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- Capacity planning relied on ineffective, outdated methods that constrained resource deployment during rapid expansion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