The end of the year is upon us and it seems that just yesterday we were all scrambling to figure out what we could do to save our respective business from going under. I am not just referring to the hospitality industry I am referring to all of the business that suffered, and those that lost it all. There is still fallout to this day of the last two and half years of bad business, as well as bad business decisions. What are we as business partners going to do to fix these problems?
I will direct the attention to the hospitality sector for I am most familiar with it.
It seems that the hospitality business has resurrected in Asia and China, these areas are doing quite well. It is a boom for them at this time and all of the big chains are rushing to open, or build hotels there. Can this bubble last long enough to get a return on investment? Time will tell, now lets look at the USAwhere there are still areas that have not recovered from the fall out. There are properties in the mid west that are well below the national average as far as profit margin is concerned.
Thousands of people have lost their jobs, jobs that will not be coming back at all. Businesses have learned to survive without them, they will not add more employees to their payroll, even though business will improve. It is surprising what you can do with less when you are confronted with a vast reduction in funds. In certain cases vendors and consultants have had to lower fees just to stay in business, and it will become difficult for them to suddenly raise prices, when they have been charging less for the same product. Reducing prices in the hotel sector, especially room does not attract more business, this type of fire sale does not work, and I believe most hoteliers have learned the hard way on this costly lesson. The first of the year most properties will be looking to sit down and form some sort of a forecast for the following year, some will do it right other will fail, and fail badly.
The forecasting modules have gotten very technical and difficult to read at best. There is quite a bit of software on the market that produce algorithms which will boggle the mind. Now imagine the owner that does not understand all of these new high tech software that can increase revenue 12 to 15% in any given year. We are looking at a great deal of money here. In order to produce these results, your team must be on the cutting edge if they are to meet this goal. In the past year there has been a shift in the hospitality industry as far as what type of person is now needed at the helm of the property. The old time General Manager is no longer viable, the knowledge is outdated, and the methods are antiquated. The new generation of hoteliers are tech savvy and ready to run with the knowledge, however for all of the knowledge they may have, they suffer badly in the commonsense, and customer service sector. Hospitality used to be about the guest, it is now about the bottom line at the expense of the guest. Correct me if you feel that I am blowing smoke. I have seen good properties fall by the wayside when it was not necessary, Owner as well as managers did not have the sufficient knowledge to sustain the wave of economic downturn. Some were swept under like a tsunami. This year it is time to rise and get your fifteen minutes of fame, rise to the occasion and grab the wheel and drive your revenue where it should be. If you aren't able to do this, retire, or find some other type of work. These are my thought for 2013 for what it is worth.
About the Author
Alan Campbell has been in Las Vegas for over 30 years and has worked for the major strip hotels. He has spent some time in California, Los Angeles where he worked for the Radisson and Sheraton hotels. Alan considers the hospitality industry the best job in the world - it is the only place that both king's and Paupers will visit you.