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to Spot Unnecessary Expenses . Operators integrate data from time/attendance systems, PMSes to control their largest variable expense |
PITTSBURGH, PA - May 27, 2009 � As rising labor expenses take
an increasingly bigger bite out of property revenues, hotel companies are
controlling the impact with business
intelligence (BI) tools that provide new visibility into operating
costs and profitability.
At most properties tracking labor costs is handled by automated time and attendance systems, but calculating labor as a percentage of revenue is still primarily a manual operation. However, automated solutions that integrate data from third-party time and attendance and property management systems (PMS) are adding greater awareness of the role labor costs play across hotel groups. Labor is the largest controllable expense for hoteliers, so fast response to inappropriate labor costs is enabling operators to make better decisions on staffing that improve profitability. ZMC Hotels in Duluth, Minnesota, is one company achieving results with the help of BI labor data analysis. By using BI to automate the integration of daily labor costs and revenue data, ZMC has achieved significant results that include:
Largest offenders on top ZMC also uses BI to assess overtime expenses for each property. �Our reports rank our hotels by the percentage of payroll expenses to revenue per property,� said Raija Macheledt, chief financial officer for ZMC. �It is a very powerful measurement because we are constantly striving to schedule work so staff does not have to use overtime. The report tells us how well our managers are actually meeting that goal from department to department.� The reports are light years ahead of the old process of manually assembling overtime data in an Excel spreadsheet�the way ZMC used to do things before implementing Execuvue. �It used to take two weeks after a payroll period ended to produce a report,� said Lange. �Now supervisors can react more quickly because they have the reports three to five days after the payroll period ends. As a company, we�re more in tune with what our properties are doing and can manage them better. Plus, the data is more accurate because we have eliminated keying errors.�
For another company using the BI system, Highpointe Hotel Corporation, it took Hurricanes Ivan and Katrina to reveal the importance of carefully monitoring daily labor costs. �Because of the regional labor shortage after the storms we had to go to a weekly payroll in our New Orleans properties,� said Mark Pate, Highpointe�s assistant controller and IT director. �Our time/attendance system did not accommodate the flexibility we needed for daily, weekly, and YTD labor expense comparisons. Now Aptech enables us to compare actual vs. forecast measured against prior year as often as we need to. We can quickly spot labor costs that are outside the norms. It might be an executive housekeeper has overstaffed, or maybe the front desk is using an inappropriate schedule. Execuvue highlights the variances in each property�s operating metrics. Having current information on labor and other expenses as a percentage of revenue is a powerful management tool to control costs.� Aptech
Computer Systems
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