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Part II – How Hotel Owners and GMs Can Change ‘The Top 10 Reasons Why Hotels Underperform’
By Tom Costello
In Part I, I covered the first five reasons why hotels underperform in response to what hospitality professionals felt were the top 10 reasons why hotels underperform.
Now let’s look at reasons six through 10
#6 – Poor housekeeping and lack of renovation facilities
I am confident that you understand the impact that TripAdvisor’s Dirtiest Hotels List can have on a hotel. This kind of press will sink your ship and no matter how much the hotels on this list attempt to defend their hotel’s reputation, they’ve suffered certain irreparable damage.
As hotel bookings and prices begin to climb, many hotels are considering renovations they postponed when money was tight. “Next year is going to be crunch time,” said Joel Ross, principal of the hotel investment company Citadel Realty Advisors, because improvement projects “are way past due and people still don’t have money.”
If you can afford to renovate, start with the portion of your hotel that is in dire need of a refurbishment. If your lobby is falling apart, concentrate the first part of your renovation on this section of your hotel. If your guest rooms are tired and worn out, go with this next. However, if no one area stands out as needing a renovation much more than another area, examine the positioning of your hotel, what kind of business you compete for, and where you make your money from on a regular basis.
#7 – Too much time pushing paperwork and not enough time with guests
Hotel GMs are celebrities in their own right whether they like it or not. They are the CEOs of their hotel and guests love to rub elbows with the man or women in charge.
But do hotel GMs feel the same?
One of my divisions brings meeting and conferences to hotels and I typically interact with a Director of Sales and Marketing. That’s a given but I haven’t been introduced to or thanked by a GM for bringing a potential piece of business to his/her hotel since 2010.
When I was a kid I wrote a letter to then President Reagan about a conversation I had with my Dad about the state of the economy. A few weeks later President Reagan (most likely a staffer from communications) sent me a response and that simple gesture ended up in a picture frame that proudly hangs in my office today.
If you want to make a lasting impression on your guests, one that you couldn’t afford to buy, step out of your office when you feel the need to regroup and thank them for their business. Your kind words will generate a mountain of positive word-of-mouth that will only cost you a few minutes of your time.
#8 – Lack of pragmatic revenue goals and misusing budget and P&L
It is a challenge, to say the least, to predict annual revenues precisely but it’s imperative for hotels to maximize hotel revenue and profit in order to create realistic revenue budgets and goals.
According to Patrick Landman with Xotels, hotels should become more business minded. “Too often General Managers still influence the strategic decision making process of hotels based on feeling, market knowledge, and ‘experience’.
Bonnie Buckhiester, Principal of Buckheister Management USA Inc., believes that hotels need to move toward a ‘total revenue management structure’ that includes everything from the job description of a revenue manager to the structure of a financial statement.
Here are some of the characteristics of a Total RM effort and the extent to which hotels are incorporating these practices into their overall revenue management programs:
If any hotel is going to move to the very highest level in its revenue management effort, these types of initiatives must be considered. Regardless of the point at which your hotel may be in starting down the road to Total RM, it will take serious commitment to finish the journey and benefit from a more sophisticated approach to profit optimization.
#9 – Little or no involvement in online reputation management
When it comes to building positive awareness about your hotel, it takes a lot of time and effort to build and maintain your online reputation and that starts at the property level.
So what is online reputation management (ORM) and why is it so important? Wikipedia defines online reputation management as “the practice of monitoring the Internet reputation of a person, brand or business, with the goal of suppressing negative mentions entirely, or pushing them lower on search engine results pages to decrease their visibility”.
The days of measuring customer satisfaction via the traditional hotel comment card are long gone. Reviews are now online and there for the public to see, as are quality ratings. Moreover, research demonstrates that travelers are seeking out hotel reviews and consider the online review a vital decision-making component for their future travel plans. Consider the following:
Adele Gutman, VP of Sales and Marketing with Library Hotel Collection (formerly HK Hotels), shares these online reputation management takeaways:
BTW Adele and her staff don’t pay lip service to customer service. Three of Library Collection’s four hotels rank #1, #2, and #5 of hotels located in New York City on TripAdvisor.
Ignoring your online reputation, or responding inappropriately to comments, can have a negative effect on your hotel’s branding, which can then be detrimental to its overall revenue. This is especially true if negative reviews dominate the search engine results. There is, however, an upside to this. Traditionally, happy guests are the best source of new/referral business, and online forums are the new and more powerful word-of-mouth.
So here are just some of the ORM tools currently available that will help you to manage your online reputation effectively.
TrustYou/Review Analyst monitors Online Travel Agencies (OTAs), Review Sites, and major Social Venues such as Twitter, Facebook, YouTube, Flickr, FourSquare, and more.
Revinate is an easy-to-use software service that tames and demystifies the all-important realm of social media, giving employees the chance to both turn individual disappointment into delight and make operational improvements that increase loyalty and drive sales.
ReviewPro offers a web-based, analytical tool that allows hotels to efficiently aggregate, organize and manage their online reputation and presence in leading social media sites and provides analysis, business intelligence, competitive benchmarking and reporting needed to help hoteliers effectively manage their property.
#10 – Inferior superiors in key positions
Where do you start and what’s the solution? Does it go back to poor hiring practices? The need for a hotel to fill a position quickly? Less qualified pool of candidates?
Chris Rickborn, is the COO and co-founder of Unrabble, a cloud-computing hiring software company that helps busy startups make great hires and his five tips may be just the solutions you are looking for.
About the Author
Tom Costello is a Partner & Co-Founder of Groups International, a company that provides marketing, consultative services, and technology solutions to the group and leisure travel markets. Connect with him on LinkedIn, Facebook, and Twitter or contact him by email.
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