the Front, Heart and Back of the House
|By Joseph M. Gravish, August 2006
As a hospitality professional you already know line-level employees make the (hotel) world go round. So how do owners, management company executives, property managers and department heads convert such verbalized mantras into truisms?
A recent article in “Lodging Magazine” provides at least part of the answer, “Wise holteliers focus on proactive rather than reactive service strategies as a means to drive guest… loyalty…” (“The Myth of Service Recovery”, Rick Garlick, July 15, 2006).
The article should have continued with the rest of the story - a corollary explanation of who makes this proactive strategy happen and just as importantly, how hoteliers acquire, train, resource and keep the type of front-line service staff who routinely anticipate and exceed guest expectations, thus driving guest loyalty to a Nirvanic level.
The author claims guests who experience a service problem and have it successfully resolved render higher scores on service surveys, and are more likely to revisit the property, than guests who experience a problem-free stay. He also correctly warns that the attractive but reactive conclusion - that guests can be easily wowed with something less-than-perfect - is a “dangerous” myth. In my opinion, an even more dangerous reaction occurs when hoteliers lower service standards, perhaps to save money, in the mistaken belief that less-than-perfect service is an acceptable, more easily achieved business strategy.
Hoteliers always look to labor as the first area to economize. It’s the largest single expense item at about 44% of total operating costs. Unfortunately, given today’s highly competitive environment it’s the one area we can least afford to cut. It’s the professional, experienced, highly-trained, service-obsessed line-level staff who: create the type of proactive service environment the author describes; develop one-on-one relationships resulting in steadfast guest loyalty; constantly seek revenue enhancing opportunities; and ultimately produce greater profit.
So what do hoteliers think a proactive, A - team employee is worth these days? Not much according to forbes.com. In an industry where worker knowledge and experience can truly make the difference, turnover remains an ever-present bug-a-boo often blithely accepted as a normal cost-of-business. Similarly, initial and refresher training is often minimal to none, simply eliminated when dollars become scarce (and once gone unlikely to return), or ignored as a revenue multiplier when dollars are available.
Yet owners and operators continue to expect perfect, or near perfect, 24/7 service to meet more demanding guest expectations all while paying memorable moment makers the lowest possible pay rates. For example, among the 25 worst paying jobs in America, Forbes found waitstaff (mean annual salary $15,980, or $7.58 per hour), dining room hosts and hostesses ($16,310), food preparation workers ($17,850) and hotel maids and housekeeping cleaners ($18,030, or $8.66 per hour).
While hoteliers vigorously contend they’re paying “competitive” wages, hourly pay is down on average 1.7% compared with two years ago, after adjusting for inflation. According to the U.S. Labor Department the average worker hasn’t seen a meaningful pay increase since 2003 when wages for private sector employees peaked.
Is it any wonder then that in a Randstad USA-Harris Interactive national survey this year nearly 40% of employees think their company pays less than market rate (up from 28% in 2005) while 50% of employers, on the other hand, said that employee wages are market competitive (up from 42% in 2005).
Is it any wonder then that parents encourage their children to aspire to become almost anything other-than hospitality careerists? Have you ever heard a career counselor tell your child that a career in hospitality is a way to a financially secure, prestigious lifestyle?
On the flipside, U.S. hotels are profiting from yet another year of occupancy and revenue gains (estimated at 10.5% in 2005 alone – the greatest gain in total revenues in over 20 years). The 2007 forecast by PKF-HR estimates an additional 6% increase in total hotel revenue compared to 2006.
To be fair, not every hotel has seen revenue growth and operating expenses are up. But overall there’s little bad news. Industry leaders are positively euphoric. Despite the gnashing of teeth that this upswing may end around year 2010 the editor of a leading industry magazine wrote, in July 2006 “There are a lot of deals to be done, brands to create and nurture, and above all, profits to be made…” He stresses “…the real efforts in the coming months and, hopefully, years should be on making hay while the sun shines.”
So does industry really walk-the-talk?
For example, as Stanley Turkel asks “Am I the only one who sees a disconnect between the new emphasis on hotel customer service and the stubborn unwillingness of many hotel owners to support an increase in the federal minimum wage…?” (“Nobody Asked Me, But…No.12”, July 18, 2006, www.hotel-online). The industry staunchly opposes any increase in minimum wage while the Association of Community Organizations for Reform Now (ACORN), an advocacy group supporting living wage proposals, proffers that had the minimum wage kept pace with inflation it would be closer to $9.00 an hour. (As an aside, while the federal minimum wage has not increased in since nearly a decade, Congress has raised its own pay by $31,600 in the last nine years.)
Given the above is it any wonder that 20 states and 140 cities have already enacted living wage laws – with similar laws being debated by state, county and city governments every day? Is it any wonder that the typical American hotel worker gets emotional when she reads that the average U.S. chief executive made $10.9 million in 2005? Considering that 51% of this compensation was attributable to stock gains, the remaining 49% amounts to an hourly wage of over $2,500.
The facts are crystal clear. The hospitality industry has more than an image problem. It has a much larger credibility problem.
It supports a liberal U.S. immigration policy but declines to champion efforts to simultaneously demand industry-wide wage and quality-of-life improvements for its most important asset. It characterizes itself as an industry paying “competitive wages on (an) areas cost of living” basis and offering “generous” benefits but US DOL, and other survey, data, indicate otherwise.
The claim that Americans won’t take hotel jobs is self-serving and false. To quote Thomas Sowell “More pay attracts more people”. (He should have added that benefits help keep them.)
Nothing happens in any hotel without the hardworking efforts of the many Bobs, Betties and Bryans in the front, heart and back of the house. These people can’t be right-sized or eliminated without an unacceptably high cost to the proactive service culture that engenders guest loyalty.
I suggest hoteliers go to any unemployment office. Announce proudly
that you’re paying above-market wages and providing reasonable quality-of-life
employee and family benefits. Also make it clear that your standards for
perfect service to every guest, every time - no excuses accepted – will
not be compromised. You’ll be trampled by even more Bobs, Betties and Bryans,
and a host of others clamoring for the opportunity.
Mr. Gravish is a human resources professional with over 25 years leadership experience at numerous organizational levels and among diverse environments, nationally and internationally. He is an advocate of building business success though, and by, people – first.
Joseph M. Gravish
|Also See:||Negotiating Issues Between Hoteliers and Unions – It’s About the Money / Joseph M. Gravish / July 2006|
|Hotel Companies Need to Be on the List – the Right List; Employees Can Make it Happen / Joseph M. Gravish / May 2006|
|What Are Hotel Employees Worth? / April 2006|
|Hotel Labor Union Negotiations - a Perspective / Joseph M. Gravish / April 2006|