What is it about ‘Penny wise and Pound foolish’ that is so attractive to independent hospitality property owners and operators?

Stephen W. Ayers, CEO STAY Ahead Hospitality

‘Penny wise, pound foolish’ has long been of deep interest to me, and something I have tried to avoid throughout my career, ever since working as a cook in Lausanne during my ‘stage’ from the hotel school there. I was lucky, I learned early.

I was working at a small restaurant in Pully in the suburbs. The Executive Chef, in those days known simply as ‘Chef’, was a German with the ‘Maitrise Federale’, the highest certification in Switzerland at the time. I learned so much from him about cooking and how to do it right, but I learned one huge lesson from the owners about how to do things wrong. It was a glaring example of ‘penny wise, pound foolish’, or should I say ‘Centime wise, Franc foolish’?

The restaurant was relatively successful and the food was really good (how could I say otherwise as one of the cooks!). Dinnertime was usually packed and lunchtimes sufficient to carry their weight.

The standout thing about lunch was that every day during the week, and elderly couple came in to have lunch, as they had done for a couple of years before I joined the ‘brigade’. EVERY DAY! Think about that for a minute. They spent many, many hundreds of francs if not thousands during what must have been at least two hundred days worth of lunches at our restaurant. Now that is the definition of returning guests!

One day the husband caught a mistake on the bill, something he had not been satisfied with and requested that five Francs be taken off the total.

“You ordered it and you will pay for it’ was the owners’ answer. The gentleman did not argue too much, kept calm and paid the bill in its entirety.

They then walked out and were never seen again at the restaurant.

Talk about penny wise pound foolish!

Thinking about today, and not only because I offer professional help to hotels, the saying is so much more pertinent than ever before.

Many independent owners and operators of restaurants and hotels are caught between a rock and a hard place. The huge, powerful brands are buying up hotels like never before. The OTA’s are taking more and more rooms at discounted prices and large commissions. Expenses are going up and encroaching on profit lines. Competition is growing with every hotel built, every restaurant opened.

It seems that it is no longer just good enough to keep your place clean and well maintained. It is no longer enough to offer good facilities and reasonable food. Offering more and more ‘value’ for money is not the answer any more. Sitting back and being satisfied by surrendering more rooms to the OTA’s is not the answer either, though it may give that sense of ‘security’ for a short while until the damage is understood.

Today the largest consumer group is the Millennial generation, and their needs and expectations are radically different than those of the generations that came before. They live to spend. They want to see and feel more ‘values’ in their purchase. They want a different experience at the restaurants and hotels they go to. Sure, they want what was on offer to their parents, but they want so much more than that.

So, if restaurants and hotels want to carry on thriving in the future, they need to invest in learning how to adapt to the new reality. Investing can mean investing money in projects to differentiate the property, it can mean a makeover in identity to be able to lower the OTA chunk of business, and it must mean a different staff culture than in days past. The latter two do not entail huge funds, but rather a change of ‘attitude and beliefs’.

I firmly believe that if hotels do not change and adapt to the new needs and expectations of not only the ‘new’ guests but also their own staff, they will be endangering their future as a viable business.

There is great, professional help out there for independents; it is just the will to connect and invest that is lacking. Some of the adapting costs little or nothing, and some can be done with careful, clever planning. If help is offered for free it is suspicious. If help is charged for it is an expense to be saved. Why is that?

There is no shame in sourcing professional, expert help and investing in your staff! It could make the difference.

So I ask: Is it wise to be ‘A few thousand dollars wise, your future foolish’?

Stephen W. Ayers is the founder of STAY Ahead Hospitality, and one of the creators of ‘The meaningful seminar series’.