Monday, August 30, 2010

Is There Still Room at the Top?

I live in Vancouver, B.C., North Vancouver actually, but that’s not the point.
Earlier this year, a new Fairmont property opened up in the thriving and highly competitive downtown core of Vancouver. 
I toured the property just after it opened and I have since attended several functions there, and the property is, beautiful – no argument, and Fairmont says that they are going after a rating of 5 diamonds for the Hotel.
What I’m wondering is whether there is room at the top, at least in this market, if not elsewhere, for 5 diamond properties, in this economy?
A spectacular Shangri La property opened here as well, a year earlier, and, not surprisingly, they too said that they were going to be pursuing 5 diamond status.  By all appearances, the property is certainly worthy of consideration.
Interestingly though, the property has struggled since opening, when, they were determined to hold out for the average rates that they should be generating for a property at that level.  But then came the inevitable challenges from what was deemed as excessive staffing for the low occupancy that they were generating. 
Now what?
Reduce the staffing levels and you risk your run for the 5 diamonds, and, you are also no longer providing the level of service to the customers that are coming, and paying the rate, with the anticipation of a certain level of service associated with that rate, and the distinction of 5 diamonds.
Enter the new challenger into the market.
Ironically, both the Shangri La and the new Fairmont Pacific Rim are in fact owned by the same group.  Do they know something that we don’t?  Or, as I suspect is the case, is the business case made on the strength of the high-end condos built into each of the projects?  (Of course it is).
Regardless, it still begs the question, is there room for 5 diamond properties, in this economy?
I suspect the answer is less about the status of being a 5 diamond property and a good deal more about how either or both of these properties will be operated, regardless of whether they are 4 or 5 diamond Hotels.
Arguably, Fairmont has the greater challenge now that they have 3 large and distinctly different and unique properties in the downtown core of Vancouver, and in fact within only a few blocks of each other.
I assume what will happen, is what happens every time the market shifts based on a struggling economy.  The 5 diamond Hotels will slash their rates, stealing business from the 4 diamond Hotels, and in turn the 4 diamond Hotels will slash their rates to the level of the 3 diamond Hotels, stealing their business, and as usual, those that will suffer the most are those at the lower end of the (Hotel) food chain.
The Hoteliers at the top of the food chain always say that they will NOT lower their rates, run ridiculously low rated specials and packages, and/or include significant food and beverage credits included in their rates, but, when the you know what hits the fan all bets are off.
And in this economy, the you know what is already hitting the fan, and it is likely to continue to do so for some time.
Owners are focused on the bottom line, period, and they are not going to sit on their hands while a General Manager or Corporate Executive tries to tell them how fabulous it will be if they garner 5 diamond status for their Hotel, not if it means excessively high labour costs, and dwindling returns.  It just aint gonna happen.
So what’s the morale of our story?
When the going gets tough, the lines between 5, 4, 3, and even 2 diamond properties in some cases, become very blurred, and at the end of the day, there is only 1 playing field, and you’re all on it, at the same time, so don’t be naive.
Want to win the game?  Then play it better (smarter) than the other guy.

Need an experienced hospitality professional to help your property reach its full potential?  Contact me.
New to this Blog?  Click here to subscribe by email and never miss another post.            

Friday, August 27, 2010

It's Rough Out There

No one would argue that this is a tough job market. 
Business (in Canada anyway) has rebounded to a degree, although there is still a long way to go to get back to the level of business that we had a couple of years ago.
We have begun to turn a corner, but it’s a BIG corner and it’s going to take a while to navigate our away around.
In the meantime, Hotels have cut back on management and supervisory positions.  Well, actually, they made these cuts over a year ago – now it is more the case that they are continuing to operate at these levels, rather than return to the levels of management and supervisory staff that they had in place a year or maybe two ago.
So, how does this translate in the real world?
More experienced, skilled managers and supervisors out there looking for work, and, ultimately more qualified candidates competing for fewer positions when a position does come up.
Ironic isn’t it?  Just a year or two ago every Hotelier that I know was worried about how they were possibly going to find enough employees to keep their Hotels staffed.  There were positions posted everywhere, and far too few qualified, experienced candidates out there to fill the void on the line.  Some positions remained posted for weeks and months.
Now, the tables have turned and it is once again a situation of too many candidates for too few jobs.  Hoteliers will be rejoicing.
While I am genuinely happy for my colleagues, once again able to sift through multiple candidates until they find the best of the best to fill the occasional position, I would also like each of them to experience what it is to be unemployed in a market like this.
Perhaps then, they would have an understanding of what people are going through, “out on the street,” and take that into account when they determine how to treat candidates who apply for positions in their respective Hotels.
Perhaps even more to the point, how is it that Human Resource Managers, people hired with the sole purpose of successfully managing people, and, ensuring that their companies treat employees properly, do not see the value of treating people properly BEFORE they are hired?
When did it become too onerous a task to email a candidate to let them know how the process is progressing, or, to return their call with the same purpose?
How can you treat people in one way, only to tell them, once they are hired, if they are lucky enough to be hired, how you value people and how your company respects their team members?
Is the hypocrisy of this situation rather obvious?
I’ve been unemployed before, and on one occasion, as I was going through the recruitment process with a particular company, I made a conscious decision NOT to accept their offer when it eventually came, because I had been so unimpressed with the totally unprofessional way that they handled the recruitment for that position, I no longer wanted to work for them.
In a business that is “all about relationships” in my opinion, I simply could not get passed the fact that the people that I had been in contact with seemed to have no respect for people, no idea how to treat people and to reinforce the values that they espoused.
It reminds me of a quote that I like.  “People don’t care how much you know until they know how much you care.”

Need an experienced hospitality professional to help your property reach its full potential?  Contact me.
New to this Blog?  Click here to subscribe by email and never miss another post.            

Wednesday, August 25, 2010

The Right Market Mix - Pure Gold

Can enough really be said about the need for the “right” market mix in a successful Hotel?
It’s a trick question, or I guess, more accurately, a rhetorical question, because as far as I’m concerned the right market mix is critical to prolonged success, and I don’t personally believe that enough Hoteliers focus on this to the extent that they should.
Not only is the right market mix key to prolonged success, but if done correctly it is also a preventative measure to protect you from sudden and significant shifts in the market.
As a point of example, when I was in Victoria for a time, there was a Hotel that was very heavily into the Japanese Tour market, almost to the exclusion of every other market.
What’s more, they were ignoring other lucrative markets, especially during the high demand periods when the Japanese buses were anxiously lined up to get in their driveway.
Granted, the average rate that they were getting at the time for this business was very high, but at the Hotel that I was managing at the time, which was also in the Japanese Tour business, we were getting equally high rates for that business, but, we were also getting similar rates from other markets during the same time, balancing our commitment.
Further, we actually turned down some of the Japanese Tour business at the time, because we did NOT want to be so dominated in any one market as to lose our competitive edge, and, we did NOT want to be in bed with any one client to the extent that they could hold us hostage if they suddenly decided to do so by threatening to pull their business if we did not yield to whatever their particular demand may have been.
And, when the bottom fell out of the Japanese Tour market, that competitive Hotel that I referenced earlier took over a year to recover to any measurable degree, because they had suddenly lost about 60% of their annual business, and they had no idea how to replace it. 
They had been too busy patting themselves on the back for having cornered the market on the golden goose to have ever thought about what would happen if the golden goose ever died, and die it did, big time.
Fortunately for us, we had a very balanced market mix at the time, as had been our strategy.  The Japanese Tour business for us, had represented about 20% of our annual business mix, and we did have a plan for when that market suddenly fell off to the extent that it did.
Because, as a function of the process for completing the annual budget and marketing plan, every year, we would go through several exercises to;
Review our market mix.
Determine what our ideal market mix was.
Identify any gaps between our current market mix and our ideal market mix.
Create an individual plan for each of our key markets to close the gap, and lastly,
Identify shifts in our market mix, or, new markets that we would go after, in the event that any of our current key markets fell off by more than an acceptable percentage.
In short, we had a plan, it was a key priority, and we worked our plan. 
As a result, we were very well prepared for shifts in the market, and we successfully weathered more than a few “storms” over the years.
What about you?  Do you have safeguards in place to protect your Hotel from sudden and unexpected shifts in the market?

Wednesday, August 18, 2010

Hiring For Looks – How Far is Too Far?

I know, it seems that every month or so, someone publishes an article on how “more attractive people” have more successful careers, or something of that nature.

What always mystifies me is why anyone thinks that they need to do research on this? Isn’t it obvious? Haven’t we all been in a room at some point, where someone has been discussing two candidates for a position, and someone has said, “well, this is a difficult decision; Edna and Cindy-Lou are both equally qualified, but Cindy-Lou looks like she stepped off the cover of a magazine.” And guess who got hired? (I’ll give you a hint, it wasn’t Edna).

And just to be clear, I am guilty of having been swayed by someone’s looks in the hiring process as well. I’m no saint. And in our business, I think it is just an honest statement to say that we ALWAYS consider how a person looks when we think about sticking them out in front of our customers.

That doesn’t mean that we don’t hire people that are over-weight or in some other way don’t fit the mould of a typical fashion model, but we do consider how they present themselves as a component of whether or not we want them out there as our first line of defence.

The point of my original question stems from my having just returned from lunch at my local Earl’s Restaurant where I was reminded, with glaring clarity, that they ONLY seem to hire fashion models, as does Joey’s, Cactus Club and Browns Social House.

Don’t misunderstand me, my server was competent as well as exceedingly attractive, but really, where do they possibly find so many women who look almost identical?

It’s like being in the middle of a variation of the Stepford Wives, only this version is the Stepford Servers and they’ve ramped it up a notch to say the least.

What I can’t figure out, is how they get away with hiring only a certain “body type” and then subsequently convincing them to pour themselves into some low cut mini dress and giant high heels?

Or, am I just naïve?

I get it that these restaurants are giving the majority of their patrons exactly what they want, but is the point that I have been missing up til now is that the servers know it too, and what’s more, they’re perfectly fine with it. In fact, they’re delighted by it as well because they are busy, their average check is high, and their tips are extremely high (I have to assume).

This is not the first time that I have wondered about this, but it is the first time that I have realized that I probably have this all wrong. Yes, they are selectively hiring, but is it also that their applicant pool is in fact largely of this nature in the first place?

I mean, it’s not a secret what the servers in these restaurants look like, so maybe, just maybe, some smart and attractive women have been saying to themselves, hey, why wouldn’t I want to work here, be appreciated for how attractive I am, use that to my benefit, and make ten times what I would if I took the “high road”, wore my turtle neck, my floor length skirt, my flats and worked at Red Lobster.

Maybe, as has been the case in other instances, we’re trying to “rescue” people who don’t need or want to be rescued, but who instead, know exactly what they’re doing. They’re working the system to their benefit, thanks very much, now go save someone else.

Sunday, August 15, 2010

Revenue Management

I was recently asked to consider teaching a course in Revenue Management and it got me thinking about the topic, obviously, as well as the “state of the union” as it exists today.
I consider revenue management to be akin to a great game of chess, only in this case, you are playing simultaneously against multiple opponents, and as far as I’m concerned, that just makes the game more fun.
It’s also a game that I have always enjoyed playing. One of the nicest compliments I ever received was from another General Manager in a particular city, who, upon hearing that I was relocating to another city, said; “Thank God, now I can get some of my market share back.”
My relationship with my Revenue Manager is always very strong, and always a top priority. I believe that regardless of how strong your Director of Sales & Marketing is, and maybe in spite of that, the Revenue Manager should report directly to the General Manager.
How else can they do their job as effectively as we demand of them?
The job of the Revenue Manager ultimately comes down to having “the right guest in the right room at the right price (on the right day).”
That’s no easy task, at any time, and it is certainly made more difficult if the Director of Sales is breathing down their neck to take a piece of business that the Revenue Manager believes is NOT in the best interest of the Hotel.
I have had to “mediate” on a number of occasions over the years when the Revenue Manager and the DOS were at odds, and both of them had dug in their heels with respect to their respective positions, but, that is the job of the General Manager.
Conversely, I have inherited situations where the Revenue Manager reported to the DOS and I would be reviewing a booking recap, spot a questionable piece of business, ask the Revenue Manager what they were thinking in taking this piece of business, only to have them look back at me and say; “I told the DOS I didn’t think that we should take it, but she said to do so anyway.”
Ultimately, one of the most important jobs of a General Manager is to ensure the best possible returns for the company and the Owner, and you can’t do that as effectively as you should be if you are not in the drivers’ seat when it comes to making significant revenue decisions.
Bottom line: If we don’t take responsibility for generating maximum revenue, which in turn should generate maximum returns for our stakeholders, then it’s time to turn in the keys.
Need an experienced hospitality professional to help your property reach its full potential?  Contact me.
New to this Blog?  Click here to subscribe by email and never miss another post.            

Wednesday, August 11, 2010

Must Love Dogs

Is it just me, or has anyone else noticed that every second person these days has a dog.

Don’t get me wrong now – I love dogs, I had dogs most of my life, and if my circumstances were different right now, I’d probably have a dog.

It’s just that somewhere in the last few years, well more than the last few years, but on an escalating basis, it got “cool” to have a dog.

Not only that, but it got socially acceptable to build special bike carriers for your dog, carry bags for the little ones, and biker outfits.

I think that is probably the biggest irony, seeing these big, tough looking biker dudes, with their little dog strapped to their chest, and they don’t care who sees it. Previously, they would have been ridiculed, now, as they ride by you hear all these people commenting on how “cute” it is. When did we start describing bikers as cute?

I have some first-hand experience in this. My brother is a farmer/rancher/biker type, and he has a little dog, and yes, he straps it in the equivalent of a front harness baby carrier, slips a pair of goggles on it, and they jump on his Harley and take off. He does it all the time, and the dog apparently loves it.

The attachment that people have to their dogs is not new, and its impact on the Hotel business is likewise not a new phenomenon.

I think I can honestly say that I was one of the early supporters of “pet programs” that encouraged people to bring their dogs along on their stay, where we would do different special things to make their pets feel special.

At one point, when I worked at a resort property in the Rocky Mountains, where we had a VERY popular Christmas package, we developed a component for people’s dogs. That year, out of 321 rooms, running at 100% occupancy, we had 100 dogs in house. Yup, 100. You should have seen the place in the morning when people were out walking their dogs, it was amazing, and the people loved it.

They were going to go somewhere that accepted their “extended family” and I was determined to capitalize on that fact.

The dog ratio wasn’t always that high, but the inclusion of peoples’ dogs continued to be a very successful package for that property.

It’s not enough though to just say that you “accept pets” these days. You need to do something special and different to attract those pet owners, who I might add, are more than willing to shell out some extra dough to take Rover or Daisy along with them on their holiday.

Have some fun with it, get your staff involved who have dogs. Ask them what they suggest that you do, and , get their help to pick out the different items that you decide to include in your “pet package.”

Sunday, August 8, 2010

The Power of the Web Site – What is Yours Saying?

I probably spend more time than most people critiquing the various components that Hotels produce to promote their product.

So it’s probably not a huge surprise to anyone who knows me, or has come to read by Blog from time to time, that I would have an opinion on promotional materials.

In fact, the people who know me well would say that one of the things that they have probably learned from me is to ALWAYS proof your work, and no, that doesn’t mean spell check.

Far too many people assume that if spell check thinks their document is fine, well, then it must be fine. Unfortunately, spell check doesn’t know if you used the word correctly, or, if you omitted a word entirely, it just knows whether or not they’re spelled correctly.

That is little consolation in my opinion for when someone goes to your web site and it’s a hodgepodge of obviously inappropriate grammar, unfinished sentences and typos.

This is your brand people, this is a reflection of you, and what is it telling us?

It’s telling us that you don’t have an eye for details, that the term “attention to detail” does not have the same meaning to you that it does to the reader, and that is a dangerous message to send.

I don’t know about you, but I want people organizing my meeting or conference who prioritize every single detail and recognize that it is in taking care of the little things that the seemingly bigger things are accomplished.

I know I’m preaching and that’s never a good idea, but at the risk of repeating myself, this is your brand, your reputation, your integrity, so take the time to check out your web site, or, find a freak in your business, like I am, that takes pride in finding and correcting those typos.

Yes, it’s mundane, but it’s important.

And if you think it isn’t that important, ask your friends what they think when they go to plan a holiday, or make a significant purchase on-line, and they go to a web site and encounter the kinds of things that I have talked about here.

Ask them how anxious they are to do business with that company, or, as I suspect they do at times, ask them if in fact they went and looked for another supplier, and went with that company?

The web has become the first point of contact for many people, the first impression, and we all know, you don’t get a second chance to make a first impression.