast, convenient access to corporate and Web-based e-mail during meeting breaks. This service was specifically designed for meetings that don’t require everyone in the meeting use a simultaneous connection to the Internet (i.e. Wayport’s eMeeting Service.)
PrintMe by Electronics For Imaging showcased its mobile printing technology and announced the rollout of its product to more than two-dozen major airports, from Atlanta to Singapore. Demonstrations during the show highlighted the state-of-the-art functionality, which allows users to print full-color documents from any handheld or wireless device and laptop to any PrintMe-enabled printer without complex set-up, software or IT support.
Onity showcased the HT28 Smart electronic locking system, which provides 90% of the power and efficiency of an online system at 1/5 of the cost. The HT28 Smart combines the read/write capabilities of smart cards with Onity’s Revalidator to achieve the two-way communication between the locks and your main computer system with 99% fewer wires than traditional hard-wired systems.
Management Technologies released WebSOS, a suite of enterprise-wide, Web-based and thin-client service order solutions built around the Espresso! Family of Products. The products help hotels execute and manage a focused quality management program. Features include guest response/CRM, PMS Import, paperless preventive maintenance and more.
Newmarket International introduced Delphi.Net, an Internet-based sales management solution for the cost-conscious mid-scale and limited-service hotel companies. Delphi.Net is designed to run over the Internet as an online solution. Users pay a monthly fee per each person utilizing the system.
Lexington Services announced LexBook — its new hotel Web site booking engine that enables hotels, to manage and control inventory and increase revenues through their own Web site. Through LexBook, Lexington hotels can increase bookings by allocating room inventory, rates and booking restrictions to their property’s Web site with total integration into Lexington’s central reservation system.
StayOnline announced that it will be marketing its high-speed, Wi-Fi Internet services together with the AT&T Wireless brand at participating StayOnline hotel locations.
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