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It’s Time for the Hotel Industry to Heal Itself
By Joseph M. Gravish, August, 2007

“It is every man’s obligation to put back into the world at least
the equivalent of what he takes out of it” (Albert Einstein)

The July 21-22, 2007 edition of the “Wall Street Journal” contained a letter to the editor which should be mandatory reading by all hotel owners, management company executives and general managers. Written by a McDonald’s franchisee, it encapsulizes what should be the model philosophy of all hotel leaders. 

In part, it reads “We (employers) take our role as ‘first employers’ of many adolescents very seriously. We clearly have a ‘stake in their development.’ There is tremendous personal satisfaction watching a teenager grow from shy and unsure to confident and capable. Treating employees as disposable makes no sense in the hospitality industry.”

Though directed specifically at teens, the focus on improving a person’s – no, an employee’s - quality-of-life truly applies to staff members of every age.

And now is the perfect time for those controlling the purse strings to put back into the “world” at least the equivalent of what (they-hoteliers) take out of it. Against a backdrop of seemingly endless good news it seems not only appropriate - but an ideal time - to reward our most important assets.

Not a day goes by without yet another industry headline trumpeting the continued success and phenomenal growth of our business, Despite increased operating expenses and persistent amenity creep, optimism runs rampant - the pipeline is full with virtually every type of hotel, ADR is up in most markets, last year the average hotel manager’s operating profits jumped 13.3% – the third straight year of 10%-plus increases, labor costs are being effectively managed, etc. And the 2006 “summer of discontent” management-union labor bargaining sessions are a thing of the past? Or are they?

My concern is that many hoteliers are asleep at the switch, have conveniently forgotten the past, and are failing once more to plan for the future. Many are continuing to ignore the commonly accepted fact that the “human factor” – now more than at anytime before – plays a pivotal role in building profit. With every hotel brand at parity and playing a similar amenity one-upmanship game, it’s the service experience that differentiates the true profit makers. Those in “it” for the long run already recognize that carefully planning for tomorrow’s exceptional workforce begins today. Many others though may not.

Michael Mitchell cites the hotel industry as “…a particularly attractive target in today’s atmosphere (for union organizing), as it is a growth industry, it contains some jobs that are relatively low paying, and it is an industry which cannot be exported or handled offshore”(“Union Organizing Trends in the Hospitality Industry”).  It seems only prudent therefore that hoteliers take action now to dispel in the minds of every employee that he/she is  “disposable”, and in doing so not only create a more stable, loyal (and profit-building) service team, but by demonstrative action help reduce the growing risk of unionization.

In sum, it’s time for the industry to heal itself.

The hospitality industry is a target not only for unions, but legislators as well. Local, state and federal governments are actively proposing precisely what hotel management fears – costly, mandated employee compensation and benefits rules; for example, expanded FMLA entitlements and mandated paid sick leave (Healthy Families Act, H.R. 1542 and S. 910). It’s important that the industry de-incentivize the need for both union and government involvement.

Dealing effectively and pro-actively with employee issues is the best and least expensive form self-medication.  My treatment plan: 

(1) Start by paying wages at least equal to, or better yet above, comparable prevailing wages and indexing them to inflation. But we can’t stop there.

(2)  Like it or not, health benefits are on the top of almost every employee needs survey.  Following Einstein’s philosophy it’s every employer’s obligation to do what’s reasonable to improve the quality-of-life for his/her employees and their families. Fifty-seven million Americans – nearly one-half of private-sector employees – are denied even one paid sick day, and 15% of all Americans are without health insurance.  Can we demand total commitment when our most important assets are trying to balance the need to take care of a sick child and also get the job done? Can we expect loyalty and service when we leave sick employees no other option but to come to work lest they lose a day’s valuable wages - not to mention the risk of infecting co-workers?. 

(3) Manage everyone fairly. Implement and enforce balanced management-employee relations policies and procedures.

(4) Address employee complaints quickly; but never compromise standards.

(5) Provide all the best-quality resources necessary to get the job done properly, the first time.

(6) Institute an employee rewards program. Acknowledge exceptional short-term performance immediately and celebrate long-term service regularly.

(7) Create “people success” pathways for teens and veteran employees. Promote education, advanced training and encourage in-house promotions. How demoralizing is it to one’s self-esteem and team morale to allow untapped employee potential to languish while repeatedly hiring outsiders to fill more rewarding positions.

Years from now hoteliers will once again be complaining about poor profits; that better wages and benefits are (sadly) unaffordable “at this time”. They’ll have forgotten the good times and the opportunity those years afforded employers to give back – to eliminate permanently the idea of a “disposable employee.” In the interim they’ll have wasted untold dollars unnecessarily lobbying against more government and union “interference”. 

I only hope those “years” are far away.  

Mr. Gravish is a human resources professional with over 25 years leadership experience at numerous organizational levels both national and international. He is an advocate of building business success through, and by, people – first. 

Joseph M. Gravish

Also See: Throwing Bones; As the Lodging Industry Reports Financial Successes, Some Hotels Pay at the Bottom of the Scale / February 2007


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