Effective Use of KPIs in Hotel Management

Hotel management calls for performing tasks like organizing the day-to-day activities (which include reception, catering, reservations etc.), keeping a check on financial supply and demand, promoting the organization via advertising, taking care of the recruiting, hiring and security needs of the firm.

It goes without saying that all these jobs can not be done by a single team. So, formulation of apt number of clusters people with desired qualities is a must. Moving on the same lines, equally important is the appropriate management of the way these teams operate. To achieve this, one can rely on parameters called 'KPIs' (Key Performance Indicators). These when placed at appropriate locations can help the organization meet the goals and objectives in an economical and timely manner.

Info-graphic for hotel

KPIs are frequently put in four directions. In case of Hotel management, these can be- Financial Perspective, Customer Perspective, Staff Perspective and Efficiency. Financial comprises Wage costs, annual operating profit per room, food costs as a % of food sales. Customer Perspective can be had from number of feedbacks, number of complaints received, response rate, etc. Efficiency can be increased by utilizing parameters like room occupancy, rate of sales enquiry conversion, internet bookings, etc. Lastly, staff perspective can be improved by relying on indicators like staff turnover, technological competence of staff and average length of employment.


The very direct and immediate hurdles encountered by business houses working in this industry are the ever increasing number of competitors with the demands of customers getting specific day-by-day, recruiting and training the staff that is competent enough to enhance customer loyalty. Designing and inculcating the right cultural values in the front-end staff is definitely not a child's play. Moreover, when the talk is of hospitality industry, it has to be given its due attention. The job asks for making them understand the reason for existence of the concerned organization and side-by-side, monitoring the way they shoulder their responsibilities. The possible pitfalls in these areas can be averted by structuring a tailored BSC (Balanced Scorecard) with KPIs on them touching every domain which comes under the range 'Hotel management'.

KPIs ensure that the inputs, be it physical, human or financial in nature, are being put to use meticulously and fruitfully. Bringing compatibility in individual and organizational goals is another area where the KPIs find their role. These specific, measurable, actionable, reliable indicators are the thing to consult when the subject is of 'measuring performance'. Once a BSC has been made, in the light of organizational and industrial strengths, weaknesses, opportunities and threats; the top level management can be assured of the successful culmination of short term and long term objectives.

To sum it up, KPIs are the quantifiable measures that come to one's rescue when the need is to own a barometer for gauging the organizational performance. With the scorecard providing a holistic bird's eye view of where the organization is moving, efforts are more likely to come up with favorable results. For the Hotel Management, these help in convergence of resources to make a successful group emerge out of the milieu.

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Software that will help you to manager your KPIS

Balanced Scorecard Designer (BSC Designer) is a tool that supports building a Balanced Scorecard system for a company, department or for a sole person. This program helps to build a Balanced Score Card system and provide business alignment.

BSC Designer helps to measure and control business performance using Scorecard and KPI tools.

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