1.1 Hotel Gross Operation Revenue (10%) 1. Our Business (40%)
Rationale
Hotel Gross Operating Revenue (“GOR”) is the main indicator of our all-round top line performance. A significant number of business strategies are structured based on the budgeted GOR of our hotels. It is a priority for us as a group to achieve our set budgets and reduce negative variance to drive shareholder value.
Definitions
Scoring Mechanism
1. Hotel Gross Operating Revenue (“GOR”) • GOR comprises revenue generated in local currency from: o Rooms o Food and beverage o Other operating departments o Shops and showcase o Other operating revenue
For a hotel to score points in this metric: • Must attain a minimum GOR performance of 80% • Any achievement below 80% will result in no score • Performance above 80% will additional score • Maximum score will be capped at GOR performance of 110% incrementally receive
2. Actual Gross Operating Revenue (“Actual GOR”) • December flash actual 2019 GOR (in local currency) submitted on TM1 on or before 5 January 2020 • For monthly tracking and reporting, actual + remaining months’ forecast GOR (in local currency) submitted on TM1 on or before 5 th day of the following month
GOR Performance
Score
≥ 110% 12.0 100% - 109% 10.0 – 10.9 90% - 99% 9.0 – 9.9 80% - 89% 5.0 < 80% 0
3. Budgeted Gross Operating Revenue (“Budgeted GOR”) • Full year budgeted GOR (in local currency) as submitted on TM1
Measurement
GOR performance = Actual GOR ÷ Budgeted GOR
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1.2 Hotel EBITDA* (10%) 1. Our Business (40%)
Rationale
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) is the main indicator of our bottom line performance and a measure of the overall operational effectiveness. It takes into account the respective cost of operation and also provides a financial measurement of cash flow from operations. A significant amount of how we execute on our business strategies drives our EBITDA.
Definitions
Scoring Mechanism
1. Hotel Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) • EBITDA is net of departmental contribution, undistributed operating expenses, management fee, and non-operating income & expenses 2. Actual Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) • December flash actual 2019 EBITDA in local currency (before bonus) submitted on TM1 on or before 5 January 2020 • For monthly tracking and reporting, actual + remaining months’ EBITDA in local currency (before bonus) submitted on TM1 on or before 5th day of the following month 3. Budgeted Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) • Budgeted EBITDA in local currency (before bonus) as submitted on TM1
EBITDA Performance
For a hotel to score points in this metric: • Must have a positive EBITDA (i.e. not loss making) • Must attain a minimum EBITDA performance of 80% • Performance above 80% will incrementally receive additional score • Maximum score will be capped at EBITDA performance of 110% Budgeted negative EBITDA, to score points in this metric: • Must at minimum attain budget • Performance above budget will incrementally receive additional score • Rationale for a slight difference in scoring mechanism is to encourage loss making hotels to attain budget and target towards a break even situation
Score
≥ 110% 12.0 100% - 109% 10.0 – 10.9 90% - 99% 9.0 – 9.9 80% - 89% 5.0 < 80% 0
EBITDA Performance
Score
≥ 110% 12.0 105% - 109% 10.5 – 10.9 100% - 105% 10.0 – 10.5 < 100% 0
Measurement
• EBITDA performance = Actual EBITDA ÷ Budgeted EBITDA
• In special situations where a hotel budgeted for negative EBITDA: EBITDA performance = 2 – (Actual EBITDA ÷ Budgeted EBITDA)
*Pre-bonus
9
1.3 Hotel Food and Beverage Outlet Profit* (5%) 1. Our Business (40%)
Rationale
Food and beverage (“F&B”) is a key strategic pillar for our business as it contributes to almost half of our group’s revenue. Within the F&B department, this year’s focus is around improving our F&B outlets profitability given the large potential we see in improving and growing this business. To achieve this, every hotel will need to deliver on budget, keeping in view the guiding principles laid out below, so that we are able to improve our guest experience, competitive advantage amongst peers, and solidify our foundations for future growth.
Definitions
Scoring Mechanism
F&B OP Performance
Score
1. F&B Outlet Profit (“F&B OP”) • F&B OP is, excluding Banquet, all F&B-related revenue net of both direct expenses and indirect expenses and adjusted for bonus in local currency 2. Actual F&B Outlet Profit (“Actual F&B OP”) • December flash actual 2019 F&B OP in local currency (before bonus) submitted on TM1 on or before 5 January 2020 • For monthly tracking and reporting, actual + remaining months’ F&B OP in local currency (before bonus) submitted on TM1 on or before 5 th day of the following month 3. Budgeted F&B Outlet Profit (“Budgeted F&B OP”) • Budgeted F&B OP in local currency (before bonus) as submitted on TM1
For a hotel to score points in this metric: • Must have a positive F&B OP (i.e. not loss making) • Must attain a minimum F&B OP performance of 80% • Performance above 80% will incrementally receive additional score • Maximum score will be capped at F&B OP performance of 110%
≥ 110% 6.0 100% - 109% 5.0 – 5.9 90% - 99% 4.0 – 4.9 80% - 89% 3.0 < 80% 0
Budgeted negative F&B OP, to score points in this metric: • Must at minimum attain budget • Performance above budget will incrementally receive additional score • Rationale for a slight difference in scoring mechanism is to encourage loss making hotels to attain budget and target towards a break even situation
F&B OP Performance
Score
≥ 110% 6.0 105% - 109% 5.5 – 5.9 100% - 105% 5.0 – 5.5 < 100% 0
Measurement
• F&B OP performance = Actual F&B OP ÷ Budgeted F&B OP
• In special situations where a hotel budgeted for negative F&B OP: F&B OP performance = 2 – (Actual F&B OP ÷ Budgeted F&B OP)
*Pre-bonus
10
1.4 Forecast Accuracy (5%) 1. Our Business (40%)
Rationale
The ability to have an accurate view of the business is key to providing timely business insight and support operational adjustments where required. This is also essential to the effective execution of business strategies.
Definitions
1. Monthly Actual EBITDA (in local currency) submitted on TM1 on or before 5 th day of the following month
2. Most recent rolling forecast submitted on TM1 on or before 5 th day of the month
3. Monthly variance % of actual EBITDA compared to most recent rolling forecast • January EBITDA actuals will be compared with Budget’s January month
• February EBITDA actuals will be compared with 1+11 forecast’s February month as submitted on TM1 on or before 5th day of February • March EBITDA actuals compared with 2+10 forecast’s March month as submitted on TM1 on or before 5th day of March, April with 3+9’s April, etc.
Measurement
Scoring Mechanism
• Monthly variance % = Actual EBITDA ÷ Most recent rolling forecast - 1
To score points in this metric, the variance must fall within ±10% variance with extra point granted
• A monthly score will be given based on each month’s accuracy
Monthly Variance
Score
Within ±1%
6
• Full year score and YTD tracking will be based on the average of the monthly scores earned o Sum of monthly scores divided by the number of months
Within ±5%
5
Between ±5% to 10%
3
More than ±10%
0
11
1.5 Drive E-direct (5%) 1. Our Business (40%)
Rationale
E-direct channels have been identified as our most profitable and efficient channel. In Jul – Dec 2018, our combined average contribution of the E-direct channel was 13.4%, compared to our competitor benchmark of 14% and same period previous year 9.8%. We have identified book direct as our company-wide strategic initiative and this year we want to focus on the E-Direct business under Retail segments. With all the investments enhancing digital platforms, marketing and loyalty programs, our hotels should be able to increase their share of E-direct business and drive more profitable business.
Definitions
Guiding Principles
1. E-direct channels • Desktop and mobile website – Shangri-La.com, Hoteljen.com • Shangri-La app • WeChat Interfaced Platforms • E-Partnership, e.g. Fliggy
In hotels’ attempt to drive E-direct, to minimize risk and undesired fluctuations, we are setting ground rules to prevent drastic changes in the hotel’s segmentation mix: • Share is calculated based on Retail & Discount market segments to make sure hotels spend their effort to push the right segments • Hotel’s monthly E-direct share shall be reported and monitored by SLIM Revenue Optimization team monthly • Hotels are expected to maintain a steady uptrend on the E-direct share instead of taking drastic measure to push E-direct business in a particular period • Hotels will be given discipline goals on rate parity which will help drive the E- direct share • For potential ways to increase your share of e-direct. Details will be shared later. • This document will be constantly updated by HQ digital marketing team and should be followed in conjunction with the revenue optimization teams strategies For a hotel to score points in this metric: • YTD growth (YTD – 2018 E-Direct) must attain a minimum performance of 80% of the “2019 Growth Target” • 80% of the growth target or above will incrementally receive additional score • Maximum score will be awarded for 110% and above of the growth target • Dec YTD score will be adopted as the 2019 BSC final result E-Direct Score ≥ 110% 6.0 Scoring Mechanism
2. Retail and Discount room revenue • Retail & Discount room revenue in constant USD for 1 January 2019 – 31 December 2019, as reported on Blueprint, submitted by 7 January 2020 • Retail & Discount segments (under TravelClick Demand 360 definitions) include
Market Segments Public Rates (RAC) Packages (PKG)
Market codes ADV, SMR, RKO
PBC, PCS, PVR, PKG, PGL, PKO
Wholesale Online (IWS) Negotiated Rates (COR)
IWS COT LSG
Long Stay (LSG)
Individual Others (OTH)
OTH, GCR
• For monthly reporting, actual Retail & Discount room revenue in constant USD submitted and made available on Blueprint by 7 th day of the following month
3. Retail and Discount room revenue generated via E-direct channels • Retail and Discount room revenue in constant USD for 1 January 2019 – 31 December 2019 generated from E-direct channels as reported on Blueprint, submitted by 7 January 2020 • For monthly reporting, actual Retail & Discount room revenue generated via e-direct channels in constant USD submitted and made available on Blueprint by 7 th day of the following month
4. E-direct share • E-direct share = Retail & Discount room revenue generated via E-direct channels ÷ Total Retail & Discount room revenue
100% - 109% 5.0 – 5.9 90% - 99% 4.0 – 4.9 80% - 89% 3.0 < 80% 0
Measurement
Every hotel is provided an individual E-direct share target, which is an improvement goal based on their actual 2018 E-direct share of Retail & Discount room revenue. “2019 Growth Target” (i.e. 2019 E-direct Share Target – 2018 E-Direct) per hotel can be found in this link. 12 “YTD Growth Target” is provided for easier tracking (i.e. 2019 Growth Target divided into 12 months and by Dec, hotels are expected to achieve their “2019 Growth Target”).
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1.6 Grow Profitable Market Share RGI (5%) 1. Our Business (40%)
Rationale
RGI premium represent our ability to drive higher RevPAR over a defined set of competitors. Growing RGI year on year, is a measure of our ability to extract more value out of the market and our customers than our competitors. Growing RGI premium demonstrates the value of our strategies to build customer preference and monetize that preference into higher topline returns over defined competitors. As EBITDA is a critical goal with higher weighting, our strategies to drive topline RGI must be profitable and drive incremental profit.
Definitions
Guiding principles
1. RGI Premium • Our RevPAR divided by compset RevPAR. An index over 100% indicates premium against compset. Less than 100% inidcates competitors have preference with customers over our hotel. • RGI premium measures brand preference and our ability to attract more revenue per available room over our competitors. A healthy prmeium is above 115%. • RGI is found on your Smith Travel Market Share report. 2. RGI Growth • Percent change between this year RGI and last year RGI. • Growing our RGI yoy demonstrates our ability to extract more value from our customer and the market than our defined competitive set. • Collective comp set growth can be a proxy for organic growth; growing RGI shows our ability to outperform organic / comp set growth. • RGI growth is found on your Smith Travel Market Share report For the 19 hotels (HJM, MAC, SLBO, SLTN, SLWZ,SLBT, SLCC, SLHH, SLMZ, SLQF, SLQH, SLUB, SBHI, SLDQ, SLGL, SLLS, HJMD, HJP, RSR) that do not have Smith Travel Market Share report, Rate Parity will be used in place of RGI goal.
In hotels’ attempt to drive RGI growth, to minimize risk and undesired fluctuations, we are setting ground rules to prevent drastic changes in the hotel’s segmentation mix: • Comp sets should consist of hotels we directly compete against for customers. The goal is to grow RGI against a proper comp set. Any comp set change is subject to the approval by EVP Revenue Optimization, Regional EVP Operations and IMBD. • Goal is to grow ‘profitable’ RGI that results in incremental profits. Do not sacrifice EBITDA for RGI gains. • Smith Travel Research (STR) reports are official measurement of achievements towards goal. • For hotels that do not have a valid STR comp set, Rate Parity will be used in place of RGI as a goal.
Scoring Mechanism
For a hotel to score points in this metric: • YTD must attain a minimum performance of 80% of the RGI goal (the target) • 80% of the target or above will incrementally receive additional score • Maximum score will be awarded for 110% and above of the target • Dec YTD score will be adopted as the 2019 BSC final result RGI Score ≥ 110% 6.0
Measurement
Every hotel has been provided an individual RGI goal, which is an improvement goal based on current RGI levels and historical growth trends. Please refer to this link for your RGI goal. Your goal is measured off your primary comp set, for hotels that have more than 1 comp set.
100% - 109% 5.0 – 5.9 90% - 99% 4.0 – 4.9 80% - 89% 3.0 < 80% 0
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1.6 Rate Parity (5%) – For 19 hotels* without STR reports only 1. Our Business (40%)
Rationale
A key strategic pillar to achieving our book direct strategy is achieving pricing parity on all our channels. Our guests are unlikely to book on our own channels which are the most profitable to us such as the Shangri-La App, Shangri-la.com, hoteljen.com if they can find cheaper rates through third parties such as C-trip or Booking.com to whom we pay a large commission for every transaction. Therefore, we must achieve rate parity which is the key enabler of successfully executing our Book Direct strategy.
Guiding principles
Definitions
In the hotels’ attempt to drive rate parity, to minimize risk and undesired fluctuations, we are setting these ground rules to prevent drastic changes in rates: • The tool will take into account a 2% buffer to account for any possible discrepancies caused by rounding, exchange rate, etc. • Only if the variance between the rate on brand.com and a third party is higher than 2%, will this be marked as "lose" (out of parity). For a hotel to score points in this metric: • Must attain a minimum performance of 80% of Rate Parity goal (the target) • 80% of the target or above will incrementally receive additional score • Maximum score will be awarded for 110% and above of the target • Dec YTD score will be adopted as the 2019 BSC final result Scoring Mechanism
1. ForNova A tool, we have subscribed to, which provides us with a system that tracks the rates of our hotels on: • Brand.com; • 3 contracted OTA’s (Booking.com, Expedia, and Ctrip); and • 3 meta's (Tripadvisor, Trivago and Qunar). Up to 3 points of sale (e.g. expedia.com.au, .uk or .jp) have been selected for each OTA / meta based on the main geographic feeder markets of each hotel individually Please refer to this link for the list of points of sale which have been validated by the regional revenue team and also the “2019 YoY Growth Target”
2. Brand.com This includes: • Shangri-La.com • Hoteljen.com
3. Rate shopped Lowest price point available for public sale, this can be flexible or with restrictions (such as Advance Purchase) Rate integrity is established when the price point on brand.com is equal (or lower) than on the OTA/meta (no matter what rate product) Items such as currency, taxes, service charge, etc are taken into account for rate integrity comparison
Rate Parity
Score
≥ 110% 6.0^ 100% - 109% 5.0 – 5.9 90% - 99% 4.0 – 4.9 80% - 89% 3.0 < 80% 0
Measurement
Rate integrity score = percentage of times a rate found on brand.com was equal or lower than on the OTA/meta (measured from 1 January – 31 December 2019) The measurement can be found on the dashboard when entering the ForNova online tool and change time view to "Month". Rate integrity performance = actual rate integrity score ÷ rate integrity score target
^ For hotels with goal > 90%, 6.0 will be awarded if hotel achieves rate parity score of ≥ 95%
*HJM, MAC, SLBO, SLTN, SLWZ,SLBT, SLCC, SLHH, SLMZ, SLQF, SLQH, SLUB, SBHI, SLDQ, SLGL, SLLS, HJMD, HJP, RSR
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2. Our People (20%) 2.1 Implementation of Shangri-La Academy (5%)
Rationale
To implement a consistent Shangri-La Academy branding for Learning (physical training room and communication materials) and to build the capability of the hotel to roll out digital learning platform for employees.
Guiding Principles
Definitions
1. The hotel is determined to have implemented a consistent Shangri-La branding when:
• To ensure Shangri-La Academy brand rollout and consistency across the organization • To equip learning managers of all hotels with the ability to roll out LMS platform in their hotel
• Shangri-La Academy signage for the learning room is installed and visible to all colleagues (in the case where a hotel does not have learning room signage is used during learning sessions)
• All materials used during training and for communication is following the Shangri-La Academy branding guidelines and identity
2. The learning manager is determined to have the ability to roll out the LMS platform if he/ she has been trained and certified in the following areas:
• Creation of digital learning program
• Launching & Cascading of the LMS platform
• Maintaining the LMS platform
Measurement
Scoring Mechanism
• Roll out the rebranded Shangri-La Academy following corporate guidelines and launch programs to change the employees’ mindset from Training to Learning. • The learning manager of each hotel must be trained and certified to have the ability to roll out the LMS platform in hotel.
For a hotel to score points in this metric:
a) Must roll out rebranded Shangri-La Academy following corporate guidelines and launch programs to change the employees’ mindset from Training to Learning b) The learning manager of each hotel must be trained and certified to have the ability to roll out the LMS platform Score
The Area Director of learning and development will audit the hotels during their visits and will report on both points by 31 Oct 2019.
Attainment of (a) and (b)
5
Attainment of (a) but not (b)
0
Non-attainment of (a) and (b)
0
15
2. Our People (20%) 2.2 Core Learning Program (5%)
Rationale
To drive consistent standards and enhance safety culture, all eligible colleagues are to complete and pass the core learning programs (Code of Conduct, Hotel Security, “FLS”, “InfoSec”, “SFSMS”).
Guiding Principles
Definitions
• To encourage colleagues to fully participate in our core learning, creating a culture of learning and fulfilling our statutory requirements. • Audits of hotels on this topic will be conducted during HR partner’s visits and internal audit assessment; hence, maintenance of proper records is necessary
Core Learning Programs that all applicable employees are expected to complete and pass:
Core learning program
Applicable* to
a) Code of Conduct
All employees
b) Hotel Security
All employees
c) Fire Life Safety (“FLS”)
All employees
d) Information Security Training (“InfoSec”)
All employees
e) Shangri-La Food Safety Management System Basics (“SFSMS”)
All food handlers
*Applicable to employees joined on or before 1 October 2019
Scoring Mechanism
Measurement
For a hotel to score points in this metric:
• CLP completion rate = Number of applicable FTEs that have completed ALL core training programs ÷ total number of applicable FTEs in the hotel (as at 1 Oct 2019) • Pass results for the respective programs will be based on the stipulated percentage as communicated by Shangri-La Academy
• All applicable employees must complete (minimum CLP completion rate of 100%) and pass the learning programs • Any achievement below 100% will result in no score
CLP completion with pass results Score
CLP completion final data will be collected on 31 Oct 2019. Area director of learning & development will be collecting learning completion data and pass results from hotel training manager.
100%
5
< 100%
0
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2. Our People (20%) 2.3 Talent Review & Succession Planning (5%)
Rationale
To actively implement the talent review and succession planning processes so that we build a strong bench for all critical positions.
Guiding Principles
Definitions
• Each hotel leadership team is responsible for identifying and stewarding the development of high potentials
1. Critical positions
• Critical positions at hotel level is defined as all EXCOM positions
• It is a plan and not an appointment of successor
2. Readiness of candidates
• R0: A “stand-in” candidate who can hold the fort in the interim
• R1: A likely candidate who is ready now
• R2: A potential candidate who is 1 to < 3yrs away
• R3: A possible candidate who is 3 to < 5yrs away
Scoring Mechanism
Measurement
For a hotel to score points in this metric:
• Target achievement = Number of EXCOM positions that have at least one R2/ R3 candidate ÷ total number of EXCOM positions in the hotel
• Must implement talent review and succession planning process & tools • Must attain a minimum succession planning target achievement of 100% for EXCOM positions
% of EXCOM positions with at least one R2/ R3 candidate
Score
100%
5
Based on the succession plans submitted by hotel, the final data on target achievement will be computed by Corporate HR by 31 Oct 2019.
< 100%
0
17
2. Our People (20%) 2.4 Employee Experience (5%)
Rationale
To better understand the drivers that matter to the Organisation/ employees and focus our efforts on building a nurturing environment in which our people thrive.
Guiding Principles
Definitions
• The survey should be administered in an objective and transparent approach to capture employees’ genuine feedback. • The hotel leadership team is responsible for championing the initiatives in enhancing the employee experience.
1. Employee Participation
• The understanding of employee experience is via the launch of a designed survey and employee participation refers to the applicable employees who have completed the survey.
2. Improvement initiatives
• Improvement initiatives refers to intervention plan which each hotel puts in place to enhance employee experience based on the findings from the survey.
Scoring Mechanism
Measurement
For a hotel to score points in this metric:
• Employee Participation Rate = Number of employees that have completed the survey ÷ total number of eligible participating employees • Efforts to share survey results, analysis and ensure that at least 3 improvement initiatives are being planned for at hotel
a) Must attain a minimum employee participation rate of 80% b) Must communicate the survey results and provide plans to implement at least 3 improvement initiatives
Score
Attainment of (a) and (b)
5
Attainment of (a) but not (b)
0
The final data on (1) employee participation rate and (2) plans for improvement initiatives will be collected by 31 Oct 2019.
Non-attainment of (a) and (b)
0
18
3.1 TrustYou CompIndex (15%) 3. Our Guests (30%)
Rationale
Our guest’s satisfaction plays a critical role for us to grow and be successful as a group. In 2018, we implemented TrustYou, a comprehensive feedback measuring tool that evaluates guest satisfaction dynamically – not just looking at ratings (internal post stay surveys and ratings on third party sites), but also how we perform relatively against our selected comparable hotels in each market. Our aim is to continue to delight and service our guests to the highest standards, which would reflect on the TrustYou CompIndex Score.
Definitions
Scoring Mechanism
1. TrustYou A platform, we have subscribed to, which provides us with a system that aggregates guest feedback
1. TY CompIndex • Must attain at least 0.90 to get a score • Every additional point performance above 0.90 will result in a higher score • Maximum 15 score will be capped at 1.10 2. Extra Points • Achieving either one of the below will gain the hotel 2 extra points: a) Shown improvement vs. 2018 TY CompIndex Score b) Meet or exceed TY CompIndex 1.1 • Achieving both items will gain the hotel 2 extra points only
2. Our hotel performance score Simple average score achieved by our hotel based on an aggregation of: • Internal post-stay (“Overall stay experience”) and post-event (“Overall event experience”) surveys, the process for which is owned by QI; and • External ratings of our hotel on 200+ third party influencer websites (e.g. Trip advisor)
3. Peers Competitive hotels for TrustYou compindex as per STR/Commercial compset
4. Peer performance score Simple average score achieved by an individual peer hotel based on an aggregation of: • Internal post-stay surveys (if they have subscribed to Trust You); and • External ratings of peer hotels on 200+ 3rd party websites (e.g. Trip advisor)
TY CompIndex
Score
≥ 1.10
15
1.00 – 1.09
13 – 14.8
0.90 – 0.99
11 – 12.8
5. Competitor average score Simple average of the peer performance scores achieved by all competitive hotels (excluding our hotel).
< 0.90
0
Any improvement vs 2018 YE Or Meet/exceed 1.10
+ 2 Extra Points
Measurement
TrustYou CompIndex Score* = Our hotel performance score ÷ Competitor average score
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*YTD figure
3.2 TrustYou Post Stay Survey – Key Drivers (5%) 3. Our Guests (30%)
Rationale
Our Post-Stay Guest Survey measures the Overall Stay Experience(OSE) which is one component in the TrustYou Performance score leading to the hotel’s CompIndex. Post-Stay surveys are categorized as “verified reviews” as a survey invitation is directly sent to the guest after check-out. The Post-Stay Guest Survey also measures the key drivers of OSE and have been in place since 2009. Measuring the key drivers are useful to assist hotels to understand what areas to focus and crucial to drive improvement efforts in guest experience.
Definitions
Scoring Mechanism
1. Post-Stay Survey Surveys directly emailed to guest by third party vendor, TrustYou, after check out. • 60 day suspension rule applies when guest stay in the same property. • 14% conversion rate in 2018
Achieving either one of the below will gain the hotel 1 point for that Key Driver: a) Hotel must show at least one full point improvement vs 2018 YE results.
2. Key Drivers of Overall Stay Experience • Our People • Overall Arrival • Overall Departure • Overall Breakfast • Overall Guest Room & Bathroom
b) Meet or exceed Key Driver Score 90
Key Drivers
Criteria
Score
Our People
1
Arrival
1
Departure
Attainment of (a) or (b)
1
Breakfast
1
Guest Room & Bathroom
1
Measurement
Post-Stay Key Driver Score* = Average of all ratings under each Key Driver
20
*YTD figure
3.3 Security (2.5%) 3. Our Guests (30%)
Rationale
Whilst security audits have always been conducted by HQ Security, regrettably we have seen big disparity in terms of how individual audited hotels have followed up with their non- compliant items. In order to ensure safety of our guests and the integrity of the brand in our fast-expanding portfolio, we must be committed to enhance our security standards. We shall continue to use the new security audit mechanism launched in 2018 and hotels are expected to continue adhering and cooperating with this new directive.
Definitions
1. Security Audit • Contains 183 Audit Questions • Pass / Fail for all audited questions, with grace period for rectification
• Mandates submission of Action and Feasibility Plan (“AFP”) within 21 days post audit • Mandates discussion with GM / EVP / COO within 14 days post submission of AFP • Mandates monthly updates from Hotel Security Director / Manager / GM on progress of action plan post discussion
2. Operationally controllable questions, included in hotel BSC This is a subset of the 183 Audit Questions in Security Audit, containing only 30 questions. These questions are absolutely critical yet can be relatively easily rectified, in the sense that they should not require massive amount of CapEx in theory. Also included are most of the laundry workshop questions to reflect on the unfortunate accidents happened in previous years.
Guiding Principles
Scoring Mechanism
• HQ Security will ensure fairness of security audits by deploying field auditors across regions (e.g., Field auditor based in North China will only audit East / South China hotels) • Concerned hotels will be given 60 days to complete rectification procedures for any failed items on the 30/30, hotels may obtain “pass” again on failed questions provided that there is evidence of completion of rectification procedures • Hotels are obliged to provide documentation or photos to HQ Security as evidence; spot checks may also be conducted to provide additional evidence to the senior management
Number of BSC questions passed initially
Rectification results
Score
30
None required
3
Pass
2
29 or below
Fail
0
All final data to be collected by 31 Oct 2019.
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3.4 Food Safety (2.5%) 3. Our Guests (30%)
Rationale
F&B is a key strategic pillar for our business as it contributes to almost half of our group’s revenue. To maintain our quality guest experience and the integrity of the brand, we must be committed to safeguarding our food safety.
Definitions
1. Food safety audit program (“SFSMS”) • Program entails an annual food safety audit at each of our hotels, encompassing one day of observation of the implementation of 42 Food Safety Management System policies and 11 guidelines • Two statuses may be awarded to the hotel by the auditor:
Green – score 80 or above, maximum of one “ category-1 ” major non-compliance recorded; Red – score 79 or below, or two or more “ category-1 “ major non-compliance recorded; For hotels that have scored Red in the initial audit, Diversey will conduct a second food safety audit within 60 days of the first one.
Guiding Principles
Scoring Mechanism
• Food safety and hygiene of all outlets must not be compromised as it affects our brand reputation • Failure of any of the 8 category-1 major policies may increase our risk exposure and jeopardize our brand • A food safety culture must be demonstrated by the ex-com and management team to ensure commitment and adherence to SFSMS • Rectification and corrective action of non-compliant policies must be handled in accordance with SFSMS guidelines
Initial food safety audit score Rectification results
Score
Green
None required
3
Scoring Green on mandatory re-audit
2
Red
Scoring Red on mandatory re-audit
0
All final data to be collected by 31 Oct 2019.
22
3.5 Fire Life Safety (2.5%) 3. Our Guests (30%)
Rationale
The Fire Life Safety (“FLS”) Audit is conducted to verify each property’s performance and compliance to the prescribed corporate policies, standards and procedures. The Audit will be conducted at least once a year by HQ Engineering or its authorized representative.
Definitions
Scoring Mechanism
Criteria 2 Overall (195 questions) % of Compliance >= 80%
The FLS Audit in total comprise of 195 questions, of which a subset of 40 questions are selected and denoted as BSC critical questions.
Criteria 1 Score 40/40 BSC questions
Rectification results of BSC questions within 60 days
Score
The activities to be undertaken during the on-site FLS audits for each of the hotels will include the following: 1. Discussions with the General Manager and FLS committee to review the support and leadership from hotel management in driving various FLS functions, including FLS training, fire prevention, FLS system testing & maintenance & fire emergency planning 2. Review of documents related to some critical compliance requirements –permits and certificates, maintenance contracts, critical record/evidence of FLS training, fire hazard elimination program, system testing and fire drill etc.
>=80% Compliance
3
Score 40/40
Not required
< 80% Compliance
1
Score 40/40
2
>= 80% Compliance
Score 39 or below 1
Score 39 or below
Score 40/40
1
3. Walkthrough of the facilities including both the FOH and BOH, areas where there are significant fire and life safety exposures.
< 80% Compliance
Score 39 or below 0
4. Functional test of fire protection system such as fire alarm system, fire pumps etc
5. An exit meeting with the General Manager or his designate will be held at the end of the audit in which the followings are highlighted: a) Best practices
b) High risk and non-compliances issues c) System and equipment improvements d) Repeat findings
6. The General Manager shall ensure that all highlighted issues particularly those noted as “high risk” are duly acted upon.
All final data to be collected by 31 Oct 2019.
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3.6 Engineering Preventive Maintenance (2.5%) 3. Our Guests (30%)
Rationale
To ensure major Mechanical, Electrical and Plumbing (“MEP”) systems, guestrooms and kitchen equipment are well maintained to meet legal requirements, operation requirements and guest expectation. Negligence in maintenance or under-spending on maintenance is likely to result in business interruption and higher capex spend later which is not in our best interests.
Definitions
Measurement
1. Annual Critical Preventive Maintenance This is critical requirement to ensure the major MEP systems are properly maintained to : a) High system reliability and optimum performance b) Maintain asset value 2. Comprehensive Guestroom Preventive Maintenance The Guestroom Preventive Maintenance (“PM”) is essential to maintain all the operating conditions in guestrooms are working properly towards achieving guest comfort and enhance guest experience.
As displayed in the PM Apps by year end, the respective completion rate in % for:
1. Annual Critical Preventive Maintenance (target 100% completion) 2. Comprehensive Guestroom Preventive Maintenance (target 85 - 100% completion) 3. Kitchen Equipment Preventive Maintenance (target 100% completion)
Scoring Mechanism
Scenario
Score
1. Annual Critical Preventive Maintenance: 100% 2. Kitchen Equipment Preventive Maintenance: 100% 3. Comprehensive Guestroom Preventive Maintenance: 100% 1. Annual Critical Preventive Maintenance: 100% 2. Kitchen Equipment Preventive Maintenance: 100% 3. Comprehensive Guestroom Preventive Maintenance: above 85% Hotel achieve at least any 2 of the below 3 criteria : 1. Annual Critical Preventive Maintenance: 100% 2. Kitchen Equipment Preventive Maintenance: 100% 3. Comprehensive Guestroom Preventive Maintenance: above 85%
3. Kitchen Equipment Preventive Maintenance This is essential in order to:
3
a) Prevent Fire Hazard and safety issues b) Prevent SFSMS and hygiene issues c) Meet legal compliances
2
4. Preventive Maintenance Apps The scope of preventive maintenance works for the above categories will be listed in the preventive maintenance apps. DOEs will be able to update the system when works are completed and a monthly report will be provided for ease of tracking progress.
1
0
Otherwise
All final data to be collected by 31 Oct 2019.
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4.1 Food Waste (5%) 4. Our Community (10%)
Rationale
Food loss and waste amounts to a major depletion of resources, including water, land, energy, labor and capital, and it needlessly produces greenhouse gas emissions, contributing to global warming and climate change. Measuring food waste will enable hotels to better understand the main food contributors of waste and help us proactively manage potential areas of food waste reduction.
Definitions
1. Buffet waste/Buffet Overproduction (ADD, Colleague Restaurant, & Banquets) • Food prepared for the buffet that was not consumed and cannot be diverted • Excess buffet food discarded after the meal period or exceeding its shelf life 2. Plate waste (Colleague Restaurant only) • Food served to colleagues that was not consumed • Excess buffet food discarded after the meal period or exceeding its shelf life • Leftovers on the colleague’s plate
3. Diversion Refers to the practice of sending materials (in this case food) to another, beneficial use rather than to the landfill (check local health regulations) such as: • Donation; Feeding animals; Digesters, Industrial use; Composting
Guiding Principles
• Each of our hotels must demonstrate their commitment to reducing food waste by first properly and thoroughly measuring food waste • Maintain a separate collection bin for your buffet waste vs. general waste and guest plate waste. • The collection of food waste must be established at your All Day Dining outlet. If your All Day Dining does not serve buffet for all 3 meal periods, collection must be established at your Colleague Restaurant. Food Waste Worksheet are located at the BSC Resource Center on Sharepoint. o ADD: All hotels, except SLTO, SLV, HJHK, CWSW, SLMC, SLLN, SLTY. Note that Winnow Hotels only need to upload monthly best practice on Sharepoint Worksheet, as waste figures will be provided directly by Winnow to HQ. o Colleague Restaurant (applicable only to these hotels: SLTO, SLV, HJHK, CWSW, SLMC, SLLN, SLTY) o Banquets (applicable to SLPR) • Hotel CSR Champions, Regional F&B and HQ F&B will monitor hotel’s progress, compliance and assistance needed.
25
4. Our Community (10%) 4.1 Food Waste (5%)
Measurement
Scoring Mechanism 1. For a non-Winnow hotel to score a Pass in this metric: • Must measure and record All Day Dining buffet / overproduction waste data daily (or Banquets, where specified). • Timely monthly submission of food waste data and at least 1 observation/action taken/best practice on food waste reduction efforts. 2. For a Winnow hotel to score a Pass in this metric: • Minimum 95% food categorization. Monthly submission of food waste data will be managed by Winnow Systems. • Hotels are required to submit at least 1 observation/action taken/best practice on food waste reduction efforts, using the Food Waste worksheet for the respective hotel. 3. For Hotels measuring food waste at the Colleague Restaurant, to score a Pass in this metric: • Must measure and record buffet /overproduction waste data AND plate waste daily. o Separate and measure excess food left on the buffet or prepared for the buffet that will not be consumed. o Separately, measure the colleague’s plate waste ( food waste only ) • Monthly submission of food waste data and at least 1 observation/action taken/best practice on food waste reduction efforts. • Hotels who must record Banquet Food Waste will do so for the days and meal periods in which they have banquet. This will be verified against recorded banquet business. • Record weight of food waste bins and enter data onto tracking sheet. Be sure to exclude the weight of the bin when recording data. • For ADD and Colleague Restaurant, please note total monthly meal period covers. For Banquets, please note daily covers for the applicable date. • A scale is required either at the point of collection or at the garbage room • Completed submission of monthly food waste tracking sheet on Sharepoint by NO LATER THAN the 5th of the following month (F&B worksheets, not CSR worksheet) • Partial month’s data input or late submissions will score a 0 for that month. • Colleague Restaurant only: Leftover food on colleague plates should be sorted separately from general waste, i.e. napkins, cartons, bottles, etc. Only measure food waste.
Hotels
Result
Monthly Score
Non-Winnow Colleague Restaurant Banquets
100% food waste data input monthly (all days and waste streams recorded properly). There will be no partial points given. On time monthly submission of food waste data and at least 1 observation/action taken/best practice on food waste reduction efforts. Minimum 95% food categorization On time monthly submission of food waste data and at least 1 observation/action taken/best practice on food waste reduction efforts.
0.5
Winnow Hotels
0.5
26
4.2 Volunteerism (5%) 4. Our Community (10%)
Definition • Scope of volunteer activities: Colleagues can volunteer to take part and/or be of service to help the local community, or a registered charity, or a non-profit organization which the Group/Property have identified as beneficiaries or partners under its CSR efforts. Such volunteeractivities with external stakeholders may be organized in-house or by/with these beneficiaries or partners and shall involve thecommitment of our colleagues’ time, personal effort such as their skills and expertise, and even, in some cases, financial contribution. • The Group is committed to promoting social development and to protecting the environment under its CSR programmes. Colleagues can take part in volunteerism projects under the Rationale • To promote and support the company’s Corporate Social Responsibility (CSR) objectives by encouraging all colleagues to volunteer in at least one activity under the Group or Property’s CSR programmes. • To encourage collaboration and stronger team spirit among colleagues as they work together for a common cause to make a difference in the communities where we operate.
following programmes: o EMBRACE projects o SANCTUARY projects o Group CSR initiatives o Other volunteeractivities organized jointly or on behalf of the Group/Property by appointed 3rd parties.
2. Volunteer Leave • Shangri-La’s Volunteer Leave Policy encourages and recognizes the participation of our colleagues in any of the approved Group and/or Property CSR programmes. • All permanent employees and trainees are eligible for Volunteer Leave, up to a maximum of 8 hours per year. • Colleagues can apply for Volunteer Leave when they participate in any of the approved volunteer activities during their normal work hours. • Non-Group/Property approved volunteeractivities are excludedfrom the Volunteer Leave Policy and cannot be counted towards the total volunteerrate and hours from the Property. • Line Manager’s approval must be secured for Volunteer Leave before participating in the activity. Volunteer leave approval will not be given retrospectively. • All Volunteer Leave cannot be carried forward or be used as part of Annual leave. • All Volunteer Leave are to be properly recorded in the HR Leave system.
3. Maximum score: 6 •Full score is based on volunteer % against total property headcount (3.0 score) and the average volunteer hours per colleague (3.0 score). •Number of volunteer % is rounded up to a whole number. Every 1% increase will gain 0.1 score. Must attain at least 60% to geta score.
•Average hours of volunteerism is kept to one decimal place. For every 0.1 increase in volunteer hours, 0.1 score is added. Must attain at least 2 hours to get a score. •The total property headcount is the sum of permanent employees and trainees, including new employees and employees who have since left the company. •Volunteers who have resigned can still be counted towards the total number of volunteers and volunteer hours in recognition of their effort and contribution under the property’s Balance Scorecard. •The final Volunteerism score in the Balance Scorecard for the property will be the score as of end December.
4. Target •To achieve 80%+ volunteer rate against total property headcount and at least an average of 4 hours’ volunteer time per colleagueduring the year.
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4.2 Volunteerism (5%) 4. Our Community (10%)
Scoring Mechanism
Procedure Guidance for Event Organisers Before each Event :
Volunteers % as a total hotel headcount
Average volunteer hours per staff
Score
Score
• All volunteer activities undertaken by the Property must state its purpose, desired outcomes and activity details (Refer to the Volunteerism Project proposal). All necessary approval and due diligence must be carried out before the activity can take place. • Volunteers must be properly briefed and assigned their tasks before joining the activities. Their participation must be recorded after each activity. After the Event: • Event organisersare to submit a Summary Report of the Volunteerism Project to the CSR Committee for review. • Event organisersshould encourage participants to submit the Volunteerism e-questionnaire. • Ensure volunteers’ participation details are entered in the Volunteerism Monthly Tracking Report on Sharepoint (2019 BSC Volunteerism .) • Complete the monthly tracking report by the 5thday of the following month. • Share photographs/articles of the activity on the Group Sustainability Blog/Yammer and other internal communications channels where appropriate.
≥ 80%
3
≥ 4 hours
3
70% - 79% 2 – 2.9
3 - 3.9 hours
2 – 2.9
61% - 69% 1.1 – 1.9 2.1 - 2.9 hours 1.1 – 1.9
60%
1
2 hours
1
< 60%
0
< 2 hours
0
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