Working with Industry Oxford Brookes University & Rezidor Hotel Group (a decade of collaboration)

1. Employer-Engagement:What does it mean for HLST?“Working with Industry Research to Consultancy”(informing practice)Thursday 6th November, 2008St Anne’s College, OxfordPeter HarrisProfessor of Accounting & Financial Management

2. Working with Industry Oxford Brookes University&Rezidor Hotel Group (a decade of collaboration) Peter Harris & Knut Kleiven

3. The Company (at 31 Dec. 2007) • One of the fastest growing hotel groups • Based in Europe - Middle East - Africa (45 countries) • Corporate office: Brussels • Operating some 287 hotels = 50,000 rooms (approx.) • Results for year (approx.): Revenue €785m; GOP €291m; Profit after tax €46m

4. Consulting • Designed business analyst in-company project(1999) • Key development: Stockholm, company embraced “marginal accounting construct” (2001) • Designed company-wide cost analysis process(2001) • Designed programme for financial controllers & general managers (drivers at properties)Sweden (trialled analysis process) (2002) • Delivered seminars in-country at the regionsGermany, Belgium & Norway (2003)Poland, UK & Ireland (2004) France, Denmark & Iceland (2005)Austria, Switzerland & Italy (2006) • Embedded through the company’s virtual management school (2002-2006)

5. Consultancy (reflection) • Natural platform for co-operation and interaction between industry & education • Opportunity to reflect on strengths/contributions of the organisation and the university • Practitioners obtain new/novel applications • Faculty research endeavours tested/refined/adapted in rigours of ‘live’ commercial environment • Cutting-edge experience to bring back to teaching environment • Financial rewards to university, school & individual • Raises faculty profiles(companies tend to engage with individuals)

6. Contribution to research • European hotels performance project (a) company-wide questionnaire distribution (b) facilitated follow-up field interviews • PhD industry-wide CPA project (Vira Krakhmal) (a) part-funded full-time candidate(b)provided complete data collection access to build a constructive case study model (13-month period) • PhD pricing project (Jean-Pierre van der Rest) (a) funded complete data collection stage(b)arranged access to 33 hotels -18 cities -16 countries in Europe • MSc dissertations: generous fieldwork access e.g.(a) one student is currently interviewing corporate office executives in Brussels for “investment appraisal project” (b) plus another student granted access at two Radisson SAS hotels: Birmingham (for pilot) & London (part of main study)

7. Partnership beyondthe ordinary • Sponsored professorial inaugural lecture event – champagne reception & buffet for over 100 guests • Kurt Ritter, President & CEO attended and delivered keynote address for our major alumni event at Chelsea Football Ground • Contributed ‘forward’ for new accounting & finance book(& almost a chapter on corporate governance..!!!) • Sponsor annual Master’s book prize for top student • Joint authored “a decade of collaboration” article

8. The company has always said ‘yes’(carry’s responsibility!)

9. Research to Consultancy/Practice

10. Institute of Chartered Accountants in England and WalesTourism and Hospitality Group Annual Conference, November 2006Customer Profitability AnalysisResearch Findings Prof Peter Harris & Dr Vira Krakhmal

11. Purpose of the project Construct a model to assist hotel companies to improve customer mix decisions

12. Research Project Phase 1: PhD Research Project(2002 – 2006)

13. Model construction Development of a CPA Model(using activity-based costing) Case property is a 280-room, four-star, full-service international city-centre hotel

14. Customer characteristics by profit contribution Profit Loss

15. 20 % of the customers generate 250 % of the profits 80 % of the customers lose most of the extra 150 % of the profits 250% Cumulative Operating Profit 200% Unrealised Profit Potential 150% 100% Actual Profit 50% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Cumulative % of Customers Case hotel customer profit profile

16. Low Ideal situation; little or no subsidising Room for action; small number of very unprofitable customers Dependence Low risk situation; no extremes High risk situation; dependence on few customers; extensive subsidising High Low Subsidising effect High Customer-base portfolio analysis(strategic tool) Profit profile at the site Source. Storbacka, 2001

17. Phase 2: Dissemination to Industry (2006 – 2007) Joint Publication (BAHA, Oxford Brookes University & The Open University) “Recommended Practice Guide for Customer Profitability Analysis” (revised draft guide submitted September, 2007)

18. Phase 3: Informing practice(2008) Friday 25th April:Presentation of CPA research findings at corporate office, Brussels Monday 26th May:Meeting with corporate office team from Brusselsat Radisson SAS Portman Hotel, London to: “Explore the implementation of CPA in the Rezidor Hotel Group” Meeting resolved to develop a system and pilot in the newRadisson SAS EU Hotel, Brussels Consulting opportunities are already beginning to flow