Hotels, Performance, and the Balanced Scorecard: Past Trends and Future Directions

The hotel industry appears to be enjoying a renaissance with the 2010 hotelsmag.com’s top 325 hotel groups reporting “a glut of hotel openings across companies, brands, markets and segments”. This additional room inventory was added into a global marketplace that was largely unable to absorb these new units. During these exciting but challenging times enhancing hotel performance measurement remains a key managerial activity.

In the management literature Johnson and Kaplan (1987) note the need for better performance measurement systems. Since then, several authors postulate measurement models that provide a more integrated approach linking operations to corporate strategy. These include: performance pyramids and hierarchies (Dixon, Nanni, & Vollmann, 1990), intangible asset scoreboard (Sveiby, 1997), SMART (Cross and Lynch, 1988), performance prism (Neely, Adams, & Kennerley, 2002), success dimensions (Shenhar & Dvir, 1996) and balanced scorecard (Kaplan & Norton, 1992).

All of these performance measurement models highlight the importance of implementing an early warning detection system indicating what has happened; diagnose reason for the current situation and indicate what intervention action should be taken.