Growing a Hospitality Business During COVID with Mews CFO Pavla Munzarova
“We're just trying to achieve real-time reporting and real-time accounting. That's kind of my dream. I believe that you don't need monthly closures, so we're trying to report everything in real time as much as possible."
We’ve all heard about the serious impact COVID-19 had on the hospitality sector. Travel is down, and with it hotel bookings. And yet, hotel management software Mews keeps growing. In this episode of CFO Yeah! we spoke to CFO Pavla Munzarova to find out what her team is getting right during all this upheaval.
As you’ll hear, this episode is a little bit different. We’re bringing you audio from a live, virtual AMA. CFO Connect members got to ask Pavla a range of fascinating questions, touching topics such as:
- How she’s planning for another uncertain year
- Her approach to managing international entities and multiple currencies
- Pavla’s philosophy on budget allocation and spending
- Her favorite tools and the company’s plan to roll out an ERP
- Smart, direct communication between finance teams and the wider company
Listen to the podcast for the full AMA audio, with plenty more insightful questions and conversation. Here are just five of Pavla’s interesting observations.
Covid’s impact on Mews & the hospitality sector
It’s been tough. At the end of March, we first figured out what was going on - hotel occupancies almost went down to zero. Which meant our merchant streams also went down to zero.
For us, it meant that we just had to re-plan everything. Same as everybody else. Throw out the budgets and start planning again. And just come up with a safe plan and for us, which meant a path to profitability. We analyzed every single cost, looking at savings, looking at optimizations, and also deciding to centralize.
We had to close a lot of our smaller offices and centralize in Prague, London and Amsterdam. When you're growing so fast for four years, it's not always easy to look at the structure and make sure that everything works in the most efficient way. So this was a good time to revisit this.
We were lucky that we’re not only based on commission revenues, but also have the SaaS part which kind of saved us through this time. The commission-based revenue basically dropped to zero back in March and April. So we had to and basically rebuild the structure of the company and come up with a different direction.
I think hospitality will go through massive innovation. We believe that the guests should not be waiting in lines at the reception, for example. They shouldn't need a key, they should just get to their room when they come to the hotel. All of this can be done online.
Continuous planning to replace the classic cycle
We're just trying to achieve real-time reporting and real-time accounting. That's kind of my dream. But I believe that you don't need monthly closures, so we're trying to report everything in real time as much as possible. So continuous booking has become part of our daily routine.
There’s no more monthly budgeting and forecasting - it’s just planning. We're just looking at all the differences in real time and tracking everything. And we always have an updated plan every single day, basically.
Another change is we started forecasting revenues per customer. It's now super clear how much they’re paying us each month. And then depending on that, we forecast how that specific customer will be able to pay in future as well. And this all became much more exact than what it was before.
Renewed focus on open communication
We’re being open and transparent about financials, which was super important during the crisis. We created a financial results Slack channel where we post every month how we’re performing, how the MRR is, and what payments volumes are doing. We have different dashboards and reports and financials including the profits, so that anybody can see whether we are on track.
We also share our planning and what we are changing, whether we are increasing our expectations of the market, or whether we decided that we’ll hire a couple of people. I think that's really important to be transparent.
I think that's the main purpose of the finance team. What else should we be doing? It's not information that we’re getting for ourselves. We’re getting it for the company. And of course there will always be people who don’t really mind how it's looking, but if they want to understand it, they should have the chance.
I have a dashboard in our BI tool that we're just sending out every single day to a Slack channel, so everybody can subscribe and just have a look and ask questions. And we’re really active with the finance team just answering anything that anybody might want to know.
No pressure to spend budgets
I don't believe in “using up” budgets or having leftovers. We always re-plan every month. So if somebody already knows that they're not going to use it, they should give up that cash and give it to somebody else, because there's not enough of it to just save it in their pocket. So basically we’re not allowing any leftovers.
Some companies are artificially spending cash at the end of each year. And then everybody is just trying to spend a little more than what they had. So that next year they get the same amount - not lower. I just believe that if somebody needs more they should just raise the argument if they have a good business case.
If it’s worth it - if the ROI is worth it - we’re happy to change plans. We are re-planning all the time. So there's really no reason to have your bucket for a year and keep it. And it should work both ways. You should also be able to overspend, but maybe save some if you figure out you don't need it.
The tools Mews use
It's all Microsoft Excel at this point. To be honest, that's where we plan and that's where all the magic lies today. I am looking for automation systems as well. But there's nothing that would satisfy all my requirements. And we kind of developed our own system that in databases and other BIs and reports.
We’re going through a transition today because back with 15 people and three entities, it sounded smart to use Xero, which was already a cloud system and had some automation within it. But with 11 entities, it's just impossible to handle anymore. So we’re going to use Microsoft Dynamics and have a full ERP system.
We use Blendo as an ETL tool. All of the systems within the company - including ticketing, software, or support, and CRM for sales - are connected to Blendo. And then all that information is saved within our data warehouse.
And then we just connect Excel files and Blendo BI files back to this one data warehouse. We can just refresh it with one click and there's no ad hoc work.
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