Marriott - White Lodging Services, United States

 

White Lodging Services Corporations is a corporate entity that manages Marriott’s limited service franchises comprising Courtyard, Fairfield Inn and Residence Inn. The company started to implement its Balanced Scorecard system both at the corporate and property levels in January 1997.

 

Some of the corporate strategic objectives were to:

  • Record a 15% annual compounded annual growth in revenues
  • $ 300 million in revenues by 2003
  • 20% increase in guest scores
  • Exceed brand average yield and Revenue per Room (RevPAR) levels
  • Achieve a Hourly employee turnover of less than 60% annually
  • Achieve a Management turnover of less than 20% annually
  • Deliver high return on investment: an unleveraged Cash on cost target of 15% (Denton and White, 2000)

 

In order to meet the new strategy and all the strategic objectives identified, the challenge put forward was the creation and implementation of a scorecard with the following characteristics:

  • The scorecard tracks both financial and non financial measures that are important for long time growth and value creation
  • It communicates owners’ objectives for growth, profitability and internal processes
  • It is simple to be monitored and easy for operating managers to be understand and accept
  • The scorecard needed to be implemented at all organizational levels and focus on only the Key performance indicators (KPIs) of each of the four original Balanced Scorecard perspectives. (Denton and White, 2000)

 

In order to secure an easy review process of the property performance and enable property managers to monitor their performance relative to goals a selection of the most significant KPIs for each perspective was performed. For each scorecard KPI a numeric point system and five color rating scheme with concrete targets was established

 

Point System for Balanced Scorecard indicators

Performance

Color ranking

Points

Superior

               Platinum

10

Above expectations

               Gold

7,5

At expectations

               Green

5

Below expectations

               Yellow

2,5

Unacceptable

                Red

0

Source: adapted after Denton and White, 2000

 

bsc_in_hospitality_industry_592

Source: adapted from Denton and White, 2000

 

Results Achieved

Two years from the Balanced Scorecard implementation, White Lodging Services has recorded performance improvement in several areas as follows:

  • Quantitative improvements both in revenue and profitability
  • Greater alignment of strategic objectives
  • Better understanding for the property managers of owners’ long term expectations (Denton and White, 2000)

 

References

  • Denton, A. & White, B. (2000), Implementing a balanced-scorecard approach to managing hotel operations, Cornell Hotel and Restaurant Administration Quarterly, Vol. 41, No. 1, pp. 94-107.

BSC in practice : Case studies

 

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