Dear Customers,


It is of utmost important to understand what issues are facing an organization and how software investments can make a difference. What are the solutions that will best support and thrust your business forward and what value can be achieved? Quantifying IT decisions and the anticipated returns can be the hardest hurdles for top management to overcome. To differentiate IT terminologies involved and to separate the relevant from the legacy and today versus tomorrow is a challenge especially when current industry standard software fails to meet business software best practices.


One terminology that we have been championing is Integration. The implementation of business software is to follow best practices and reengineer and optimize business processes. Unfortunately, many in the Hospitality industry are still implementing Interfaced based software, thinking it is a best practice. Whilst other industries have realized that this is outdated and moved to fully integrated software systems, Hospitality is still a stuck in lower gear and confused between integrated and interfaced.


An Integrated Hospitality Management System for sustainable savings can be viewed to be a closed loop approach that reduces cost and increases compliance. In lay term, assume that integrated is represented by a single chef, which can cook 7 separate dishes. Interfaced, on the other hand, is an open loop process with distinct communication needed between the modules, represented by 7 chefs, each one cooking their own personal dish but sharing only one gas stove. A truly integrated system would be cohesive and classify the flowing data within a single system, as opposed to an interfaced environment where information is flowing from system to system and data integrity could be affected when the bridge between the systems break down. Cost saving benefits can also be significant, especially when each module in an interface environment requires separate hardware, very much synonymous with the wages of the 7 chefs. The fear of having a total failure of all modules in an integrated environment is eliminated when one understands the technology supporting an integrated system. Database replication and also system restore points, coupled with physical hardware mirror back-up ensures that an Integrated system is always up and running, with a proven statistic of 99.99% uptime delivery. momentohs®, for instance, optimizes the latest Microsoft SQL Server 2008 technology which is self-tuning, self-organizing and self-maintaining. Database synchronization between the mirror servers is real-time, like having an exact clone chef for back-up, just in case the solo chef is not feeling too well. Organizations stand to gain real sustainable savings by transforming fragmented interfaced operations into one fully integrated system. However, the majorities of current industry standard software are interfaced and continue to win favor.

 


 

Data delivery in an integrated environment will be instant with easy access to relevant information. Monthly reports, especially those that are needed for strategic decisions, have to be delivered on budget, on time…real time and not 10-15 or even 25 days later. Interfaced environments suffer from the tedious re-routing of data between systems, whereby data has to be audited for accuracy and consistency before the results can be churned out onto sheets of reports. The extended timeframe between the moment the report is requested and the actual report is delivered can be up to 5-20 days or more in an interfaced system, especially multi dimensional business intelligence reports. Far too late to have any meaningful benefits.

Today, where software systems are fast evolving and other industries rapidly adapting to it, the call to implement best practices in the hospitality industry should have been a long time ago and that is integration, integration, integration. The heart of an integrated system which makes momentohs® tick is its single, unique, ironclad structured database. It unifies technology components into a single platform, enabling organizations to reduce software complexity and obtain more business value from their IT investments. What hoteliers need to do is to articulate and communicate a 10-year road map that aligns business and IT. It is essential to treat your IT investment as a “portfolio,” complete with infrastructure transactional, informational and strategic assets, and to look at it as a 5-10 year program. The chef issue has been settled, what the industry need is to pull in the diners.

 

Mehboob Hamza
(mehboob@sscomp.ae)

 

 

Pump Up the Revenue, Not the Volume - Part Two

By Jack Chang Chin Liang, Project Executive, Seven Seas, Malaysia.

The hospitality industry is still suffering from the current economic crisis. The past decade has not only seen the greatest gains but has also witnessed the greatest losses. Just as the industry was bravely recovering from the Sept 11 aftermath, and booming in 2005, the world economy in 2008 entered, what is often described the “The Great Recession”. Two years on, the hospitality industry is trying hard to bounce back to its once glory days, in line with the airline industry, and in the process of reclaiming lost ground as an industry, the methodology and process in churning out profits and gains has somewhat evolved. This industry has historically measured itself with a standard metric used globally – Revenue Per Available Room (REVPAR) and Revenue Per Available Customer (REVPAC).



With so much evolving in the past decade, in terms of how business transactions are conducted, technology has digitized our life. Is it still considered that REVPAR and REVPAC is the best yard stick to gauge the performance of a hotel’s performance, or does it paint a cob web picture? REVPAR measures the industry’s fundamental structure, literally and physically, the latter on the revenue generated on the physical assets (hotel rooms). It is a foregone conclusion that REVPAR is now obsolete in today’s technology driven world, and it is of utmost importance to know that technology is not just merely a way to boost productivity but a critical and profitable-channel for delivering (new and additional) customer-oriented services. The most profitable hotel organizations of the 21st century will be those that are able to capture the increasing purchasing power of the customers – regardless whether they are in the hotel compound or for that matter, anywhere in the world. Then, in comes REVPAC, which cast customers under the limelight as the fundamental driver of value creation in the hospitality industry and not the physical assets of rooms anymore. REVPAC came with all the hype and excitement on how to use the latest tech gadgets and rocket science technology to ease and please guest. But it was not soon after that most people found out that REVPAC was only possible to a small, unique league of hotels. Those that have bottomless coffers to implement tomorrow’s technology, hoping that the revenue generated from their ‘gemstone’ guest would balance out their investments for such implementations. Some fell short, some made it through, and some suffered with the beta-version technology that was not fully tested nor certified. It was then that revenue optimization analysts went back to the drawing board once more, going back to REVPAR but this time tinkering around with the formula on how to incorporate the benefits and strength that REVPAC had to offer. They knew that the current and traditional revenue centre’s such as food and beverage had to be accounted for, with some whizz technology flavoring here and there, just nice, so as to make it logical and reachable to the industry as a whole, and not just the ones with limitless funds.

With that, comes the birth of a new approach - Gross Operating Profit Per Available Room (GOPPAR). GOPPAR is a yardstick on the profits registered by hotels and is directly linked to the capacity in terms of rooms and has an open variable that would vary from hotel to hotel, which is the ‘operating profit’. It was time that people realized that what mattered most in business operations are profits and not just revenues (top line). GOPPAR offers a holistic approach in optimization, as it captures the aerial view of all revenue centres’ that has contributed to the profit for a particular guest during a defined timeframe. Revenue centre’s include but are not limited to food and beverage outlets, internet services, spa centre’s, karaoke outlets, e-cash cards or e-wallets in the hotels premise and so on. The latest technology can be deployed at large or even sprinkled lightly, and still, GOPPAR would be relevant for each and every hotel. Another point that makes GOPPAR a perfect KPI (key performance indicator) is, since gross operating profit is defined by the various revenues subtracted by the operational cost, it enables one to have a significant internal insight on the efficiency and cost control within. It’s like having a drilled in, in-depth performance appraisal on the hotel’s operation as a whole by just touching the surface of a few parameters. In addition, GOPPAR provides an overall more robust performance measurement, especially when comparing the fiscal financial sheets of hotels with different capitalization or in different markets. Furthermore, GOPPAR has a significant correlation with a hotel’s bottom line and thus its underlying value as a whole.



In the years to come, drastic changes will take place in the hospitality industry especially in creating value for customers as revenue is generated behind the scenes while technology and new methodologies are implemented to yet again trim down operating costs. Means of knowing them better and reading their minds and desires in hope of better services which will ultimately result in more profit will be intensified. Management teams will be multi-tasking more than ever, being equipped with operational knowledge for multiple roles. For now, we will do with GOPPAR, as a key performance index to measure the performance and profitability of the hotel’s management and operation till the next wave hits us. REVPAR and REVPAC by all means, but without GOPPAR as the fundamental milestone defeat the purpose of being in business and that is to maximize profits.

The author is a Mechanical Engineering graduate from University Malaya who has previously done stochastic optimization work and research for automobile manufacturers’ Mercedes Benz Malaysia and also Proton Holdings. He has also done internship with Accenture and had a course work attachment with Motorola Technology and is now researching multi-objective optimization for the Hospitality Industry with Seven Seas Computers Sdn Bhd, Malaysia.

 

 

Hotel in the middle of Sahara Dessert


Sahara Inn "Auberge Sahara" is a hotel built on the edge of Erg Chebbi dunes by Bourchok brothers. Erg Chebbi dunes also known as Merzouga dunes are the face of Sahara in Morocco. The hotel is located on the most well-known and attractive oasis in the region of Merzouga owing to its special characteristics of having the highest dates palm trees and to be the preferred site for quite a lot of international movies like "The Secret of Sahara", "Marrakech Express" and "Operation Condor”. The Sahara is 2.5 million years old. Situated in northern Africa, the Sahara stands as the biggest hot desert in the world. Sahara means desert in Arabic. When we say Sahara desert we basically say the word twice but in different languages. The limits of the Sahara are the Atlantic Ocean on the west, the Red Sea and Egypt on the east, the Atlas Mountains and the Mediterranean Sea on the north and the Sudan and the valley of the Niger River on the south.

 

 

 

Considering that the hotel is in the middle of the Sahara Dessert, it take anything between half a day to a full day to reach the hotel from most of the cities in Morocco with the former timeframe for smaller cities and the latter for big cities such as Rabat, Casablanca or Marrakesh. For activities, one can expect camel riding towards the sun rise and set, nomad lifestyle and also glaze the ever shining stars that light up the skies when night falls.

 

 

 

Every front end personnel has surely, at any point in his/her career, experience turning away guest, be it because there were simply no rooms available, guest were not satisfied with the rates offer or even cases where the guests themselves didn’t have enough money with them. For such reservations which are not materialized, the Front Office Manager would then have to either cancel the room booking or forward it to a further date, depending on the hotel occupancy and also guest preference.
 


One nifty tool within the Front Office module of momentohs® which has manage to garner its own crowd of users is the Turn Away feature. It is a very simple tool, yet a practical and useful one, as it helps the front office staff to record down all turned away guest. This information can be very helpful, and at most times is directly connected to the hotels sales and marketing strategy as well as the operational strategy. Since the Turn Away feature is a standalone tool and not directly tied to the reservations section, it means it can also serve as a ticker to keep count on the number of walk-in guests which are turned away. Additional reasons and remarks can be keyed in for every turned away guest and the entry is stored in the system for future reference, emailed or printed out directly for analysis. This Turn Away feature can be maximized with the momentohs® Business Intelligence module and thus, separate it from other systems, as it will analyze and generate graphs and charts which will then lead to revenue maximization decisions.

 

 

Syed Irfanuddin Quadri
Business Solution Services
E mail : siquadri@sscomp.ae
Direct : +971 4 308 3645
Mobile : +971 50 7187292