I thought I’d take this opportunity to start a discussion on Hotel Performance or better yet under-performance!

As owners and GMs alike know, it’s all about that bottom-line. It’s that deadly “tug of war” between operators pushing for the “top line” in the hopes of being able to spend more in order to drive revenues and owners pushing for the “bottom line”, squeezing every penny possible through minimizing spending and capital improvements investments as much as possible.

One of the key performance metrics that I enjoy using, and it applies to hotels, restaurants, clubs and any business for that matter, is a concept developed and perfected by the Ritz-Carlton Hotel Company –  the Net Flow-Through!  Namely, how much of your top-line dollars, above and beyond what was budgeted, find their way to the bottom line. Owners want 100% and then some, operators would be ecstatic with 30% – 50%, but sadly enough,  if less than 80% of that makes it to the bottom line, you’re doing something wrong.

So coming back to why some hotels outperform and others under-perform? Well, in no particular order, here we go:

1. Marketing strategies across all media channels: print, social, media, in-person, etc. Marketing is not a one-time thing; it’s continuous!  As you may know, it takes 6 months or more of weekly media ads before they start making a measurable impact.

2. Customer/client resolution: how does the staff react to complaints?  How does management react? Are complaints treated with the highest priority?  Are they being viewed as opportunities rather than problems?  I learned a long time ago from one of my mentors, to treat every complaint as an opportunity to do something better and mistakes are good as long as you don’t repeat them.

3. Micro-Management.  If you take a look at organizations that have a culture of micro-management, of mistrusting the staff versus companies that empower their staff to make the right decisions to satisfy the customer, simply do your own research, and tell me, which organizations perform better than the others?

4. Hiring and Training. I know it’s an overused statement, but you are “only as strong as your weakest link”. While H/R has its functions, while department heads are empowered to hire the best candidates for their teams, how often does the GM interview new staff? Never! How could I even say such a thing, you say? “I manage a 600 room hotel, I have 250+ staff members, and you want me to interview every one of them?  You’re nuts!”  I’ve been told that more than once.

Don’t get me wrong, I am not suggesting the GM should interview every employee for 30-minutes, but a quick 1-5 minute meet-up will make all the difference. Oh! And by the way, who should conduct Staff Orientation? H/R or the G/M or both? Depending on how you answer this question you know if you have a property that performs or underperforms. Lastly, when selecting candidates, please remember that skills can always be taught but, talents are unique and what truly makes the biggest difference!

5. Cleanliness!  Housekeeping is everyone’s job!  If you don’t have that culture in place, good luck!

6. Financials!  Know your metrics!  GMs should never hate the Asset Manager (representing the owner)… they should be the Asset Manager!

7. Management By Walking Around (MBWA).  This is the key to success! Your staff need to know that you can do their job, that you can help them at any point and that you are shoulder to shoulder with them in the trenches and that you do have their back! Your guests, members, customers need to know who you are and what you can do for them.

I could go on and on, but I won’t. These 7 points should get one started on the right path. Oh, and one last thing: You’re never too big to do the smallest thing!

At Your Service,
Aurelian