Summer Draws to a Close

Well, the kids are going back to school, which, for all intents and purposes, spells the end of the summer, or certainly as determined by most Hoteliers.

Once the kiddies go back to school, the likelihood of “summer vacationers” is no longer anything but a memory, and a time to take stock of how the season has gone.

What’s the verdict?

Not good.

At the beginning of the year, as has been in case in far too many years, the Hoteliers in Canada were all wondering about, and secretly hoping and praying for the same thing.  Please oh please, let the leisure business return this year.

Were their prayers answers?  Their hopes fulfilled? 

Nope.

I’ve spent the last several days talking with most of the Hoteliers in this city, and the verdict is in.  The leisure business did NOT return this year, as was hoped.

I can’t say that I was surprised to hear what I did.  I’m in and out of many of the downtown Hotels every week, and what I can usually immediately sense on my own, is further validated when I talk to the front line employees, the guest agents, bellmen and doormen.  They are only too willing to confirm how much slower their Hotels have been than in past summers.

Sure, there are more city-wide conventions this year, and corporate travel is rebounding, to a degree.  Airline crews can be seen in many of the Hotel lobbies checking in or checking out on a regular basis, but none of this replaces what has traditionally been the bread and butter in the Hotel business – the summer leisure traveller.

Ah, the summer leisure traveller.  They pay higher rates, they spend more and they traditionally have a longer average length of stay – just some of the reasons that we love them, and miss them so much.

There are a lot of things that need to happen, to create the “perfect storm”, for leisure travel to return to where it used to be, and I, for one, am not sure that we will see the perfect storm come together for the major Canadian cities for at least the next several years, if ever again.

The problem is, Hoteliers are slow to react, and this has not served them well in the past.

Hoteliers need to realize that the business model has changed FOREVER, and the sooner they understand that, the sooner they may be willing to take a new approach.  To really think out of the box, (and yes, I know how over-used that expression is).

The whole situation can be boiled down to that old expression; “if you always do what you’ve always done, you’ll always get what you’ve always gotten.”

I have an expression of my own, and I know that it has annoyed some of my co-workers at times, when they have been facing challenges, but, it’s true. 

“If it was easy, anyone could do it.”

And being a leader isn’t easy.

It’s time to do something different, and create something new as a result.

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It's Raining - It's Pouring . . .

It rained here the other day – more accurately, it poured.

First time it rained here, with the exception of a brief wisp of a shower, probably for 30 days, maybe longer.  The streets were converted to a series of ponds and streams and even the sidewalks were treacherous if you weren’t paying attention.

I went, as I do every day, for my run first thing in the morning – 10K, rain or shine, snow, you name it, I run in it.

I was about mid-point through my run and I stopped for a traffic light.  Needless to say, I was soaked from head to toe, rain running off of my baseball cap, standing there in the pouring rain. 

I looked up to catch the eyes of a woman in her SUV.  She was looking quite warm and comfortable in her big SUV, but it was the look on her face that captured my attention, and I realized that I had become “that guy.”

I can clearly remember before I became a runner, which was about 7 years ago now, driving passed people out running in the rain or the snow and thinking, “what is that idiot thinking?”  “Was he (or she) not paying attention when their Mother first questioned them, when they were little, happily out playing in the rain, with the invariable question; “do you not have enough sense to know when to come in from the rain?” 

Apparently not.

But somewhere along the way, not recognizing it when it happened, I became addicted to running.  As I said, I run EVERY day, and if for some reason I cannot run, I feel like something is missing from my day, and I know what it is.

When I travel, for pleasure, I love to get up in the morning and go for a run first thing in the morning.  I use it in some cases to explore a new city, setting out in a different direction every day, discovering new areas, running passed that unique place that I find quite by accident, spotting a restaurant that I want to return to for dinner that evening.

But I also run when I’m on holiday so I can do what I really enjoy doing when on holiday – eating.  I love to explore the area restaurants and cafes and to enjoy the regions' cuisine.  And when appropriate, accompany that great meal with a nice glass of wine or beer.  I’m not that guy eating 3 leafs of lettuce and a carrot stick to stay in shape.  No way, not me.

On a trip to the South of France a couple of years ago, we ate our way through the many quaint little cities and villages throughout the area, and we spent 5 days in Paris, doing much of the same.

When we returned home, I actually found that I had lost 5 pounds.  Who does that while on vacation?

When I travel for business, I count on my run first thing in the morning.  It energizes me for what the day has in store for me.  And I prefer to run outside, wherever possible, regardless of the challenges that can involve.

However, that’s not always possible, which is why ANY and EVERY respectable Hotel should have a well-appointed Health Club – not some converted guestroom where they have thrown a treadmill and a bike.

To that point, imagine my disappointment when, on a trip to Seattle last year, I stayed at a very recently renovated, 1,500 room, 4 diamond property, that had just spent over $80 million on renovations and when I went to the Health Club what did I find, keeping in mind once again that this is a 1,500 room Hotel?

3 treadmills, 1 of which was out of order, 2 stationary bikes, 1 stair-master, 1 universal gym apparatus, a handful of free-weights, a couple of floor mats and a weigh scale.  HELLO !! 

I could not fathom that here we were in 2009, and there are still some Hoteliers that think fitness is some short-term fad, not to be taken seriously.

I don’t think it is universally understood that there are those of us who find this unacceptable, and, who will base their Hotel choice on, among other things, the ability to maintain their fitness routine while they are away. 

Do you have any idea how frustrating it is when you get up early in the morning to go and work out before your meeting, presentation, etc., only to find that the Health Club is ill-equipped, and, full when you arrive there at 6am when it opens?

Trust me when I tell you, we are not happy campers when this happens, and it happens ALL THE TIME in your Hotels, every day.  And most of the time, we don’t bother to complain; we just go stay somewhere else next time.

This is not a fad people, this is a life style choice, and it gains momentum every year, so if you do not as yet have a decent Health Club, for the size and level of Hotel that you are operating, put one in, better than your competitors and market it as a distinct point of differentiation.

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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.

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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.”

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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.

Why?

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?

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.

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.

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