New hotel projects suffer from frequent delays due to poor – or no – project management. The consequences hurt hotel owners and operators alike. This blog addresses some of the key concepts of project management and defines what hotel opening management is about.
Let’s start with the definitions of a project and project management. A project is “a temporary endeavor, undertaken to create a unique product, service or result. The temporary nature of projects indicates that a project has a definite beginning and end.” Of course, temporary does not necessarily mean that the duration of a project is short, as quite a few new hotel openings demonstrate.
What is project management?
Project management is defined as “the application of knowledge, skills, tools and techniques to project activities to meet project requirements.” If applied correctly, this leads to on-time and on-budget delivery of projects. The generalized guidance required to manage a project effectively and efficiently has been codified in Project Management Bodies of Knowledge (PMBOK, APMBOK) as knowledge areas. These cover areas such as integration, scope, time, cost, quality, human resources, communications, risk, procurement and stakeholder management.
As an example, here is the definition of one of the above knowledge areas: “Project risk management includes the processes of risk management planning, identification, analysis, response planning, response implementation and monitoring risk on a project. The objectives of project risk management are to decrease the probability and/or impact of negative risks, in order to optimize the chances of project success.”
This implies that applying risk management by thinking through and formally describing in detail all the scenarios of what could possibly go wrong during the hotel opening process, then defining how each scenario would be dealt with if it happens, would increase the chances of project success.
Application of risk management tools and methods also would improve the accuracy of forecasting revenues and cash flow, which would allow the senior leadership team to find alternatives for delayed projects and still meet the quarterly and annual growth goals.
Contrary to the popular belief that the levels of uncertainty and complexity are unmanageable and “unknowable,” in our experience, there is little uncertainly and very few unknown-unknowns in new hotel projects.
The knowledge areas apply to most projects, most of the time, and in most industries, but do not address the hospitality-specific aspects related to managing the various phases of a new hotel project.
What ‘hotel opening management’ really is
“Hotel Opening Management” is an industry-specific knowledge area providing guidance to hospitality executives tasked with managing a new hotel project. It could be defined as follows: “Hotel opening management includes the processes to define, coordinate and integrate all relevant hospitality-specific processes, sub-processes and activities, as well as the interdependencies in each phase and across the various phases of the new hotel project life cycle.” The objective of hotel opening management is to bring about “on time, on brand, on budget, on customer openings.”
Obviously, this is not about ordering teaspoons, but how the individual knowledge areas and their interdependencies are used optimally to simultaneously achieve technical, operational and commercial readiness of a new hotel project.
Similarly to how the Uniform System of Accounts for the Lodging Industry establishes standardized formats and account classifications to “guide individuals in the preparation and presentation of financial statements for lodging operations”, a hotel-opening centric knowledge area would codify (relevant) standardized processes, sub-processes and activities to guide individuals in the planning and opening of new hotel projects.
At present, such knowledge resides with individual hotel companies and industry professionals, but has not been codified as an industrywide standard. In view of the global hotel development pipeline, which is tremendous globally and regionally, it would make sense to do so. After all, an opening is an opening is an opening, and the phases in each new hotel opening project are virtually identical, which allows for processes, plans and schedules, and budgets to be standardized. More about this in one of my next blogs.