Profit improvement: Streamlining process flow

Beyond competitive supply and area demand, numerous factors directly affect a hospitality facility's cash flow. Marketing, product positioning, customer service levels and cost management are just a few of the many process-oriented factors that contribute to the profitability of a hospitality property.

PwC's Hospitality & Leisure professionals offer extensive operational, analytical and advisory experience for lodging investors, lenders, owners and management companies. This in-depth experience enables us to provide our clients with the unparalleled advice and support needed to enhance processes for cash-flow improvement, from single hotels to entire portfolios of lodging establishments.

If this is your situation

• Your organization has grown through multiple acquisitions, and now it is time to implement changes that will make these acquisitions accretive to earnings.
• As an owner, heightened standards in brand compliance are putting pressure on your return-on-investment hurdles.
• As a branded hotel company, you need to move deal flow through your internal process more efficiently.

How PwC can help you

Hospitality and leisure organizations deal with daily processes ranging from basic operational procedures such as registering a hotel guest or cleaning a guestroom to complex financial processes that budget and monitor revenues and expenses. Our specialists work with lenders, the brands, owners and management to assess both specific problems (such as a poorly performing department within a property) and more general issues (such as property-, portfolio- or brand-wide customer service issues or procedural inefficiencies). Some areas that hospitality and leisure organizations often overlook are:

• Analysis of real estate tax assessments during periods of revenue growth deceleration or decline
• Technology enhancements that can reduce labor and/or increase revenue levels
• More prudent business structures

Through management interviews, data gathering and analysis, process observations and best-practice comparison, our teams work with clients to identify and prioritize areas in which process-related changes will result in reduced expenses or enhanced revenue, offering significant improvements to cash flow. The process inefficiencies that make it difficult for employees to complete assigned tasks as directed are often related to inherent, systemic problems rather than the incompetence of the employee or management. Typically, process adjustments also cause an indirect improvement to property operations by addressing customer- and employee-retention issues and other customer-centric topics that affect a property’s ability to compete within a market.

Examples of engagements our hospitality and leisure professionals have performed include:

• Hotels 
  We were engaged to assist a client with a property on a college campus, specifically, assessing the effectiveness of the property’s dual-entity management structure and its impact on the property’s financial performance. We identified duplicative cost centers arising from this unique management structure and recommended a revised, single-reporting structure on a going-forward basis.

• Casinos 
  We advised the owners of a multi-property casino company in Northern Nevada who were faced with the prospect of reorganization. We completed a comprehensive operating assessment on each major department within the casino/hotel properties, suggested areas for improvement and increased efficiencies, studied day-to-day cash needs to redirect cash flow to pay down debt, prepared an independent market assessment along with a competitive analysis to determine the most lucrative target market for the properties, proposed a market positioning strategy on which a detailed marketing plan would be based and assisted the owners in all phases of negotiation with their key lenders.

• Conference centers 
  The institutional owner of an IACC-certified executive conference center engaged PwC to assess management’s operational and financial performance. We provided the client with a detailed analysis of comparable facilities, an assessment of the property’s marketing plan and market positioning, and a complete operations and financial diagnostic of the property. Our team identified significant cost savings and revenue enhancements for the facility and provided assistance to the owner in determining the management structure that best met the company’s needs and objectives of the property for the future.

Whether you need inefficiencies identified and business processes streamlined or need to take advantage of our in-depth sector and market knowledge for more complex business analyses, PwC hospitality and leisure specialists are committed to helping you improve your company's bottom line.