For Hospitality Experts’ own Jeffrey Epstein every day is spent asking the question; how can we improve your business? As a well-known consultant to the independent hotel sector, Jeffrey works with Instigate, a business improvement and change management consultancy for the hospitality industry, tackling challenges facing hoteliers, ultimately improving their teams and their bottom line. Here, Jeffrey shares some of his insight.
Some people may be surprised when I say I think there is one core challenge facing hoteliers and it isn’t an external issue, but rather something in house that ultimately only they – and their team – can solve.
This primary issue for hotel owners is not being able to achieve their potential profit, and by this I mean a profit that is able to cover debt repayment, provide for capital improvement and a dividend for the owner. Of course there are many factors leading to this problem, from poor cohesion in the team structure to inadequate economic appreciation, and it is only by working as a harmonious team that we overcome these obstacles.
In my experience it boils down to a lack of understanding by all parties as to what the customer, the owner and the management team all need to feel successful. As in any business, but particularly in the world of hospitality, it is essential to ensure all three stakeholders are satisfied, from the customer to the chef to the CEO.
The customer needs to feel their expectations are being exceeded. Owners must believe there is the prospect of turning a profit. And the management team must feel good about delivering both of them by taking responsibility, having accountability and being given the opportunity to perform as a team.
That’s where we step in, and our aim is to ensure the business’ profitability improves, while it is overcoming the smaller, and sometimes external obstacles, including everything from staff problems to OTAs.
In my experience most boutique hotels are not achieving their profit objectives. The potential for greater profit is there, but finding it is the challenge. On the surface a business may appear very successful, especially as customer service in this sector is often second to none. But while customers may be happy and staff may be enthusiastic and motivated, a business is not sustainable long term if there is not enough profit.
So your eyes turn to the group which can deliver this potential, the people who are able to satisfy the owners desire for profit whilst exceeding the expectation of the guests; the management team. The team must not only be enthusiastic and motivated in their work, but also be empowered and well trained in understanding the economics of the business.
This is where I see a real crisis in the hotel industry, general and departmental managers lacking an economic grasp on the individual business and an understanding of the hotel’s business goals – and this is a fundamental obstacle. Starved of knowledge, training, job clarity, clear vision, poor work conditions and inevitably a lack of praise, are we surprised by high staff turnover in hotels today?
Economics and empowerment
A key way to achieve a more cohesive working group and a greater understanding by all – management teams predominantly – of the profit objective and how to reach it, is by including a wider section of people during the creation, planning and development of an annual budget and profit and loss statement. This involvement leads not only to a better understanding but a sense of ownership and ambition to achieve the overall company goals and objectives.
In our Instigate coaching/training programme, we aim to teach, train and empower managers and their teams to create a group of like-minded individuals. To think, plan and act in concert.
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This is harder to do in reality when you consider that a Boutique Hotel consists of highly trained individuals with specialised skills. But through hard work and determination it is amazing to see the transformation that takes place when people are motivated, and feeling in control of their destiny. It is also an essential aspect when it comes to the smooth running of a Boutique Hotel as it gives managers and heads of departments the ability to confidently set their own goals, objectives and challenges and have the certainty in themselves to put them into action within a given timeframe. They must harness the human potential within their departments as well as make use of staff in other departments. Finally, management teams and their staff must be confident in their own ability to run the hotel to a level which exceeds the expectation of the guests and leads the owner to feel confident they will turn a profit.
We see this level of discord when hotels discuss the role of Online Travel Agencies, a noisy topic in the hospitality industry at the moment. It is a lack of management understanding that leads to the misconception that an OTA is central to the sales and fulfilment process. Over reliance on external sales channels is an abdication of management responsibility for the entire sales and marketing process. This is a key stumbling stone for the boutique hotelier, particularly those that are independently run. An understanding of their own market, and setting up of an company marketing and sales strategy both offline and online could mean the management team avoid spending extravagantly with OTAs and reducing profit margins.
The same issue raises its head when it comes to discussing the rise in importance of the online reviews. Again this relates to my initial point and is down to simple customer service and the importance of always ensuring people are feeling good and successful in their choice on venue.
Another stumbling block facing hoteliers is the lack of understanding by the staff of each role and its function. For example the role of the hotel manager is to provide profitability to the owner and deliver satisfaction to the guests. The main problem here is that when people do not understand their role it leads to a loss of accountability. This can stem from a lack of management skills amongst senior staff and in my eyes it is important to invest in people to ensure they feel empowered to manage their team to the best of everyone’s ability. This training is about understanding the business from the bottom up so it can be managed effectively.
And with this managers should have the ability to inform their own staff well of the businesses goals, set objectives and appraise people because they understand them inside out themselves.
Building this empowerment must come from the management but it should also exist throughout the team. When I work with businesses we always advocate the importance of every member of the team understanding all aspects, allowing them to appreciate how their own action impacts on another, on the business, and the bottom line.
Trust, debate, plan, action = results
The key attribute of any successful team, it’s foundation you might say, is trust. Managers (team-players) must trust each other. They must be able to share their experiences both professionally and personally and provide both physical and emotional support. Without this trust there is rarely success in any business. However with trust and respect comes an environment where ideas flow and success grows.
Successful hotel workplaces are where opinions are expressed openly without fear of dissent. I do not think we argue enough in hotels, creativity and imagination kills boredom, predictability and stagnation and Boutique Hotels must renew themselves regularly to thrive. Ideas should be formed by the collective, leading to action and delivery as one cohesive unit. This is what true team accountability is all about. Finally, if these four things are working as one, if the team is truly committed then all we are left with are fantastic results.
To instigate and maintain these implemented changes there must be positive communication. It’s vital channels of communication are always open and nurtured with regular scheduled meetings. There is no place for email in a boutique hotel, only face to face communication will ensure everyone understands what they are working towards. Managers must ensure they make time to build in meetings, briefings and reviews, with all staff and this should be done on a very regular basis.
Ultimately the goal to overcoming all obstacles, internal and external, is having a team that understands the objectives not only of themselves, but also of the business, and the team. This is achieved through excellent communication and empowered people that trust each other and understand they are all working towards the same goal. Because as with the consortium of Hospitality Experts and as K H Blanchard said: “None of us are as smart as all of us.”