Protecting bottom line in trying times in the hotel industry

The Management Club (TMC) hosted its monthly discussion at Galadari Hotel on 17 October. The session was conducted by Nirmalan Nagendra, a retired veteran hotelier who now works as an external consultant for KPMG Sri Lanka. The workshop attracted general managers, ex-com members, and senior managers of the hotel trade and other interested individuals. 

Nirmalan covered the following topics which were well-received by the audience and even kept them engaged post the session: 

• Reforecasting during difficult times and monthly forecast for the ensuing months. The duty of a finance manager or an accountant isn’t only to focus on accounting and books, but to also engage with your staff – this may help you uncover a lot of information than you could imagine! 
• Complying with management agreement and obligating to the owner’s expectation. 
• Keeping your KPIs in line with industry standards, rooms, F&B and other areas.
• The importance of taking care of your staff who are the greatest asset of the trade. Satisfied staff means satisfied guests, and this will grow your topline. As the old saying goes: ‘Take care of your staff and they will take care of your business. And this will automatically grow your profits’.
• Revenue management from outlets and front office. 
• Cost control by looking at all cost periodically to give value to the guests. This is done at the end of every month, but to be a truly efficient accountant, this must be done regularly. Identify and understand certain cost patterns and work together with your team to find solutions.
• Adhering to Government regulations on the industry and this will help your business boom. 

• Avoiding the profit and loss window dressing which otherwise will hit you at your year-end. 

• Understanding your sales and marketing cost. Never underestimate this cost as this is the final window to attract customers. 
• Maintenance in line with industry standards.
• Risk management and adequate insurance cover.
• Adequate monthly provisions which is a must in order that comparisons can be done year on year
  
   

In addition to the topic of finance, Nirmalan also covered other management areas including: 

• Basic email etiquette for every day practice including how finance managers must email their colleagues well in advance without waiting for the month-end.
• The power of being a people person and recognising the talent and job well done in your colleagues and subordinates as this boost of positivity will motivate them to perform better the next time. 
• How one must hire multi-skilled and diverse workforce without hiring for a set of individual skills. He went on to explain that people who have a diverse set of skills can reduce the team size but take on more work and this is more flexible than having individual teams for each task; this will help reduce certain operational costs as a benefit. 
• The importance of integrity. He is a strong believer that punctuality is one of the best forms of dressing up, and if one is running late then he/she must always keep the host informed. 
• Hotel owners having to work together to build the industry instead of offering room rates at lesser prices to be ‘competitive’ since this is only harming your cashflow and subsequently putting Sri Lanka solely on the map for ‘cheap’ and ‘affordable’ holiday destinations without even distribution across different diaspora. 

Nirmalan is currently a consultant with KPMG Sri Lanka’s Hotel Advisory Practice, who has over 35 years of expertise in the hospitality industry, including 25 years as Senior Director Finance in five-star hotel chains in the USA, Caribbean, Middle East and Singapore. He was also Deputy General Manager in the Bahamas and Kuwait overlooking Rooms, Human Resources and Training, for Le Meridien.