Case Study

Largest U.S. Independent Hotel Management Company Transforms Central Services, Improving Productivity 55% and Reducing Unit Cost 37%

55%

Productivity Improvement

Strategic Imperative

To become the low-cost, best-quality provider of central services while managing rapid expansion without adding personnel

Client Background

  • Recently acquired by a large real estate company, the business brought an excellent hotel franchising and management track record
  • Operating division managed a predominantly limited-service portfolio, with approximately 7% comprising full-service or resort properties
  • Central services supported finance, reporting, information processing, capacity planning, and back-office execution across the expanding portfolio
  • Rapid expansion increased pressure on central services to absorb greater workload while maintaining cost and quality performance
  • Leadership needed a scalable central-services model to preserve the company’s low-cost, best-quality market position
  • Overall productivity remained below 65%, despite multiple process changes and new technology applications

Key Issues & Barriers

  • Leadership lacked consensus on key performance expectations, weakening accountability across central services functions
  • Organizational structures and spans of control varied significantly, limiting ownership and consistent service execution
  • Capacity planning relied on ineffective, outdated methods that constrained resource deployment during rapid expansion
  • Central services lacked reliable quality and productivity measures, limiting visibility into cost and performance
  • Core processes contained excessive non-value-added steps and clerical work because digital and AI capabilities were underutilized
  • Financial and operational reporting was late and inaccurate, compounded by fragmented data sources and locally maintained noncore systems

Key Implementation Components

  • Mapped, redesigned, and implemented core central-services processes to eliminate waste, redundancy, and unnecessary processing steps
  • Established position-specific performance expectations and measurement capabilities across central services roles to strengthen accountability and service control
  • Designed and implemented formal capacity planning to align workload, staffing, and expanding service demand
  • Developed operator-specific expert models to maximize utilization of available digital and AI applications
  • Designed a new organizational structure with appropriate spans of control for implementation following management information system upgrades
  • Implemented a back-office restructuring plan to reduce processing steps and strengthen internal service through a department-to-department partnership compliance process

Benefits & Results

55%

Productivity Improvement

4:1

Return on Investment

37%

Unit Cost Reduction

26%

Service Capacity Increase

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