Protecting Essential Asset Investments
Organisations across the leisure industry are increasing their investment in high end equipment, especially audio-visual, to attract new customers. But how can the business keep track of this new equipment, minimise the risk of theft and ensure the promised customer experience is not jeopardised?
Working on typically low margins, many organisations cannot afford to undertake time-consuming manual audits on a frequent basis. Yet the latest generation of passive Radio Frequency Identification (RFID) tags are not only low cost and small but do not require line of sight, ensuring they can be hidden from customer view, avoiding any impact on the room design and allowing them to be scanned rapidly in a single sweep.
Karen Conneely, Group Commercial Manager, Real Asset Management (RAM), outlines the importance of regular audits and explains the benefits of passive RFID tags in reducing the time and cost of audits, improving asset traceability and streamlining IFRS compliance.
High End Differentiation
The leisure and hospitality sector has borne the brunt of the continued recession, as their customers’ available disposable income continues to drop. Indeed, despite the boost of the 2012 Olympics and the Jubilee, hotels have seen occupancy rates and revenue per room drop in 2013 back to 2010 levels, according to PwC. Additionally, traditional fitness centres are now facing the growing success of low frills, budget competition.
As a result, markets are fragmenting. Growing numbers of hotel chains are embarking upon major upgrades, introducing state-of-the-art coffee machines, iPod cables, Bluetooth speakers and Smart TVs. Instead of personal trainers, fitness centres are reducing costs by upgrading AV equipment and exploring opportunities for virtual training solutions that allow members to plug in a USB.
The implications of this investment are significant: these are high priced – and highly valued – pieces of equipment. They are not only at higher risk of theft but also expensive to maintain – and even more expensive to replace. But as a fundamental component of the customer experience, organisations cannot afford to have these much publicised pieces of equipment broken or missing.
It is therefore essential to put in place a far more robust and effective process for tracking and maintaining it.
Streamlined and Discrete
In contrast, passive RFID tags can transform the audit process and, critically, remain completely out of customer view. These tags, which can be as small as a fifty pence piece and even disguised within a corporate logo, do not need line of sight and can therefore be hidden inside equipment, behind pictures and under furniture. As a result, the scanning process is up to five times faster than the manual method and an individual can scan multiple tagged items in a location simultaneously in a single sweep around a room.
The process is further improved by integrating the RFID scanning process with the central asset register. The person undertaking the audit has a record of the assets expected and each scan automatically updates the register and flags missing items. The speed and efficiency of the process significantly reduces time and costs, whilst improving audit accuracy.
For organisations seeking to track the return on their investment in new equipment, reports from the asset register can provide essential insight into trends in asset theft or breakage. This information can be used to forecast the on-going investment required to maintain service standards and also drive new strategies for security – from checking specific items during room cleans to better staff training.
In addition, when both staff and guests are aware that items are tagged – and often inaccessible– there is a strong deterrent to theft which is a key consideration for an industry that endures significant annual wastage.
An accurate asset register is valuable not only in tracking trends in asset wastage, but also in asset movement. Across the leisure industry, assets are often moved between locations – especially in gyms where larger items can be relocated to fulfil customer demand. However, many of these asset moves – and disposals – are not shared with the finance team, creating accounting problems. IFRS compliance, for example, requires an organisation to prove that all capitalised fixed assets on the balance are in existence. Obviously this cannot be done daily, but the ability to undertake a rapid, low cost physical audit using RFID tags enables organisations to prove asset location in a relatively fast time frame.
In addition, this proof of location can transform the speed with which an insurance claim is settled in the event of a disaster. Accurate, trusted asset information can also be used to negotiate a significant reduction in insurance premiums.
As organisations across the leisure industry explore new ways to differentiate from the low-frills competition, investment in innovative equipment will continue. It will remain critical to safeguard this investment and to ensure that such asset remain in place to deliver high-quality customer experience.
Improving insight into this expanding asset estate is key. Combining asset forecasting with improved asset accounting and the ability to negotiate lower insurance premiums based on asset accuracy is fast becoming an essential component of a well-run, competitive leisure business.