Thinking Strategically in this Recession

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In this time of recession, there has been widespread panic throughout the hotel industry.  With much lower occupancy forecasts, hotel managers have been trying to prepare for 2009 as it seems like it will be a grim year.  But what are some of these managers doing?  Some hotels have been laying off employees to meet the demand, finding any way to cut some costs, and even working hourly shifts themselves to save some money.  But is this really the right way to do things?  We will provide you with a new perspective and maybe you will begin to look at your operations in a new light.  You will find that your job as a manager should mean more than trying to catch up to the present.

If you think about your job description as a manager, what does it contain?  Is it to remedy situations and deal with issues as they arise?  Or is it to strategically plan and steadily improve the hotel as a whole in the long term?  If it was written well, your job description should include a combination of both of these areas.  Unfortunately, at a time of a worsening economy and with the uncertainty of where your next dollar of revenue will come from, it is hard for managers to think of anything else than the short-term.  They begin cutting employee shifts, finding cheaper supplies, and doing anything they can to make that bottom line more attractive.  Though yes, some of the cost-cutting is necessary to meet the lower demands, do the managers have the correct mentality when they are going about these profit-saving measures?  My guess is no.  The managers are usually just thinking, “How can I get this month’s P&L looking good even though we are not getting any business?”  Newsflash!  If you have no revenues, your profit line will not look good no matter what you try to do!

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Simple Guest Service Reminders

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For the new year, resolve to improve guest service throughout your property.  We all know it will be a tough year to hit budgets and to attract more business.  A great, and cheap way to keep the business you already have is to make sure your guest service exceeds standards.  A very simple way to do so is by making sure that your team is trained to say the right things to guests.

At a recent stay at a very fancy and expensive hotel, we ran into many issues.  The issues ranged from very small to a very large one but regardless, it did not seem that the guest service team was properly trained to handle the problems that we encountered.  Though they were able to fix the problems quickly and satisfactorily, the guest service team was not empathetic or even apologetic at all.  This made our mystery shopper feel very unimportant even though we had just paid over $400 for the night.

To see the effect of slight changes in your team’s words on your guest service, please read this article on the Hotel & Motel Management website.

The author, Doug Kennedy, provides great examples of what many of your associates currently say to guests and what they should say instead.  It is a great way to improve your guest service without much cost!  For example, Kennedy points out the dreaded way to greeting a lone-diner at a restaurant with, “Just One?”, making the diner feel even lonelier.    He provides an excellent way to greet those guests by using, “Welcome to the restaurant  are you ready to be seated?”  The author also gives a few other great examples but leaves you to figure out how this concept can be applied to the many other areas of guest contact in your hotels.  It is a great way to keep your current guests happy and have them continue to choose your hotel in the future without spending any money!

WSJ Reports Businesses See Rise In Employee Theft

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WSJ-LogoThe Wall Street Journal posted a great article on the rise of employee theft as a result of the recession.  You can read the entire article on MSN’s Money page here.  The article reports that ‘New research shows that employers are seeing an increase in internal crimes, ranging from fictitious sales transactions and illegal kickbacks to the theft of office equipment and retail products meant for sale to customers.’  The article also mentions that ‘To many employers’ chagrin, the workers guilty of the most grandiose theft frequently turn out to be those deemed to be highly trustworthy’.

We have seen a dramatic increase in internal theft while in the field and expect to see a continued increase in 2009, especially in employees who rely on tips for a large part of their salary.  Many hotels have been forced to dramatically reduce the number of hours as occupancy declines and many of the hotel restaurants have slowed down.  Many employees are now really struggling to make what they made in the past and most cannot afford to take a pay cut and still pay their monthly expenses.     Continue reading →

Asking the Right Questions During an Interview

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Whether you are new to the hiring process or have been interviewing candidates for years, it is always helpful to refresh yourself on some of the questions that can and cannot be asked during an interview.  With the large number of discrimination lawsuits filed, it can be easy to catch a lawsuit without even realizing it.  With some new types of questions, you may also gain some new perspectives and methods in your current hiring practices.

Before you start, remember the categories that are illegal to discriminate against.  This will help you phrase all of your questions properly.  These categories include: Disabilities, Marital/Family Status, Religion, Sexual Orientation, Ethnic Group/Race, Nationality, Age, Gender, Arrest Record, Outside Affiliations, and other miscellaneous items such as the ability to drive.  Remember to never ask any questions that involve these categories as it can be interpreted as discriminatory.  Any questions that you ask must pertain to the job that is being interviewed for and the skills and abilities required for that position.  If you are unsure about a question that you would like to pose, consider making the question as general and open-ended as possible.

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Are Rising Food Costs Killing Your Restaurant’s Profits?

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Are rising food costs decreasing your restaurant’s profits?  You better act now!  We anticipate the cost of food, especially the staples, to continue to rise.  Food and Beverage Departments for hotels are typically low-profit areas and can easily turn into no-profit areas if you do not react quickly.  Here are some things that you can do:

Know Your Food Costs – It is surprising how little hotels actually know about their food costs.  Most hotels have a breakfast buffet, however, few hotels have any idea what their food cost is on the buffet.  Most just assume they are making a high profit because they were taught that buffets were always high profit.  Not true.  Spend the time to calculate your buffet cost.  You may be surprised to find out that your buffet food cost is 40 or 50 percent!

Here is a simple way to find out the food cost for your buffet:  Have the kitchen log every single item that is used on the buffet during a 7 day period (10 cases of bacon, 22 cases of eggs, etc).  At the end of the week, add up the total food expense and divide it by the amount of revenue you posted for those days.  Be sure to do it for a whole week because you will find that your weekend food cost is very different than your weekday food cost.  Also, be sure to add in all items included with the buffet such as juice and coffee.

Re-engineer Your Menu – Hopefully, you are using a spreadsheet or computer program to monitor your menu engineering.  Be sure to re-evaluate your menu every single month.  For additional menu engineering help, check out this article.

Evaluate your menu prices – Now that you know your food cost and your menu engineering, be sure to evaluate your menu prices.  You will most likely have to raise prices.  However, don’t just raise all of the prices across the board, be very strategic.  Raise only the prices of the items that are the best sellers but do not have the best profit.  Keep the prices the same on the items that do not sell well but have a high profit.  Replace the items that do not sell well and do not have a high profit.

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The Ultimate Arrival Experience

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Many hotels have valet service, bell service, and a good team at the front desk but still, fail to provide a great arrival experience. The main problem is that the three teams do not work together as one team with the guest’s interest at heart.  While the valet attendant, the bellman, and the guest service agent may all do a great job individually, the guest sees the arrival as one experience and may be frustrated.

The solution is communication…  communication between associates and the guest.  Here is how the ultimate arrival experience takes place:

A guest pulls up to the hotel and is immediately greeted by the valet attendant. The valet attendant welcomes the guest to the hotel and offers luggage assistance.  The valet attendant does the normal tasks such as filling out a luggage ticket and asking the guest his/her name.  The valet attendant loads up all of the luggage onto a bell cart and escorts the guest to the front entrance of the hotel.  The valet attendant is then ready to hand off the guest to the waiting bellman.

Here is where the first important communication is required.  The valet attendant should introduce the guest to the bellman and the bellman to the guest by saying something like “Mr. Smith, this is John.  He is going to assist you with the check-in and then escort you up to your room”.  We also recommend that the valet attendant discretely hands the bellman a small card with the guest’s name on it.  Hopefully, the valet attendant got the guest’s name when the guest first pulled up.

Now the bellman can escort the guest to the front desk to check-in.  Again, here is where communication is key.  The bellman should introduce the guest to the GSA and the GSA to the guest by saying something like “Hello Lisa, this is Mr. Smith.  He has a reservation for this evening.”  Again, the bellman can refer to the card the valet attendant gave him if the name is difficult.  Lisa can then handle the check-in while the bellman waits off to the side.  Once the guest is checked in, the bellman is ready to escort the guest to the room.  The bellman can escort the guest to the room, tell the guest about the hotel’s amenities, and thank him/her for staying at the hotel.

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Guest Room Knocking Etiquette

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Having stayed in many hotels, we have experienced our share of disturbances. Unfortunately, many of these disturbances have been caused by the hotel’s staff.  The most awkward and uncomfortable ones come from the knocks and entries at the guest room door.  People treat their guest rooms in a hotel like their bedrooms at home.  Unfortunately, they do not think about the fact that many employees in that hotel have a key to these bedrooms.  On the other hand, many hotel employees do not think of hotel guest rooms as being private to the hotel guests.  Three knocks and a quick key swipe and they have entered the room, too quick for the guest to object.

Most guests like to be comfortable in their rooms and are not in their normal, public attire.  It is very embarrassing to be seen that way in an unplanned fashion.  Make sure that all employees in your hotel are properly trained in the etiquette of how to properly knock and enter a guest’s room.  Here are some the tips to remember: Continue reading →

How Often Should Your Hotel Have an Internal Audit Conducted?

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It is a common question, how often should your hotel have an internal audit done?  The answer:  well, it depends.  Here is why:

First, how often do most hotels actually conduct an internal audit?  Most hotels will say they are audited once per year.  However, most hotels have the goal of being audited once per year.  In reality, they are audited only every 2 or 3 years in most cases.

Having a goal of once per year is a good start.  But we recommend that you set your goal based on the results of the last audit.  If the hotel scored 90 percent or better on the last audit, conducting one audit per year is fine.  However, if the hotel scored less than 90 percent, we recommend that the hotel creates a 90-day action plan to improve their results, and then the hotel is audited again after 90 days.

We understand the expense of conducting an audit, however, the amount of money that could be lost by a hotel with improper controls could easily be far more than the cost of an audit.

A few additional audit tips:

First, the audits should always be completely unannounced.  We usually recommend that the Controller and other key managers who are needed for the audit submit a schedule of any vacation days so the auditor does not show up during their vacation.

Second, the follow-up on the audit is just as important as the audit itself.  Many hotels will score poorly year after year.  Passing the internal audit should be on every Controller’s list of goals and yearly review.