In preparation for the Hotel Operations Management program, all of the Hotelies were instructed to start studying up on the business practices of many of the leaders in the hotel industry, such as Mariott, Starwood, and IHG.
Despite the fact that our group were not able to meet due to scheduling conflicts, we all continued to do our research, sharing knowledge with each other along the way.
In terms of business models, I found that many of the leading businesses do not own the majority of their hotels. They simply franchise and operate the hotels, earning a profit through a percentage of the rooms that are occupied, while the hotels themselves remain independently owned. However, companies such as Hilton and Starwood do own properties -- however these properties generally make up an insignificant amount of the overall company.
Sharp touched on this in his book, implying that owning and building hotels simply created too much financial strain on Four Seasons, so they simply relied on managing and franchising hotels. Thus, it would not be any stretch of the imagination for the other companies to follow suit.
Another trend I noticed was that some hotel groups seem to specialize in certain types of hotels. For example, Hilton tends to focus more on upscale hotels, such as the Waldorf-Astoria brand that they manage. Meanwhile, Choice Hotels focuses on smaller budget hotels such as Quality Inn. Other companies such as Accor operate a myriad of hotel types, from resorts to smaller budget hotels.
Hotel companies also operate several hotels under different brands. These brands are tailored to a specific type of hotel, such as the Courtyard by Marriot and IHG's Holiday Inn focusing mostly on affordable high-scale lodging, while brands such as the Ritz-Carlton and the Four Seasons focus mainly on 5-star resorts. It is important that the brand is marketed properly to the appropriate consumers, if not, the brand will not become established and the hotels will likely stagnate due to lack of business.
The details with employment matter as well, especially with the "Frontline," generally part-time employees that do the menial jobs in the hotel. It is important for employees to be treated well, in order to give exemplary service, as Sharp points out.
Also, the idea of a company policy, a sort of "Golden Rule," is also fundamental. This policy illustrates the goals of the hotel and all employees are pushed to meet those standards. Any less is generally not tolerated.
The most important thing I learned however, was that the details of any hotel can make or break the business. Sharp's book focuses mainly on this aspect, where he recounts testing pillows and mattresses to see if they were the best that could be offered, developing amenities such as the small bottle of shampoo to the 5-star hotel restaurant.
From that, I surmised one basic fact: whether it be a fresh-baked cookie for arrivals from Hilton's DoubleTree hotels, to listening in on guests who are muttering complaints and moving in to correct the situation, the little things mean everything. Not only because it is good business, but it is also the right thing to do.
Any less than that, and the hotel will fail. Because without the little things, the hotel and the service itself feels a little less "human." And there is no better business plan than focusing on those little things.
Great blog, Jobel!
ReplyDeleteYou touched on a lot of areas about running not only a hotel (chain) but any other business, too.
It’s the little things that make the difference. With most businesses the end user has a wide variety of options on who he does business with. Whether it’s a hotel, an airline or a rental car travelers have lots of options available so it’s the details that make he difference and bring the traveler back for more.
And travelers talk to each other, Jobel—a lot. The word of mouth advertising can either make or break businesses in the service industry. If I hear from my coworker that the Acme Hotels are dirty, noisy and the staff is rude and inefficient, why would I even consider checking them out to validate the negative comments from my coworker? I’ll just scratch them off my list and move on to that other place that had glowing reviews.
And, as you mentioned, hotel chains often brand their hotels to cater to a specific clientele. When you’re offered a choice between staying at a Motel 6 or the Waldorf Astoria, is there any question beforehand what kind of place you’re going to be staying at? Or what it might cost you?
And never ignore the face of your company. The CEO of a hotel chain may be the best in the business but the customers are never going to meet that person. The people they’re going to meet—the people who become the de facto face of the company—are the front-end people, the bellhops, the valets and the housekeeping staff. So how much emphasis should a CEO put on the training, the appearance and disposition of the people who become the face of the company?
I was listening to a radio talk show yesterday about the guy who was pulled from the airplane because he wouldn’t pull up his pants. The callers started off talking about the incident but after one caller started talking about how rude the people for that airline normally are, that’s what became the focus of the rest of the calls. And they didn’t even mention the cost of the airline tickets, the on-time history of the airline or anything else that might go into selecting an airline—only the fact that the face of the airline were the kind of people that would make them avoid using that airline.
On another note, Jobel, part of what we emphasize in the ILC is time management. If you and your fellow hotelies were working for me in my business and came to me to tell me that you couldn’t find the time to get together to work on your joint project, the first thought going through my mind might be how and when I could replace you all with people who had the wherewithal and could make the time to do the job they were assigned. Time management is critical in every task, Jobel. I say this not just to you but to all of our ILCers, you don’t find the time to make things happen—you MAKE the time.