Statistics can distract and deceive

Let me start with a story both tragic and meaningful. On the evening of June 1, 2009, Air France Flight 447 departed Rio de Janeiro to Paris. The flight started off normally. Then, somewhere over the Atlantic Ocean came trouble. At the controls, the flight crew diligently monitored their instruments as the aircraft tumbled through the darkness into the water. Some 228 passengers and crew died tragically.

It took some two years until the flight wreckage was discovered. To summarize what happened, the black box recorders specified the instruments were not displaying the aircraft’s real situation, which led the crew to react incorrectly.

Could this tragedy have been avoided? Was pilot error to blame? While instrumentation error was identified, could an expert pilot have flown the craft contrary to what his dashboard was indicating based on experience and trained sensory recognition?

I am not a pilot, and apart from spending about 50 days a year on and off airplanes, cannot begin to imagine the consequences of the actions from such exceptionally skilled individuals. However, I draw some incredible parallels from this unfortunate incident to the way many hotels are currently being operated.

No, I do not expect the failures of property management will result in death or even guest injury. But I do believe many managers today spend too much time analyzing the minutia of data spewing forth from their computers and not enough time looking at the big picture.

Certainly STR reports are a valuable component of our business tools. The data presented by these programs provides a daily snapshot of performance in comparison to the competitive property set. I have sat in numerous meetings where we have poured over the daily data and scrutinized every detail.

Repeatedly, I ask hoteliers a simple question, “How’s business?” Typically, I get a response like, “We’re down $x.xx in ADR versus budget, but occupancy is holding steady at xx.x%,” or, “RevPAR is solid, and we’re $x.xx ahead of comp set.”

In all, these types of responses are an excellent one-stop measure of how the senior manager believes his or her business is operating. Unfortunately, they reflect only a narrow focus on short-term financial data.

I encourage GMs to look at more than the financial picture. Your own dashboard has to include guest satisfaction, employee morale, group-sales success ratios, quality scores/rankings, etc. True, finances are important. But if your dashboard is merely the P&L, you could be heading towards some serious consequences.

The next time you’re asked the question, “How’s business?” say something like, “I am pleased to report that the long-term success of Property X is excellent. Our guests have never been happier, our employee morale is exceptional, our close rate on sales presentations has never been higher and, as a result, the property is enjoying financial results commensurate with this improved marketplace position.” Now that’s a business statement I can be confident in.