TOP TIPS: The biggest business blunders that boutique hoteliers make

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The Hotel Management Company advises on how independents can maintain or boost their competitiveness and the oversights to avoid:

  1. Close and ongoing monitoring of performance and service delivery of all personnel is critical to ensuring the business does not run off track. Often in boutique hotels, there is a tendency to over rely on one person in the form of the General Manager, yet it is important to remember that every member of staff has an impact on guest experience and guest satisfaction.
  1. Owners and operators can sometimes let the ball drop when it comes to producing meaningful management information – particularly with regards to financial data. Transparency is key for the management team to ensure that the decision making process for every department is informed and optimum performance is achieved.
  1. Related to this, and also to optimise departmental performance, it is important that the production of management information is in an appropriate format. In particular, management information should indicate the Profit & Loss performance of each outlet. Very often under-performance in one or more areas is disguised if there is no departmental breakdown.
  1. Rooms revenue under performance can often be a result of a failure to implement sound revenue management processes. For any hotels that do not currently have a revenue management function, there is a very quick win to be had by introducing it.
  1. The revision and accurate costing of menus can completely turn around margins generated by a hotel’s F&B departments. Incorrect pricing is common and is an area that can affect margins tremendously.
  1. Effective marketing is key to growing business but often drops down the list of priorities. There is no question that the world of online marketing is increasingly complex and sophisticated and is only accelerating in its level of complexity, however, the good news is that the costs of participating effectively are relatively modest if armed with the appropriate knowledge.
  1. In particular, poor quality websites can seriously affect direct bookings and lead to an overreliance on commission-bearing business via OTAs, thus reducing contribution by typically in excess of 20%. Ensuring that the hotel’s online ‘shopfront’ is appealing, informative, engaging and ‘sticky’ will significantly drive business through direct bookings.
  1. To make sure that service levels are consistently high, members of staff need to receive the appropriate training and clarity around responsibilities. Hotels that fail to provide adequate guidelines in the form of Job Descriptions, and the training to accompany them, will inevitably suffer a lack of organisation and poor service levels. This will in turn, negatively impact guest satisfaction and online ratings, thus damaging reputation and future business prospects.
  1. Where sufficient funds are lacking, the standards of presentation of properties can sometimes be overlooked and will inevitably be a turn-off for guests and affect repeat business. Hard as it may be, funds must be obtained to maintain the physical fabric of a business at a high level. This may require a solid business plan to take to the bank. Without ongoing investment, businesses are likely to fail and sadly, there are far too many hotels in this category today.

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