By Bob Rauch
Hotel Industry Post-Pandemic
The number of areas of responsibility that fall under a hotelier is hard for other businesses to imagine. Development, acquisition, finance, operations, customer service, restaurant, bar, maintenance, sales, marketing, revenue management and much more. The businesses churn guests daily and requires real time daily decision making. As we look toward 2022, what should we look at? Before we start, I’d like to encourage you to attend three events where I am speaking that are selling out quickly this month:
- California Travel Summit, Sept 12-14, Pasea Hotel Huntington Beach
- San Diego Women in Tourism & Hospitality, Sept 23-24, Four Points Sheraton San Diego
- The Lodging Conference, Sept 27-30, Marriott Desert Ridge, Phoenix, Arizon
Operational Analysis and Review
Now is a great time to determine areas where the property is performing well and areas that are in need of improvements. A careful review of both income statement and balance sheet will help hotel owners in important decision-making regarding their financial performance, renovation requirements, staffing and more. A detailed review of all management company or GM monthly reports is in order. Do you have all the data you need to win?
Property Repositioning Analysis
Hoteliers must regularly conduct analyses to determine how the hotel is positioned in the market from the perspective of the customer and from the perspective of the hotel’s management. Conduct a physical inspection of the property including front and back of house. In addition, a review of annual tax issues and opportunities is needed as well as a reduction of property tax caused by the pandemic.
Another area of review is STR reports, guest service scores, channel management review and electronic documents including the hotel’s website. There are times when a hotel must re-evaluate STR competitors and whether or not additional third-party reports are needed. Paying for reports that are not helpful is foolish but not paying for reports that are in fact helpful is worse.
Additional hotelier responsibilities include identifying key hotel risks and developing strategies to mitigate their effects. Often times, there is no manager on duty at hotels or no plan in place for handling emergencies. Both of these conditions could present a challenge when an event takes place. These events can include medical emergencies, public disasters and active shooters as well as a plethora of unplanned events. A well-trained staff is paramount to success operationally and also helps avoid disasters and litigation.
Evaluating potential investment returns and conducting a detailed analysis of future market trends are both jobs that a good hotelier should be able to accomplish. Reviewing loan documents, assuring there are controls on hotel cash and purchases are in the wheelhouse of a good hotelier.
Check the Team
To operate a hotel today, the quality of the team is paramount. One operator cannot optimize revenues and expenses, make sales calls and handle the financial end of the business. Substantial due diligence is required to ensure the hotel has the right management, brand, renovation and business plan/budget. Hospitality has become extremely complex with revenue management, reputation management, distribution channel management, social media marketing, website development, ADA laws, risk management, human resource management and myriad technology changes.
It is still a great time to be in the hotel business, despite the pandemic. One of the fun parts of evaluating a hospitality business is the chance to install new state-of-the-art technology, institute new concepts and logistics and make changes that truly take advantage of the changing consumer profile. After this grueling summer, it is a chance to meet with the team, thank them for their hard work and give them a gift card, bonus and/or luncheon or ice cream social. If they stayed with you through this summer, they deserve it.
I leave you with a thought about what inning we are in as many industry pundits like to use the baseball game analogy – prior to the pandemic, we were in the 9th inning, going into extra innings. The game got stopped due to rain, er, Covid-19. Today, it is a new game, top of the first inning. Build a solid business plan and budget over the next month or two! May we raise our glasses to a stronger than expected finish to 2021 and a great 2022!