How to improve your hotel's performance:

If you are looking for a way to improve the performance of your hotel then the Hotel Audit could be a good solution.

In this article we will guide you through the different stages of an audit and provide you with valuable tips on how to maximise the results of this process.

An audit is an in-depth analysis of your hotel's operations, processes and performance . Through this evaluation process, you will be able to identify areas where your hotel does not show any particular weaknesses and those where, on the contrary, improvements may be needed.

From efficiency of operations to customer service, from guest experience to marketing strategies, the hotel audit normally covers every relevant aspect of your hotel.

Through the audit, you can identify strengths and growth opportunities for your hotel, but also make ‘data-driven’ strategic decisions and significantly improve your hotel's performance.

Importance of the hotel audit

Hotel auditing plays a key role in the success of a hotel: we are talking about a highly competitive industry where it is essential to ensure that services always live up to customer expectations by providing an unforgettable experience. This is why a hotel audit is a crucial process: it provides a comprehensive overview of your hotel's performance and identifies possible areas for improvement.

Why is an audit process so important for a hotel ( but not exclusively)?

Normally it is meant as a process of assessing compliance with a certain standard: the auditor essentially verifies whether and to what extent the actual standard of services deviates from that adopted by the hotel management.

There are, however, different levels of audits that include, in addition to the analysis of services in direct contact with guest perceptions, the study of other aspects that are equally fundamental to the success of your hotel.

There are different types of hotel audits, each focusing on a specific aspect of hotel performance. Let us look at the three main types.
 

Financial audit

The financial audit consists of a detailed analysis involving specific indicators of your hotel in order to assess its true profitability. This type of audit closely examines cash flows, budgets, expenses and profits to identify any discrepancies or areas where financial management can be optimised. Usually the most common mistake is to assume that one's accountant performs this type of work, but unless your accountant specialises in hotels, budgeting has little to do with a financial audit.

Let's take a practical example.

The distribution fees you pay to online channels are normally - and rightly so - charged as an expense (usually indirect operating costs). So on the one hand we have the production value of sales and on the other hand the distribution cost.This remains a simple ‘numerical’ figure: we will only know to what extent sales commissions weigh on the company's balance sheet.

Nothing will the balance sheet tell us about the congruity of this value in relation to the average, to benchmarks of the specific destination or to the category of your hotel.

The second biggest limitation is time-related. Ordinary accounting, in fact, complying with legal obligations, will provide you with data for the entire year and you will not know (at best) until March of the following year.

Do you want to know if you are selling at the right price? Are you interested in correctly quantifying the distribution costs of your rooms? Knowing which channels are capturing the majority of your customer base while negatively affecting direct sales? At what average price do your competitors sell?

Financial statements and your accountant are unlikely to answer these questions.

So the output of a professionally performed financial audit can form the basis for your hotel's strategic decision-making processes.

Operational Audit

By its very nature, a hotel is exposed to a multitude of critical success factors: every single service is in direct contact with the perception of our guests, making it susceptible to evaluation .

The operational audit focuses precisely on the day-to-day operations of the hotel. This type of audit examines internal processes, personnel management, efficiency of operations and use of resources. Through an operational audit, you can identify inefficiencies and implement improvements to optimise hotel operations.

If you are interested in knowing how much more time your front desk staff could dedicate to customers simply by optimising daily work procedures, then an Operational Audit could be just the thing. If you think an outside look can help improve your hotel then don't hesitate!

Brand Reputation Audit

The Brand Reputation Audit is fundamental to understanding how guests perceive your hotel. This type of audit involves collecting feedback from guests through surveys, online reviews and other forms of communication. By carefully analysing this data, you can identify areas where you need to improve to increase guest satisfaction.

Today, specific tools are used that can analyse guests' perceptions of your hotel using also semantic analysis, which can statistically extract and classify several important concepts and compare them with your direct competitors.

Even if you are firmly convinced that you have particularly demanding guests, that you are really unlucky or, even worse, that you have decided to ignore the reviews of your hotel, know that reputation and sales prices are concepts that are difficult to separate.

If you are interested in learning more about this topic, I invite you to visit this page of Shijigroup where, with the support of data, the issue is effectively highlighted.

Distribution audit

We know that our rooms are sold through different channels: Direct, OTA, GDS and Agencies.

Each booking channel has its own peculiarities such as, for example, the ability to channel a particular customer segment or type of booking, but it also has its own distribution costs, which have a major impact on the hotel's operating results.

Considering that no channel is cost-free - indeed you would be surprised to discover how high the CPA (Cost per Acquisition) of the direct channel is - and that often the business practices of some operators are far from straightforward, then it will be easy to understand that having a full understanding of your hotel's distribution is a determining factor in the success of your business.

A distribution audit will assess whether your hotel uses the right mix of channels and how much they really affect distribution costs (which is not at all easy).

Tips for a successful hotel audit

Here are some tips for conducting a successful hotel audit:

1. Plan ahead: make sure you have a well-defined plan for the hotel audit. Determine the objectives, the areas you wish to assess and the resources required to conduct the audit effectively.
2. Involve your team: the hotel audit is a collaborative process. Involve your team and listen to their opinions and suggestions. This will help gain a complete picture of the hotel's performance.
3. Use analysis tools: take advantage of the available analysis tools to collect and analyse your hotel's performance data. Correct interpretation of the data will help you make data-driven decisions.
4. Evaluate regularly: hotel auditing should not be a one-off event, but an ongoing process. Measure your hotel's performance regularly and make the necessary changes to continuously improve (remember the famous Deming Cycle?).

Engaging a professional auditor vs. conducting the audit in-house

When it comes to conducting a hotel audit, you can choose to hire a professional or conduct the audit in-house. Both options have their advantages and disadvantages.

Obviously, hiring an external professional will entail additional costs for the company, but the auditing process will most likely be more accurate with more comparative data that can be used as performance indicators.

Conclusions

Hotel auditing is an essential tool for improving your hotel's performance. Through a thorough assessment of your hotel's operations, finances and brand health, you can identify areas for improvement and implement the necessary changes to optimise your hotel's overall performance.

Whether you choose to hire a professional auditor or conduct an internal audit, be sure to follow the advice provided in this article for successful results. Remember that hotel auditing is an ongoing process and that making constant improvements will guide your hotel on the road to success.

Don't underestimate the importance of hotel auditing and start planning yours today! Want to meet with one of our specialised auditors? Book a call now !