What do NOI, logic and business planning have in common?

It’s that time of year again when we face the seemingly never-ending process of business planning and budgeting. Joyful bliss, right?

Seems this process always results in a monumental tug of war between all involved constituencies. And as I look back over the countless years I have been an active participant in this struggle, I began to wonder if there was any logic in this process. What is logical about the process? What is logical about the outcome of the process? Does it really have to be so difficult?

In Googling “logic,” I found the origin of the word began with the studies of Aristotle. Aristotle’s logical works contain the earliest formal study of logic that we have. It is therefore all the more remarkable that together they comprise a highly developed logical theory, one that was able to command immense respect for many centuries. The core of this definition is the notion of “resulting of necessity.”

So, what is it about our business planning and budgeting that is “resulting of necessity”? The necessity in this case relates to the goals we are attempting to establish as the first step of the business planning process. What is it that we must accomplish?

Here is the question we must answer:

Do you really know what the goal for your hotel needs to be in 2013 for the owner to accomplish his goal?

Look yourself in the mirror and answer that question with acute clarity.

It’s CASH … NOI … ROI. Right? Not RevPAR, house profit, blah, blah, blah.

What do you think? I would love to hear from you.