| ‘Flow-Through’ or to use a well-known business phrase: Turnover is vanity; profit is sanity, or if you’re a golfer: Drive for show and putt for dough. ? May was a good month (chart ↓), which confirms our belief that 2023 will be a good year. Despite the challenges, the M&E market is holding up well, which is good for everyone, even if your business didn’t have the easiest of months. Remember, our data is averaged out, so there will (always) be winners and losers. But we can all agree that a high tide floats all boats. This month, we attended a fascinating event delivered by HSMAI. The event was titled Total Revenue Management, delivered by the eminent Anders Johansson, who gave a masterclass on the broader topic of ‘Total’ Revenue Management. One of the subtopics of Anders’ presentation was about Flow-Through. Now, I’m not a Revenue Manager, although I swim with them daily, and from my learnings on the day, I learned that in the world of hospitality: beds, M&E, F&B etc., there is a tipping point where ‘more’ (volume) doesn’t always translate into more profit. In fact, more can sometimes significantly impact profit. And not in a good way. More can sometimes mean less profit. It was a sobering thought, especially when we all drive for more. The secret metric and clever calculation, called flow-through, involves deploying extra resources needed to deliver more. And those additional resources often come at a cost that can substantially impact profitability. But in the race for more, who’s measuring the flow-through of those costs and +/- profit? Are you measuring the total revenue and the total costs for each line, or are you simply intent (targeted) on throwing more in the top? When it comes to data and benchmarking, we often talk about courage: The courage to look at the detail. The courage to challenge the norm (using the data as evidence). The courage to shine a light in dark places. And to combat the race for more and specifically the short lead times challenge, do you know the point that you say ‘No’ to the client because you know it will hit your profit? That takes courage. Short lead times create stress. Stress on staff, stress on purchasing and possibly stress on profit. Our industry needs to find a way to change the habit of clients’ short lead times. It could be better for everyone, and a price may need to be paid by the client for short lead times to ensure the flow-through comes out positive. Flow-through. Does M&E use it to its full potential? It could be the nugget that can crack the short lead time challenge. I wish all those taking part in The Meetings Show a successful and productive few days. I’ll be there and look forward to meeting many of you. Events, they’re great aren’t they?! |
| Monthly M&E Market Analysis Virtual Friday 30th June 12.00 – 12.45 Data | Trends | Q&A |  |
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