By Larry Mogelonsky, MBA, P. Eng. (www.hotelmogel.com)
Most guests are unaware of the third key pillar of most flagged properties – the management company. When they’re doing their job, you can tell those as everything is running smoothly and guests are happy.
New Castle Hotels and Resorts (NCHR) is one such company, and as I learned from sitting down with Vince Barrett, the company’s Vice President of Food & Beverage and Managing Director Provender, it all starts by minimizing turnover at the senior level.
This ensures that there are no staffing crunches or training hiccups down the chain, but it also means that time spent for onboarding can be reallocated to new initiatives. Beyond this, Vince offers a few pointers on where the industry is headed and some of the prominent threats we will soon face.
What are the greatest challenges facing management companies?
First is talent. Finding good talent at all levels is probably one of the greatest challenges we all face, particularly at the line level positions like housekeepers, stewards and line cooks. Second would be managing rapidly changing brand standards and mitigating the impact of the additional capital that comes from brand mergers.
As cost savings get harder to find, what are you doing to bolster profits?
Hire the right people. Train them and provide them with the tools necessary to do their jobs. They will feel better about themselves, their job and the company, and will provide better service to your guests. Next, reducing turnover can save tens of thousands of dollars, not just in the cost of processing, on-boarding and training, but also in the efficiency of the hotel operation. If you are constantly hiring and training due to turnover, it will negatively impact all of your productivity matrixes, service scores, associates’ opinion surveys and market share. Fix your turnover so you can focus on service delivery to drive higher revenues.
Are you a proponent of such cost savings as allowing the guest to eliminate housekeeping?
We are in the hotel business which is the people business. The housekeeping department, and room attendants in particular, are now key to the guest experience. It used to be that the front desk associates were the ‘gatekeepers’, but now with express checkout and the new technology of keyless mobile entry applications being offered, housekeepers now own more of the guest experience. We actually see that guests now interact with the room attendants and housekeeping department more than ever before.
Has the sharing economy affected your business?
Companies like Airbnb have had an impact on the RevPAR index in several major and even secondary markets from Boston, New York, Chicago and San Francisco to Portland, Maine. This is especially true during citywide events where you can truly see and feel the impact that Airbnb is having. It is difficult to quantify due to their lack of reporting, but you can see this trend continuing. We just need to level the playing field.
Apart from alternate lodging providers, what other business threats are on the horizon?
Brand consolidation is an issue because there are markets where one brand’s share can exceed 60% of capacity. As more consolidations occur, consumers could be left with only two or three brand families to choose from. Next, oversupply is becoming a problem in some markets, but this will likely level off.