We become what we behold. We shape our tools and then our tools shape us.
—Marshall McLuhan
In the hospitality industry, benchmarking is a trusted tool for analyzing operational performance. Common KPIs (key performance indicators) such as revenue per available room, food cost percentages, and customer satisfaction scores, help measure management’s effectiveness. These metrics often influence compensation, contract renewals, and the overall success of the business versus a competitive set or industry standard.
But what if benchmarking could do more than track performance? What if the same techniques used to measure whether we have maximized room rates or restaurant profitability could uncover systematic fraud within your organization?
Same Tool New Perspective
Imagine analyzing patterns in commission structures, vendor payments, rebates, or employee benefits data. Could these reveal red flags for collusion or fraud? As an industry, have we considered that the analytical methods, like benchmarking, we rely on for financial strategy might also expose schemes costing organizations thousands, or even millions of dollars?
Benchmarking isn’t just about operational insights. It can be a powerful fraud detection tool, if we learn to look at the data differently.
Insights from Dr. Erik Lie
In his book Catching Cheats: Everyday Forensics to Unmask Business Fraud, Dr. Erik Lie, finance professor at the University of Iowa’s Tippie College of Business and the Amelia Tippie Chair in Finance, demonstrates how simple benchmarking techniques can uncover fraud hiding in plain sight.
Consider these examples:
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Lottery fraud: Clerks winning major prizes at twice the rate of regular players signaled a systematic fraud ring.
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Real estate collusion: Realtor fees that remained nearly identical despite market competition revealed widespread collusion among agents.
These cases didn’t require advanced forensic tools, just comparative analysis using existing data.
Why This Matters for Hospitality
HFTP has invited Dr. Lie to be part of our webinar series. He will share his research and demonstrate two powerful methods that have exposed billion-dollar scandals, including:
His session will show that fraud detection isn’t just for forensic accountants, it’s a skill every hospitality professional should master no matter what discipline. By applying benchmarking beyond KPIs, it is possible to protect organizations from costly fraud, increase the integrity of financial reporting and potentially increase the profitability of the business.
Reshape Your Tools
Benchmarking has always been about measuring success through understanding the numbers. But it can also be a safeguard against fraud. Are you ready to shape this tool for a different purpose? Gain some new knowledge and perspective from Dr Lie in this upcoming webinar, free for industry professionals to attend the live session.
Who should attend? Hospitality professionals across all disciplines, from operations and finance to HR and procurement, anyone who works with organizational data and cares about protecting their company’s integrity.
Join the webinar on Thursday, December 11.
Register now and transform how you view the data you already have access to.
Arlene Ramirez
Arlene Ramirez, Ed.D., Senior Vice President of Learning for HFTP, has over 25 years of hospitality finance experience. She brings extensive expertise in various segments of hospitality business operations to her role. Her financial background from the corporate and property level proves invaluable in designing relevant educational content for HFTP’s community of finance and technology professionals. Dr. Ramirez was also a faculty member at the Hilton College of Global Hospitality Leadership, allowing her to effectively bridge theoretical concepts with practical applications in HFTP’s educational initiatives. Connect with Arlene on LinkedIn.
She holds a doctorate in Instructional Systems Design and Technology and an MBA from Sam Houston State University, a BBA in Accounting from the University of Texas at Austin, and industry certifications including CHAE, CHE, CHIA, and CAHTA. She is a frequent author and speaker at hospitality industry events.
