Part 3 - ANALYSIS - Improving performance and achieving success in hospitality

FIVE YEAR PLAN  - ANALYSIS

'The successful man is the one who finds out what is the matter with his business before his competitors do.' - Roy L. Smith

There is a danger that many hospitality business owners believe they know everything there is to know about their business, based on what they like themselves. They have never conducted a thorough analysis of their customers, competition or the market. This they perceive to be an unnecessary waste of time and expense. The only trouble with that view is that the hospitality industry is constantly evolving, so without keeping up with the changes, they could eventually become extinct!

Don't become a hospitality Dodo!

In our opinion, it's vital that a business conducts the required research in all aspects of the business to remain relevant and successful long term.
  
In our previous article - 'FIVE YEAR PLAN' (Part two in the series on Improving performance and achieving success in hospitality), we examined developing a marketing plan and marketing strategy. Here, we will delve into the analytical detail required by a business, in order to provide the data upon which important decisions can be based.

Competitor Analysis
Conducting a competitor analysis is an essential part of your five year plan. It will help you make strategic comparisons between competing businesses on critical success factors, assess your direct competitors and allow you to use the results to make future planning initiatives to change or enhance performance.

It has never been easier to find out everything there is to know about your competitors. Internet search engines, social media and review sites have opened up a new world of knowledge. We can gain an in-depth understanding of our competitors' pricing, menus, accommodation, facilities, target audience, quality of product, staffing, customer engagement, marketing initiatives; in fact, everything you need to prepare a complete picture of who and what you are competing against.

Review sites especially have opened up a once private window into a business. Now, everybody can see our dirty laundry hanging on the line. Guests and diners are willing and able to cut through the rhetoric and give their frank and honest assessments in graphic detail (photos, videos and all!). There might be the odd exaggerated claim, but the consensus of the many doesn't lie.

Firstly, produce an analysis sheet and consider the following:

• List your competitors

The analysis starts with the list of who you identify as your chief competitors. However, careful consideration should be given to companies who might compete indirectly and new businesses entering your market. Travelodge are investing £243 million in new hotels and new bedrooms in 2013.

(If you think competition in the UK is tough, consider China. The Chinese market is expected to overtake the USA as the worlds largest by 2025 with an estimate of 6.1 million hotel rooms climbing to 9.1 million by 2039.)   

Once the list is compiled, highlight those competitors that will prove the greatest challenge.

• List the items for comparison

Identify what you want to compare against. For instance consider the premises; location, appearance, parking and décor etc. The product offering; breakfast, lunch, dinner, specials board, bar menu etc. The accommodation; facilities, WiFi, satellite TV, iPhone chargers, courtesy tray and mini-bar etc.   

•  List marketing activity

Review websites, social media platforms, signage, press releases, newsletters and publications etc. 

• List service standards

To assess your competitors' service standards, you will need to make a visit to the property and assess the quality of service offered. Ordering a coffee is usually adequate enough to allow you to make an appraisal. Telephone their reception and judge attitude, clarity of speech and upselling skills etc.

• Assess your business

Once you have completed your list, rate your own business. Consider employing a secret shopper to assess your operation but above all, be honest. Looking at your own company's performance and standards can be very revealing. This will create a benchmark against which you can identify the gaps.

Customer Analysis

Who are your customers? Let's ask another question, are your customers the ones you really want? Wouldn't it be good if we could entice just the good ones with the highest disposable income? Better still, if they all carried a flag, so we could pick them out of the crowd. Unfortunately, it's not that straightforward as we all know. Someone once told me that you get the customers you deserve! That certainly stopped me complaining.

Actually, potential customers do provide some clues. We can judge them on gender, what they wear, how they talk, by their buying habits and how they communicate. These are accurate signs but it's a really expensive business trying to find them by mass media advertising to the general population.

Therefore, you need to segment your customers into groups to initiate a targeted approach to your marketing activity. Once identified, you will better know what services matter to those guests, what to offer them, how to reach them and identify opportunities to attract more of them.

There are generally four ways to segment the market:

• Geographic (rural, city, local, national, international etc.)
• Behavioural (new or loyal guest, negative or positive attitude, status etc.)
• Psychographic (personality, lifestyle, values, interests etc.)
• Demographic (age, gender, family, occupation etc.) 

.....and four main customer segments to consider:

• Individual leisure guests
• Group leisure guests (tours, weddings, functions etc.)
• Individual business guests
• Group business guests (meetings, conferences, training etc.)  

Customer segmentation therefore allows you to use the right media, with the right message to reach the right person(s) in the most cost effective way.

S.W.O.T Analysis
The final piece of the analysis jigsaw for your five year plan, and a key contributor to the competitor and customer evaluation, is to conduct a S.W.O.T. analysis.

 

• Strengths - exploit, publicise and design your offers around your strengths.

• Weaknesses -  identify, minimise and overcome your weaknesses.

• Opportunities - evaluate and use as a basis for future action.

• Threats - draw up contingency plans to challenge and overcome the threats.

Who compiles your SWOT analysis?
We at Hospitality Skills believe the whole management team should be involved in this process. The more contributions, the more dynamic the conclusions. Each will bring a different perspective to the table and often provide very useful submissions.

Next time....Part 4 - We'll examine the next elements of your five year plan for 'Improving performance and achieving success in hospitality'.

For further information about Hospitality Skills and our services please contact us here:
David Allen
Co-Owner Hospitality Skills
www.HospitalitySkills.org
LinkedIn
Facebook                   
Twitter

                           
In addition, we would welcome you to join the Hospitality Skills Group on LinkedIn where we share best practise in hospitality and would value your input.

Join here: HOSPITALITY SKILLS GROUP

Part 2 - FIVE YEAR PLAN - Improving performance and achieving success in hospitality

FIVE YEAR PLAN

"Catch a man a fish, and you can sell it to him. Teach a man to fish, and you ruin a wonderful business opportunity." - Karl Marx 

In this series of articles, we at Hospitality Skills are examining and discussing the issues surrounding the hospitality industry today. Our aim is to proffer ideas and solutions to businesses looking to improve performance and attain ever greater success. We wish to inspire dialogue with people who are as passionate as we are about raising standards in the hospitality industry and to share best practice from the many years of combined experience.

In part one, 'Having a Vision' (25th July 2013), we looked at the reasons for developing a 'vision' for the business and the thought processes involved. In part two, we will concentrate on developing the content of your five year plan.

Let's first address the time frame. Why five years? Why not one or ten? There is no right or wrong time scale for laying out your vision for the future, it's down to individual circumstances. Whatever it is, the process is the same irrespective of the duration. 

In this article, we will look at a five year plan as this is the time-frame generally required by investors looking for their annual return. 

Often, writing a business plan is seen as a process for new start-ups, but that couldn't be further from the truth. Its use is more prevalent amongst established companies than is typically understood. Planning is about assessing possible future events and making decisions based on those findings. It's also about trying to minimise potential risks using information available today to help you make better decisions.

"Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning, and focused effort." - Paul J. Meyer

We at Hospitality Skills believe it is essential that you have a five year business plan. Remember, you can't hit a target you haven't got!

Illustrated below are a number of steps to help you create the content for your plan. We'll examine some of the elements.

Executive Summary

The first page of your five year plan is actually the last one to be written, as it's a summary of the whole and arguably the most important element within the document. The reason for this is that it's often the only part of your report that will be studied by readers. Therefore it should contain a brief outline of the proposal, background information, concise analysis and the main conclusions of the plan.

The prerequisite of the executive summary is to familiarise the reader with the larger body of material without having to read it all. It will also become an invaluable reminder to you, the author, and worth keeping to hand to re-read regularly as you progress through the stages of your plan.  

As a guide, your executive summary should be no more than about ten percent the size of the whole document. 

Mission Statement

Essentially your mission statement answers the question 'why do we exist?' It's designed to direct the actions of the business, clarify its overall objectives, present a path and guide decision making. It provides a framework within which the organisation's strategies are formulated.

Here are some suggested elements for your mission statement:

• Business aims
• The market
• Your customers
• Products and services
• Value
• Quality
• USP (Unique Selling Proposition)

Examples of mission statements:

Starbucks 

Our mission: to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time.

Hilton Worldwide

To be the pre-eminent global hospitality company - the first choice of guests, team members, and owners alike.

  

Business Background

The business plan background is the detail of the company's history to date. What your main purpose was for starting or taking on the business and the origin of those ideas. The progress you have made to date, identifying the main challenges faced and overcome, as well as the on-going issues and how you intend addressing them. It's an opportunity to include your own business background and that of the members of your team, their technical skills and areas of expertise. 

Highlight why you are different, any advantages you have over the competition and how you are geared up to meet the future needs of your guests. Demonstrate your successful track record. 

Be upfront and frank about any disadvantages or weaknesses you feel the business has. This shows integrity and inspires confidence. Conclude by providing an outline of your main goals and a brief explanation of how you plan to get there. Keep this section concise and we suggest you avoid inessential personal details.

Product Description

Here you can add details about your current accommodation, restaurant, bar, leisure or whatever products and services you offer and how your five year plan will bring about changes. Include all your key departments; reception, housekeeping, maintenance etc. This is where you can extol your vision for the future and highlight the intended improvements.

 

Marketing Plan

The foundation of an effective marketing plan is having a clear marketing strategy with the aim of achieving increased sales and a sustainable competitive advantage. The strategy portrays a longer term view with a tactical plan showing details of specific actions over the first year.

Conducting a marketing analysis initially, will highlight market conditions and current economic factors that are in play. From this you can develop a comprehensive blueprint, identifying the company's target markets, overall marketing efforts and sales promotions.


To help you construct your marketing objectives use the 7 P's:

1. Price
2. Product
3. Promotion
4. Placement
5. People
6. Physical environment
7. Process

The marketing plan will therefore outline the basic aims of the business to provide the solutions to achieve the desired accommodation occupancy, leisure membership, food and beverage sales etc. whilst meeting the needs of the customer. However, the most important element of the plan is to ensure it is measurable. Without the ability to monitor progress there is no way of gauging success. 
 

Next time...Part 3 - We'll examine the next elements of your five year plan - Improving performance and achieving success in hospitality

For further information about Hospitality Skills and our services please contact us here:

David Allen

Co-Owner Hospitality Skills

www.HospitalitySkills.org

David@HospitalitySkills.org