Performance Measures Based On Long-term Value Creation: Hotel Profits Must Be Achieved Through Customer-centric Management

The aim of this thesis is to show that measuring the performance of a hotel by looking at its profit is not enough. Profit should not be the primary purpose of a hotel, a standalone objective to be achieved. Indeed, guests are the key factor for a hotel to be successful; guests are what allow the hotel to make money. As Peter Burker teaches:" Business exists to supply goods and services to customers, rather than to supply jobs to workers and managers, or even dividends to stockholders."A hotel can exist, operate and be a sustainable business for owners and investors only to the extent that it is profitable. To be profitable, however, it needs guests. Going through the traditional techniques for measuring the financial performance, this study is going to show that these are not enough for a holistic evaluation of how well a hotel is performing and how well it is being run. Given their vital role in influencing the hotel financial results, in fact, customers and employees-related measurement of performance must be implemented. A continuous monitor by managers of these qualitative dimensions is required in conjunction with an overall management system which is totally customer-oriented.Hoteliers’ fundamental goal, in fact, is to engage customers in becoming loyal and even advocate guests, for receiving from them frequent visits and positive word-of-mouth.The following analysis is going to show an overview on what really matters in the daily measurement of the performance of a hotel:the importance of both financial and nonfinancial indicators for ensuring a long term creation of value.