PMI is designed to provide a complete overview of labor hours across all departments, helping you effectively manage and benchmark your hotel’s productivity performance. When a department like housekeeping is outsourced, it may seem unnecessary to include those hours in the system. However, maintaining this data is crucial for accurate productivity analysis and decision-making. 

Why include outsourced labor hours in PMI? 

1. Accurate benchmarking of RevPOLU: To effectively measure your property’s productivity (RevPOLU), all hours worked, including those from outsourced departments, need to be included in this calculation. This ensures your RevPOLU is accurate and allows you to benchmark your hotel’s performance against others, both within and outside your chain, without discrepancies. 
2. Changing outsourced strategies: Hotels sometimes switch between outsourcing and managing departments in-house. If you bring an outsourced department back in-house, having consistently included those hours from the beginning ensures your RevPOLU calculations and year-on-year comparisons remain accurate. Omitting these hours can result in poor data quality, leading to sub-par comparisons during and after the transition period. 
3. P&L Planning cost calculation: Including outsourced hours in PMI is essential for accurate cost calculations in the PMI Planning (P&L) module. All hour data feeds directly into your P&L, ensuring your financial accounting is thorough. If you’re not currently using P&L Planning but may implement it in the future, having accurate historical data in PMI will ensure a smooth transition. 

Best practice: Include all relevant hours 

To ensure your RevPOLU calculation is accurate, all hours responsible for generating revenue at your property should be included in the cockpit. This includes any outsourced or extra hours. If these hours are omitted, your RevPOLU might appear better than it is, leading to misleading performance assessments. 

Practical tips for keeping outsourced hours updated and accurate

Here are some practical guidelines for managing outsourced departments within PMI: 

• • Automatic updates: PMI automatically populates the outsourced cockpit’s past and future hours by dividing the cost driver by the productivity target set.  The team does not need to make any manual entries into their timekeeping system for this cockpit.

• • Consistent productivity targets: Ensure that the productivity target for outsourced departments (e.g., 2.3 rooms per hour) is consistent across last year, budget, and forecast to maintain accurate data. 

• • Optimize RevPOLU and PMI Index: Set the horizon to zero days to display only SMART hours for future planning, which helps improve hours performance and prevent PMI Index deductions. 

• • Separate cockpits for mixed staffing: If you have both in-house and outsourced staff, create separate cockpits for each group to ensure data accuracy. 

• • Policy consistency: Only management should decide to exclude outsourced (or other) hours from RevPOLU calculations on the rare occasions that it makes sense. While this decision can be adjusted later, maintaining consistency is key for accurate performance comparisons. 

When to exclude hours (outsourced or in-house) from the RevPOLU calculation

While it’s generally best to include all hours worked at the property in PMI, there are exceptions where hours logged in a cockpit should be excluded from RevPOLU calculations. These exceptions include: 

• • Shared Resources: When administrative services are shared across multiple properties (e.g., a GM, controller, and sales team managing several hotels), their hours should be logged at the primary hotel but excluded from RevPOLU since they serve multiple properties. 

• • Unrelated parties: This scenario is not a regular occurrence, but examples could be where income or hours are recorded for parties not related to normal hotel operations.  For instance: rental income from subletting space to an external vendor or tracking hours in PMI for work done by an external client. 

The decision to exclude data from the RevPOLU calculation should be an exception and made only by the chain executives. 

Conclusion 

Incorporating outsourced labor hours into PMI is essential for comprehensive productivity performance analysis, accurate benchmarking, and informed decision-making. By leveraging PMI’s automated features, you can maintain a complete and accurate view of labor efficiency across all departments, whether managed in-house or outsourced.