Ant colony optimisation is a problem-solving technique inspired by the behaviour of ants searching for food. Initially, ants move randomly until one discovers a food source and marks the route leading to it. Over time, however, the trail fades, encouraging the ants to explore alternative routes and search for new food sources. As a result, the colony gradually identifies the most efficient route while continuously optimising the path to its destination.<\/p>\n\n\n\n
Technological progress has always caused a certain degree of concern. We worry that technology is becoming too complicated, increasingly independent and, above all, that it may eventually replace us in the workplace. On the other hand, few of us can imagine functioning today without a smartphone or Internet of Things (IoT) applications. The Internet of Things has become one of the most important modern technologies. IoT applications are present in kitchen appliances and cars, while connected thermostats can transmit information directly to our phones.<\/p>\n\n\n\n
In industry and services, IoT technology includes cloud-based computing platforms that provide access to data from virtually anywhere, enabling ongoing reporting and real-time business decision-making. These applications use machine learning algorithms to analyse large volumes of data collected from multiple sources. Through dashboards and real-time alerts, we receive information about performance indicators, statistics and working hours.<\/p>\n\n\n\n
Business performance is the result of activities relating to both revenue and costs. Without revenue, a hotel cannot generate income. Without effective cost control, however, potential earnings may be absorbed by excessive expenditure. Therefore, the most important objective in hotel management is achieving profitability<\/strong>, both across the property as a whole and within individual departments. The final stage involves assessing the hotel’s position in the market.<\/p>\n\n\n\n How, then, should we use technology to support our daily operations? Above all, technology should provide tools that simplify processes, deliver ready-to-use and flexible databases, and highlight changes<\/strong>. Without a clearly defined strategy, an established budget and realistic expectations regarding hotel performance, technology alone will not generate profit.<\/p>\n\n\n\n Starting with revenue, developing a hotel revenue management strategy involves answering a number of important questions. The objective is to prepare scenarios that determine how the system should respond to changes in market conditions or within the property itself.<\/p>\n\n\n\n These scenarios reflect the way we manage room rates. Consider the following example: 15 days before guests are due to arrive, hotel occupancy stands at 50%, and room rates are maintained at 10% below the average rate of the competitive set. Once occupancy exceeds 55%, however, we want our prices to match the competitor average. When occupancy reaches 80%, competitor pricing is no longer our primary consideration. Instead, we analyse hotel occupancy and booking pace, increasing rates more aggressively to optimise profit.<\/strong><\/p>\n\n\n\n The advantage of introducing multiple scenarios into a system is its ability to respond flexibly to different market situations. The system will adjust the pricing strategy as soon as the defined occupancy threshold is reached, whether this happens in the middle of the night, over the weekend or while the revenue manager is on holiday.<\/strong><\/p>\n\n\n\n It also helps prevent lost revenue opportunities. Small adjustments made by the system, such as regularly increasing published room rates by \u00a32, can make a significant contribution to annual revenue. When preparing scenarios, it is important to account for the hotel’s seasonality in as much detail as possible. We should also consider how different days of the week perform during different seasons. A Monday during the school holidays is not the same as a Monday during a quieter period.<\/p>\n\n\n\n The next step is to determine how to select the competitive set, or compset<\/em>. Location is the most common criterion, but other factors can also be considered, including the relative importance of individual competitors, property segmentation, the range of services offered and their attractiveness to the target audience.<\/strong><\/p>\n\n\n\n Once a dynamic competitive set has been established, we can allow technology to do the work for us. Using a rate shopper provides access to an extensive database. Regular reports enable us to identify trends and compare numerous offers across different configurations and booking windows. More advanced systems, such as proRMS<\/a><\/strong> by Qualpro, not only analyse market conditions but also compare them with the hotel’s occupancy levels and recommend appropriate room rates and restrictions.<\/p>\n\n\n\n The fundamental question when establishing a sales strategy is whether we should focus on increasing occupancy or prioritise higher room rates. During the low season, an occupancy-driven strategy seems natural, as maintaining cash flow is often the main objective. In the high season, increased demand suggests a greater focus on optimising room rates. However, in both scenarios, we should already be asking questions about costs.<\/p>\n\n\n\n Every sales decision should be considered alongside the expenses associated with it. Higher occupancy means more staff or overtime, as well as increased laundry and housekeeping costs.<\/strong> Effective cost control is essentially about organising data and reporting it regularly. Scattered information, such as expenses that are not assigned to the correct department and are instead grouped under a general category such as ‘kitchen purchases’, offers limited analytical value.<\/p>\n\n\n\n When examining departmental profitability, we need to identify precisely which revenue and costs belong to the same cost centre. Separating kitchen purchases into food and beverages gives us a clear understanding of food cost and beverage cost. This, in turn, allows us to identify problems in specific areas. Organising the chart of accounts is the most important step in cost management and accounts for a substantial part of successful expenditure control.<\/p>\n\n\n\n With a properly structured chart of accounts, we can fully use technology to obtain valuable management information. Through automated connections with hotel management and accounting systems, we can receive revenue and cost data regularly throughout the month. This eliminates unnecessary manual work, reduces the involvement required from the accounting department and avoids time-consuming comparisons between separate reports.<\/p>\n\n\n\n Business analysis is often perceived as a highly complicated process belonging to the field of financial controlling. Nothing could be further from the truth. With an organised chart of accounts, we can compare data using a consistent framework. Consider a simple example.<\/p>\n\n\n\n A hotel’s breakfast costs amount to \u00a310,000, while the revenue attributed to breakfast is only \u00a33,000. Instead of generating a profit, the department appears to have made a loss. Several questions immediately arise. Has all breakfast revenue been recorded? Was the revenue allocated to the Food & Beverage department, or was it perhaps assigned to Rooms?<\/p>\n\n\n\n We should examine costs in the same way. This type of analysis is well within the capabilities of any hotelier dealing with the everyday challenges of running a property. Delayed data updates and financial results delivered two weeks after the end of the month highlight the importance of time in business decision-making.<\/p>\n\n\n\n Technology enables us to analyse costs on an ongoing basis and manage financial performance more effectively. Modern systems allow for daily analysis, showing the balance between revenue and costs and helping identify the actions required to maintain hotel profitability.<\/p>\n\n\n\n The first and most important step is to organise the chart of accounts. In practice, when purchasing cleaning products from a single supplier, we should ensure that each department is charged for the products it actually uses. Separating costs in this way allows us to identify the people responsible for product consumption. It also makes expenditure more transparent and helps pinpoint areas where savings may be possible.<\/p>\n\n\n\n<\/span>Revenue management scenarios<\/span><\/h2>\n\n\n\n
<\/span>Hotel sales strategy: occupancy or higher room rates?<\/span><\/h2>\n\n\n\n
<\/span>Business analysis and hotel financial performance<\/span><\/h2>\n\n\n\n
<\/span>How to implement hotel cost management and improve profit control<\/span><\/h2>\n\n\n\n