The ‘open secret’ chart to successful
management.
The secret to successful management is to have a long term plan and
strategy, but always be monitoring the market and competition for new trends
and be able to adapt quickly.
The one does not go against the other but rather the two complement each
other.
The first, setting a long term plan for improvement in operations,
allows both owners and operators to gauge the success of improvements in the
many areas of the plan. This will invariably be in ADR increases, successful
transfer to higher yielding traffic segments. Less dependency on OTA’s, expense
savings in HR, efficiencies in HLP, guest satisfaction, maintenance and many
more are reflected in the plan.
Monthly results reflect the success or failure to reach goals, and
benchmarking allows for continuous comparisons. Financial result reports and
monthly meetings to discuss the result for the past month, the year to date and
forecast results will do much to keep the management team focused.
Of course this is easier said than done in many cases, as it does depend
on implementing new systems and reports, and adherence to in depth audits and
discussions on the plan.
With clear direction and understanding of the ownership vision and the
goals, management can implement the plan successfully and it will lead to improved
profits and ROI.
And yet many properties and operators do not follow their own plans and
targets but surrender to panic action that inevitably lead to worsening results
and in some cases disaster. The OTA’s are smiling. They are usually the first
pillar that operators clutch in the effort to get higher occupancies. Sure,
revenues increase but the costs are much higher and the profits lower. Wear and
tear also come together with the increased traffic, much of it perhaps from
clients that do not take as much care of the property as others.
In other cases ‘free’ add-ons are the practice, giving away free or
reduced food and beverage, free third or fourth nights, free amenities and
more, all in the scramble to ‘outgun’ the competition. Then comes the HR
squeeze, less employees, less service. Perhaps save some expenses on the
landscaping and outdoor upkeep? That will make the arrival experience less
impressive for sure. Cut down on portion sizes? Increase prices in the bar and
restaurant? Smaller soap bars in the room? Increase parking rates?
The next thing to go is the planned small renovations in the rooms and
public areas. They can wait an extra year while the revenue increases from the
OTA’s………….NO, I don’t think so.
How many hotels have you visited or read about on Trip Advisor that
sound like the one I have described? A lot!
Why? Because they did not have a plan, did not create a strategy and
adhere I to it, creating a solid base on which to build a better, more
profitable operation.
The clients of today, especially the millennials, are looking beyond the
simple rate factor. They surely want value for their money, but they are
looking for an experience when they stay. They are looking for a hotel that
cares not just about the rate but is part of the community and involved in it.
They are looking for a well kept hotel, clean and hygienic, and a place that
they feel comfortable in, and a place that means something.
The independent operator today has to be much cleverer, redefine
himself, and even reinvent himself to stay alive in the competitive field. While
creativeness and trends are to be adopted when good, a long term plan and
correct strategy are the right way to go about surviving and thriving in today’s’
cutthroat world.
