Lisa and I have been talking numbers. It’s not her strength, she loves the people more and she knows she’s got to focus on learning to love the numbers, number-crunching and hitting targets, and driving high performance. In 2024 the team has some big targets to hit.
“But, how do we make the non-tangible elements around team and getting our leaders leading, how do we drive productivity and make it measurable?” she asked.
“I can understand the room nights, average rates, butts on seats etc, but how do we start to drive accountability and measure performance in other ways across the business?”
In the ever-evolving landscape of tourism, travel, and hospitality, business leaders must possess a comprehensive understanding of their company’s data across all facets of the operation.
The phrase “Know Your Numbers” encapsulates the essence of this critical aspect for executives, senior leadership, and business owners in the industry.
From financial metrics to the subtler indicators of employee well-being, engagement and productivity, being well-versed in key performance metrics is essential for steering businesses toward success and short, medium and long-term sustainability.
THE CRUCIAL METRICS FOR BUSINESS LEADERS
- Revenue and Profit Margins: Understanding revenue streams and profit margins is fundamental. For instance, in a hotel, revenue per available room (RevPAR) and gross operating profit per available room (GOPPAR) are vital.
- Costs and Expenses: Tracking expenses like labor costs, operating costs, and acquisition costs helps in budgeting and optimising resources.
- Customer Acquisition Costs (CAC) and Lifetime Value (LTV): These metrics offer insights into the efficiency of marketing and customer retention strategies.
- Occupancy Rates and Capacity Utilisation: In the tourism sector, this could be rooms booked, plane seats filled, or tables occupied. Understanding utilisation helps in efficient resource allocation.
- Customer Satisfaction and Feedback Scores: Net Promoter Score (NPS), customer reviews, and satisfaction ratings provide valuable insights into service quality.
- Inventory Turnover: For businesses with perishable inventory like restaurants or tour agencies, measuring the rate of inventory turnover is crucial.
HUMAN CAPITAL METRICS
- Employee Turnover and Retention Rates: High turnover rates can be costly and disrupt operations, affecting the quality of service and customer satisfaction.
- Employee Satisfaction and Engagement: Metrics like employee engagement scores or surveys can provide a glimpse into the overall organisational health.
- Training and Development ROI: Measuring the impact of training programs on employee performance and productivity is essential.
- Employee Well-being: Tracking absenteeism, stress-related leave, or mental health support program utilisation helps gauge the workforce’s overall well-being.
- Workplace Culture and Diversity: Assessing inclusivity, diversity metrics, and workplace culture enhances employee satisfaction and performance.
- Community Impact and Sustainable Practices: For tourism, environmental impact metrics and contributions to local communities showcase a company’s commitment to responsible tourism.
THE SIGNIFICANCE OF KNOWING THE NUMBERS
Business leaders in tourism, travel, and hospitality need to delve beyond traditional financial metrics. While profitability is crucial, focusing solely on financials neglects critical aspects such as employee satisfaction, customer experience, and community impact, all of which play pivotal roles in the success and longevity of a business.
Understanding these numbers helps leaders make informed decisions, identify areas for improvement, and allocate resources effectively. For instance, a hotel noticing a decline in online review ratings might need to reassess their service quality, training programs, or employee satisfaction to enhance guest experiences.
Moreover, in an industry greatly affected by external factors like natural disasters, global pandemics, or geopolitical changes, a comprehensive understanding of numbers allows leaders to adapt quickly and make agile, data-driven decisions.
“Knowing Your Numbers” is more than just a financial adage; it’s a guiding principle for successful leadership in the tourism, travel, and hospitality industry. By grasping both tangible and intangible metrics, leaders empower their organisations to thrive in a dynamic and competitive landscape while fostering a culture of growth, sustainability, and excellence.
P.S Whenever you’re ready… here are 4 ways I can help you develop your tourism business leadership capabilities and achieve consistent business growth:
- Grab a free copy of our E-Book – How to Attract, Train and Retain Your Tourism Talent
It’s the core principle for success in attracting new tourism talent, training new and existing staff, and then retention strategies to ensure you keep the keepers — Click Here
- Join the Tourism Business Leader’s Facebook group and connect with like-minded leaders focused on building highly effective teams
It’s our Facebook community where smart leaders get to learn more about creativity, leadership, and performance for tourism business success. — Click Here
- Create Your Tourism Pro-Team and Drive Consistent Growth
Helping tourism business leaders develop their skills to improve engagement, accountability, and performance of the team and business. If you’d like to work with me so you can stop being reactive, have the difficult conversations, and drive performance to get the results you want and know the business needs and can achieve then… message PRO to me here and I’ll get you all the details.
- Let’s get the Whole Team Together
Would you like a different perspective and someone else at the front of the room or on Zoom/teams to lead regular and consistent team building, accountability, and engaging learning experiences, that drive results and outcomes for individuals, teams, and the business? If you feel a little challenged with everything going on, maybe sounding like a cracked record saying things repeatedly, or actually not 100% sure how to motivate and drive the team, given the current nature of business, it may be useful for us to chat. Message TEAM to me here… and tell me a little about the business, your team, and what you’d like to work on together.