Hotel KPIs: how to turn budget targets into team results

Most hotels have no shortage of hotel KPIs. The brand sends guest satisfaction targets, the owner sends a budget, and the property management system produces occupancy and revenue figures every morning. The harder question is what happens next: how do those numbers travel from the general manager's office to the people at the front desk, in the breakfast room and in housekeeping, who are the ones who can actually change them?

Jalil Steel, General Manager of a 254-room hotel on the edge of Amsterdam, answers that from fourteen years in hospitality, from a telephone switchboard in Panama to the front office of a cruise ship. In his view, a target only works when the team understands it, believes in it and can act on it today. Since he arrived, his property went from a guest experience score of around 73 or 74 to above 80, while occupancy has run at around 95 percent and, in his account, has not dropped below 90.

Why hotel KPIs fail when they stay in the office

A budget arrives as a set of numbers: targets for overall guest experience and loyalty recognition from the brand, and a financial plan for the general manager. Steel's point is that this document is not meant for the GM alone. The GM's job is to digest it and translate it into something each department can work with.

“The budget is for the GM to digest it, filter it, communicate it with the team, and make sure we achieve it as a team.”

Jalil Steel, 50:51

He describes two languages. With his operations manager he talks numbers, back and forth, until both understand exactly what the plan requires. With the front desk, breakfast, food and beverage and housekeeping teams he uses a different language: what we are going to do, how, and why. A GM who only passes on the big number, he says, gets one reply from the team: how? Answering that question is the GM's work, not the team's. A related article looks at the data behind hotel business intelligence.

From annual budget to daily targets

Steel tries to stay several steps ahead of the calendar. In the middle of December he sat down with his operations manager and broke down the entire first quarter: room revenue, what was needed to shift it, and breakfast in detail. Only after that did they look at the targets and change the strategy. A related article looks at hotel forecasting for independent hotels.

His approach for turning hotel KPIs into daily work follows a fixed sequence:

• Break the budget down per quarter and per revenue line, together with the operations manager, before the period starts.
• Use the forecast in the property management system to see what is realistically achievable.
• Translate each goal into a daily target that is visible on a board in the back office.
• Make the right moment to act visible for the person who serves the guest.
• Explain the why to every department, and share the big number only once it is reached.

Making a single target sellable at the front desk

The clearest example is a green stay programme: guests who skip room cleaning receive a free drink, or loyalty points if they are members. When Steel arrived, the hotel was selling almost none of it. He describes going from around €500 in savings to more than €20,000 per month on average.

The result did not come from asking the team to sell more. The forecast showed how many reservations were eligible per day. That number went on the board as a daily target. Every eligible reservation received an alert in the system, so the agent knew at check-in that this guest qualified. And the team got a script: once the payment is done, ask whether the guest knows the programme. The answer is usually no, which opens a short explanation about a greener stay and a drink in return.

The effect reached further than one line in the budget. Housekeeping costs went down, and guests who came for their free drink sat down at the bar, often ordering more. Staff kept an eye on empty glasses and offered a second round. He says bar revenue rose from about €300 to more than €3,000, in a hotel with a fairly simple concept. One well-designed target moved three numbers.

Talk about the red numbers

Many leaders, Steel observes, prefer to share good news. He shares both. When a target is missed, the conversation is not about blame but about the gap and how to close it. If the team missed ten green stays yesterday, the question becomes how to make ten more today, or how to spread them over the coming days and still reach the target.

“A lot of people, they don't like to talk about the red numbers. You have to talk about the red numbers.”

Jalil Steel, 53:13

The same logic applies upward. Going over budget on a cost line can be fine, he explains, as long as the GM can show the return at the end of the month when the P&L arrives. If breakfast and other targets are above plan, the extra spend is explained. If everything is in red, the conversation with the director of operations becomes a long one. Knowing which hotel KPIs justify a cost is part of the job. A related article looks at hotel profitability from loss to profit.

Belief and presence drive the numbers

Steel's first step at a difficult property was to change what he calls the limiting beliefs in the team. He asked people to name three things that were good about the hotel, pointed to renovated rooms, a large lobby and a strong team, and then linked that pride to concrete targets.

“I am nothing without you all. I can talk beautiful, but if you don't believe we can do it, there won't be any result.”

Jalil Steel, 20:32

Presence supports that belief. Over the holidays the breakfast room, with 134 seats, served between 400 and almost 500 guests a day, and Steel was there each morning. He makes a point of being visible at the busy moments, while still doing the administration the role requires. He also invites the team to ask why: why sell this, why change that.

Finally, he values consistency over one good month. He posts his results publicly, and tells colleagues that if they share a great month, they should be able to share another within two months. Otherwise it was luck, not management. For anyone working with hotel KPIs, that is a useful test: can the result be repeated? You can watch the full conversation for his whole career story, from a cruise ship front desk to general manager.

Frequently asked questions

Which hotel KPIs does a general manager track?

In Jalil Steel's experience a general manager works with two sets of numbers. The brand sets guest targets, such as overall experience and loyalty recognition scores. The financial budget covers room revenue, breakfast, bar and food revenue, purchasing and gross operating profit. Occupancy and daily programme targets, such as green stay sales, sit underneath and show whether the plan is on track.

How do you get hotel staff to care about targets?

By explaining why before asking what. Steel breaks the budget into daily targets the team can reach, shows them on a board, makes the moment to act visible in the system and gives a simple script. He shares the big number only once it is achieved, and he invites the team to ask why at any time.

Is it acceptable for a hotel to go over budget?

In his view it can be fine to go above budget on a cost line, as long as the general manager can explain the return when the monthly P&L arrives. If breakfast or other revenue targets are above plan, the extra cost is justified. If every number is in red, the conversation with the director of operations becomes a long one.

How do you discuss missed targets without demotivating the team?

Name the target, the shortfall and a way to recover, without blame. Steel's example: if ten sales were missed yesterday, ask how to make ten more today, or spread them over the coming days. He says leaders must talk about red numbers, but in a tone that keeps people on board instead of making them defensive.