Reality Checks in Hospitality- Myth or Fact? |
By Dr. John Hogan CHA CHE CMHS CHO
During the past 25 years in workshops and presentations, I have been collecting “myths” that many of us have held as self-evident truths. I have shared some in earlier columns, but this list is more comprehensive.
The great enemy of the truth is very often not the lie — deliberate, contrived and dishonest — but the myth — persistent, persuasive and unrealistic – John F. Kennedy
Judge for yourself the depth of these following items, and decide for yourself if you agree with my assessment whether they are “myths or facts”:
1. The Myth: that consumers will value only “new and shiny” and that they will pay whatever price is charged. The Fact: There is no doubt that while some “new” is appreciated, value has replaced new for the sake of new. Many third party web sites have tried to accelerate our industry into a price driven commodity. The success of a hotel is not guaranteed by its age, but by the consistency of product and services delivered at a fair rate.
2. The Myth that a franchise or brand will or should guarantee success. The Fact: More than 50% of the hotels/inns in the United States were unable to meet operational and/or debt service in the early 1990s, regardless of affiliation. The number of foreclosures is down with the last recession, but there are still many underperforming branded hotels. Stanley Turkel has been tracking the numbers and he estimates almost 200 new brands that have been launched in the past two years alone. A franchise may help with lender financing but it will not assure success.
3. The Myth that technology alone will enable us to improve our margins and capture more market share. The Fact: The hospitality industry has always been (and should remain) a “high touch” business. High-speed Internet access, WIFI, the latest in cable and communication offerings and other high tech features can help in competitive markets, but not replace the people element.
4. The Myth that it is the sole responsibility of the security guard or the local police to keep our hotels “safe.” The Fact: Ask any hotelier who has ever had to give a deposition or defend operational security in court if that myth holds true. The term “reasonable care” means that all of our staff must be attentive and security conscious. Our hotels should not be operated like a bank vault or a prison, but we must remember the world has changed since 9.11 and we must share awareness with our entire staff.
5. The Myth that hotel owners, management companies and lenders have the same goals and priorities. The Fact: While everyone wants the business to succeed, the priorities of success are not often even close. There are overlaps in these stakeholders, but there are clear differences. There is no “bad guy” here, but we need to remember each of our needs. Recognizing these differences as owners and managers can make our lives much simpler.
6. The Myth that the hospitality business is primarily a real estate business. The Fact: The 1986 US tax law changed lodging from an emphasis on real estate to an operational focus in the 1990s. The 2008 global financial meltdown dramatically changed the economic climate . It takes dedicated and perceptive operators to make these hotels successful and financially sound for more than one fiscal quarter or year.
7. The Myth that our quality standards are good, because we passed a franchise and/or local health department inspection. The Fact: Passing those inspections means in most cases that we have met minimum standards for those categories. How many of today’s customers really want the minimum in quality?
8. The Myth that the person(s) charged with the sales function should be able to fill the hotel. The Fact: In the hotels that really succeed, everyone sells! The same philosophy should be true in smaller rooms only hotels as well as full service properties. It is a related Myth that our managers and staff are adequately trained and that our industry or college educated staff have learned enough to make them successful. The related Fact is that most of us in hospitality do not have adequate continuing education. That myth alone is a leading factor in turnover, which is a major expense.
9. The Myth that the GM is responsible for quality. The Fact: At past conventions of many brands, management companies, national and international Associations I have seen presentations from hotels of all sizes who participated with quality teams. Their results were usually of exceeding both occupancy and profitability over hotels that did not make a focused effort – regardless of hotel size, brand or location. The term used is one we are all familiar with – empowerment. It means hiring the right people and then authorizing them to do what we hired them to do
10. The Myth that an expensive renovation, a new flag, or a new manager alone will “save” us and solve all our problems. The Fact: It takes time, focused and planned work to solve our problems and to properly financially position our hotels for the long-term. It takes the right combination of quality product and committed staff to succeed.
11. The Myth:” If what I’m doing today works well or at least OK, I should keep doing it exactly the same forever.” “if we never did things differently, we would never get any other results.” The Fact: Our world is changing so quickly and regularly – we must be pro-active, not always reactive. Inflation and time will not allow us to raise our room rates a certain percentage annually and we must avoid the illogical price war strategies many hotels use as a primary marketing strategy. We should maximize our rates and our revenues by offering the best value in our market.
12. The Myth that we provide sufficient feedback to our staff with regular annual reviews. The Fact: Annual reviews alone are almost worthless. Do we recall the great thing someone did 9 months ago, or the problems of 10 days ago? Quarterly performance appraisals with an annual financial review are worth the effort from renewed enthusiasm to a more focused attention.
13. The Myth that hospitality associations are a needless expense and they are primarily social clubs. The Fact: Some associations were and possibly remain at least partially socially focused. The reality is that most of them are politically astute, in that they are attentive to memberships’ needs in introducing, monitoring or lobbying against legislation that treats the industry unfairly. Most provide ongoing educational and specific membership services.
Our myths and belief in them shape our understanding of our personal and business lives. They describe for us “the way things are.”
Add your own myths to the list………..
We must remember that we must focus on delivering the right services to the right customer at the right price, which means attentiveness to sales and marketing efforts are essential.
Success does not come by accident or chance.
Contact us for assistance.
John.Hogan@HospitalityEducators.com or 602-799-5375
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John Hogan is a successful hospitality executive, educator, author and consultant and is a frequent keynote speaker and seminar leader at many hospitality industry events. He is CEO and Co-Founder of www.HospitalityEducators.com , which delivers focused and affordable counsel in solving specific challenges facing hospitality today.
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