Automation, Data Intelligence and Hospitality Tech with Pavla Munzarova of Mews
Pavla Munzarova is the CFO of Mews, a leading cloud-based PMS (property management system) for hotels and hostels, headquartered in Amsterdam with 11 global entities. Pavla started her career in management and business analytics before stumbling into the finance world, where she’s been for the past 8 years. We sat down to get Pavla’s thoughts on SaaS in the hospitality industry, the current challenges the industry is facing, and why automation is more essential than ever.
You spent 9 years working for big hotel chains and large international companies, and then moved to Mews, a SaaS startup focused on the hospitality industry. Can you tell us more about Mews and the industry you operate in?
Mews is a SaaS tool for hotels and hostels to ease their operations and help teams make time for what matters most in hospitality: to provide great service to the guests. We provide a solution for businesses to plug in their favorite apps and manage their PMS from any device, any time. The goal is to help our customers focus on the guests and create real interactions with them for more than handing in keys, but also advising them for example. We’re currently mostly based in Prague, London and Amsterdam, but we opened offices in New York a few months ago, operate in 7 other locations and have clients in over 60 countries around the world.
What I can say from my previous experience in hotels, is that the biggest challenge is introducing tech to the industry. It’s difficult because, on one hand, the sector has been thriving - the COVID crisis hit it but we expect it to get up running once the situation stabilizes - for years, and growing at a fast pace. In that sense there’s an opportunity to automate certain processes like checking in and out, invoicing to guests, and so on, yet, systems live in the past. Many hotels, hostels, and international chains, run their business with in house software that slow operations and have trouble adapting to new tools. Overall convincing industry players about the efficiency cost of not automating is one of the main obstacles startups like Mews face, but we are getting there.
How is leading finance for a startup different than at larger companies?
Mews is the only startup I’ve worked at, and at first, I simply saw it as working at a small company. I started alone as Finance Manager, and it didn’t take me long to realize I was building processes that needed to be scalable because we were growing rapidly. My long term planning and risk-management mindset were helpful, because at a startup you’re always asking yourself “what will this process look like in a year if we double or triple?”, so I had that long-term vision in mind. As a matter of fact, most of the processes set up in the past still stand. In the first two years, I focused mainly on strategy, setting up processes, and then focused on building my team.
My long term planning and risk-management mindset were helpful, because at a startup you’re always asking yourself “what will this process look like in a year if we double or triple?”
Recently, it’s been all about expanding and growing, and here again, the business ops side has helped me align with the CEO on the strategy. To gain market share you want to question the best and safest way to do so, and that strategy led us to our first acquisition last year.
Mews Prague Financial Controlling Team
You acquired Planet Winners in December, 2019. This was your first acquisition project as a finance leader, how did you navigate?
The acquisition idea initially came from our founder, Richard Valtr, as we were thinking about a fast expansion strategy. To us, the decision came down to finding the best companies / products that shared a similar DNA to Mews, in terms of operating markets (thinking where we wanted to expand), customer base, product design and values.
The process lasted over a year, and we hired an M&A team to avoid unpleasant surprises. We especially wanted to ensure a smooth accounting migration. And of course, due diligence plausibly represents a big chunk of the work too.
From this experience I learned that the key to a successful acquisition is finding a partner that will sync with you, keeping a healthy relationship and planning to the smallest detail. This was a rather small acquisition compared to others in history, but what made it work is that we had a very good relationship with Planet Winner’s owners before the process.
What KPIs and metrics are specific to the hospitality industry?
In comparison to tech startup finance, the hospitality world is focused on cost-effectiveness. In general startup finance teams tend to focus on revenue and growth but efficiency isn’t as important from the start.
The playbook or P&L in the hospitality industry is quite clear: it’s all about occupancy and average daily rates, in other words, yield and revenue management. On the cost side, hotels typically focus on direct expenses - commissions to OTAs, maintenance cost per room, etc.
Now, since Mews is a SaaS solution, our KPIs remain pretty similar to those of a classic tech startup. Our team focuses on monthly recurring revenue, average contract value, customer and revenue acquisition cost, gross margins. One of our main revenue streams is payment processing which brings many additional indicators, but goes back to hospitality metrics too - payment volumes (and seasonality analysis), share of a wallet, interchange fees, chargeback ratios, average daily rates and hotel’s occupancy rates.
In fact, we partially depend on the hospitality sector’s performance, which depends itself on seasonality among other criteria, and now, depends on the pandemic, we’re going through.
That’s certainly an important topic to discuss, considering the hospitality has been hard hit during the covid crisis. How have you weathered the storm at Mews?
Our business model is based on two revenue streams, flat fees per month (considering a fee per customer per month) and payment commission. Thanks to our SaaS model we’ve managed to get by, otherwise it would’ve been a total loss since occupancy dropped and didn’t move for a while as COVID hit.
So, we looked at the situation analytically, consolidated a P&L and just like many others, strategized around different scenarios. Before COVID we were hiring and expanding exponentially, we slowed it down and scaled back on some of our local offices. We also thought about what we could make out of this crisis and started working on efficiencies and automation of internal processes. Now we’re better prepared for a second wave, we’ll certainly be more stable thanks to the centralization we’ve done.
What new trends do you see emerging in your industry, or any that have come out of the crisis?
Automation and tech are definitely going to be more present in the industry in the coming years, it’s already anchored in my world but it will grow in general. I love that online check-in and check-out are a thing, and I think it will probably extend to other activities and interest other stakeholders, the guests.
From the business side, more and more hotels understand the benefits of automation, but I think there will be more demand from the guest side too. At a time where the only thing you can touch is your phone, it’s practical to avoid queues and any unnecessary contact.
Any advice you’d give to finance professionals on navigating through hard times, in general?
Think about the data, it’s the most important thing to me. I believe something that makes you stay ahead of the game is to have quick access to your financials. In our case, the readiness of our data helped us pull our P&Ls forecasts almost instantly. Then of course, cash is key, so planning your cash-flow in the greatest possible granularity is really important. We recently moved to per client inflow modelling and it really helps with the precision of the planning. Overall, the rapidity to which you can report is crucial during a crisis, and an effective way to achieve it is through automation.
Think about the data, it’s the most important thing to me. I believe something that makes you stay ahead of the game is to have quick access to your financials.
As a tools and automation enthusiast, are there any tools you think all finance leaders should have?
Like many, I love Excel and can’t live without it, we also use Power BI which I’m super excited about and which is a step above Excel. I believe it’s important to have all your company data stored in one database warehouse, to do so at Mews we use Microsoft Azure which allows us to pull out data and connect it to Excel or Power BI anytime. Otherwise, we use Xero, a quite common tool, although it’s starting to create a bottleneck for us and we’re looking to switch to a more robust solution in upcoming months. On the OCR, expense reports and approvals side we use Receipt Bank and ApprovalMax.The last essential tool I can think of is Blendo, a powerful ETL software we use to connect all our tools into one space and extract fresh data without a need to develop our own connections. It’s really user friendly and has a broad range of integrations from CRM systems to ticketing tools.
If you weren’t working in finance, what would you be doing?
Most likely operations, or data and business intelligence (I wouldn’t be able to live without analytics). And if we’re looking for “non-business” jobs, then definitely sports (tennis and weightlifting are my passions). I’m a former tennis player (still play for fun), spent 10 years as a tennis coach and always loved the job, so I can see myself going back to court pretty clearly.
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