|By Joseph M. Gravish (May, 2006)
A series of recent articles touts the resurgence of the travel industry. Higher airline ticket and vehicle gas prices appear to have been absorbed by the consumer. Airplanes are flying at or very near capacity as business travel remains strong. Theme park sales are up 7% as parents are apparently hard-pressed to tell Jane and Johnny that there will be no vacation this year because the price of gas has risen 50% in the past year.
This is much needed good news for the hospitality industry in general and hotels in particular. According to PKF Consulting, 2005 revenues for U.S. hotels were up 10-plus percent. Hilton, Starwood, Four Seasons, Marriott, Host, Lodgian, Choice, Interstate, Cendant and IHG-branded hotels, among others, recently reported a double (or near double) digit increase in REVPAR for the first quarter, 2006. Thankfully, the health of the industry is better now and revenue growth is projected to continue climbing upward. Meeting planners are planning more meetings in 2006 and beyond. International travelers are even returning to Indonesia as occupancy rises to pre-tsunami levels. The Penn State Index of Hotel Values reports a 9%-16% increase in the value, per hotel room (2006 versus 2005) in all categories of hotels, even the traditionally difficult mid-scale with food and beverage segment. They project the average U.S. hotel room to be worth more than $100,000 by 2008.
Jeff Weinstein, editor-in-chief, notes in the May edition of Hotels magazine that guests are also not objecting to higher room rates. His wise counsel - “… if there was ever a time in a cycle to increase your room rates, now is the time. Cycles come and go and this opportunity will not last forever.” Owners, operators and hotel managers should be celebrating such profits. All appears well in hotel land. Or is it?
In the same magazine mentioned above appears another article titled “Use, Honor Your Best Resources”. The author lauds the Hotel Bel-Air, Beverly Hills, California for its “best resources” programs which a focus on employees. Their programs have contributed to an enviable less than 10% turnover rate and an average employee tenure in excess of 14-plus years. This hotel obviously understands that employee quality-of-life programs directly enhance guest service, avoid unnecessary costs, and ultimately – positively - affect the bottom line.
What’s missing in all this industry euphoria is the acknowledgement of, and the recognition and meaningful reward for, those who create the thousands of memorable moments that engender not only guest satisfaction and intense brand loyalty. As mentioned by Mr. Weinstein the opportunity to strike is now. I suggest a parallel opportunity - now - to maximize profitability through new industry reputation building, employee-focused quality-of-life initiatives.
No less than the president and CEO of the American Hotel and Lodging Association recognizes that hotel workers are critical to the success of the service industry – “…the lifeblood of our business” according to his letter to the editor in the USAToday. Well – he’s correct!
It’s time industry leaders at all levels open their door and take this opportunity by stepping up to the plate – truly begin to walk-the-talk – regarding their employee appreciation efforts. No more delays (we need to be more profitable first), no more excuses (we have to invest more in brand-mandated improvements). Now is the time to begin rewarding employees with more than a poverty – or near poverty – level wage and a comprehensive quality-of-life benefits package. One need only look at the many states and local governments which mandate a higher minimum or quality-of-life wage and the on-going battle between the industry and union labor advocates to appreciate not only the emotion but the gravity of the issues – wages and benefits. To be fair I’m certain that some owners do care equally for their “real people” as they do for their real estate. But not enough. So what’s the incentive for hotel owners and managers to better reward their most important asset?
To quote Dr. Charles Hughes, Center for Values Research “Companies that get a union deserve it, and they get the one they deserve”. Companies which treat their employees well demonstrate by their actions that unionization would have no value nor would be in the best interests of the workforce.
I would love to see this industry commit to raising its image and reputation by initiating better employee-based efforts – to convince hotel owners and executives that to grow in this ever-challenging environment it’s essential to become employers of choice – not employers of chance. The Hotel Bel-Air approach proves that an exorbitantly high employee turnover rate is not unconquerable – not simply a daily occurrence that should be off-handedly ignored or accepted as a normal cost-of-business.
Industry leaders - you need to layout the real facts in your own publicity campaign. For example, how many (and which) hotel brands actively encourage franchisees make competitive wages and benefits part of their reviewable business strategy? How many (and which) management companies and properties offer CPI-indexed, competitive wages, good (not generous) benefits and quality, affordable health care to employees and their families. Which hotels have been cited in the many “best to work for” lists? Which have been recognized as employee-friendly award winners? If your findings don’t favorably compare to other service or non-sector industries, why?
If, as stated, the industry wants to work in harmony and good faith with its employees (and the unions) the time is now to put in place programs to better protect your most valuable asset.
Captains of hospitality it’s time to stand up and lead. As Ross Perot remarked, inventories can be managed and computers programmed but people need to be led. Now is the time you need to open the door and create the opportunity for your maids, waiters, busboys, janitors, dishwashers, maintenance workers, etc. and their families to enjoy a quality of life for which they’ll forever be grateful. If you open the door wide enough, I guarantee you’ll be rewarded too.
I hear opportunity knocking. Are you rushing to answer the door?
Mr. Gravish is a human resources professional with over 20-years leadership experience at numerous levels and diverse environments. He is an advocate of building business success through, and by, people.
Joseph M. Gravish
|Also See:||Marriott International, Inc.Recognized by FORTUNE as Third Best Company with 100,000 or More Employees to Work For / Jan 2003|
|Four Seasons Hotels and Resorts Makes Fortune Magazine’s ‘100 Best Companies to Work for in America’ for Fourth Consecutive Year / Jan 2001|
|Winning Brand Loyalty; Discerning Your Guest’s Tribal Loyalties / Richard K. Hendrie / April 2005|
|Creating Customer Loyalty: Beyond Food and Bed, A Good Relationship Is Your Best Marketing / Richard K. Hendrie / March 2005|