The dangers ahead for independent hotel owners

“Skate to where the puck is going, not where it has been!”

Walter Gretzky, the most famous Canadian ‘Hockey Dad’ and father of the ‘Great One’ Wayne Gretzky, uttered those wise words of advice when coaching his young son on the small backyard rink behind his house in Brantford. We all now that the young boy grew up to be the best hockey player in the world, and much is due to his father who taught him not only how to play, but also how to think ahead in the game.

He died earlier this month and reading his famous words in the glowing obituaries got me to thinking about how they relate to the hospitality industry, and the dangers ahead for all those independent hotel owners and operators who do not “look to where the puck is going”.

It is now a year since we were impacted by the Corona, and with the widely available vaccines, there is a bright light at the end of the tunnel. The time left to reopening is shortening by the day, and many countries expect travel and hospitality to open almost fully by the summer, perhaps early autumn latest.

Of course, there is still time to plan for the day when hotels can get up and running well, but the time is short. I suspect that many owners and operators have cut to the bone, saved ‘beyond the red line’ in all aspects of their operations and have neglected to take care of the properties while corona ruled.

I read a recent article in the New York Times about the neglect of restaurants by owners in New York. Owners just shuttered their establishments and just shut down ‘cold’. Employees were let go, inventory thrown out, electricity turned off and the doors locked.

The result was that rats and mice took over and infestations are rampant. Reopening will take that much more time and investment and will leave many behind in the race to catch up when restaurants reopen. Those restaurant owners and operators who budgeted just a little to keep their establishments clean and in working order will win the race to get ahead and attract clients. Those who had even more money will have used the downtime to make changes, perhaps even renovate in advance of reopening.

Hoteliers who have just shuttered their doors and neglected their properties will be far behind the pack when the time comes to reopen. Indeed, I believe that they might have ‘fatally’ neglected their hotels to the point of bankruptcy. I fully sympathise with those who have cut down all expenses, but there is only so far that you can go without endangering the stability of the operation and increasing the investment necessary to reopen fully.

So, what is an honest hotelier to do?

Firstly, when hotels are at extremely low occupancy, there are steps that are taken even without Corona to save expenses. The first expense to be cut to the minimum is human resources. It is also here that danger lurks. One cannot dismiss all staff, especially in the maintenance and housekeeping departments.

As with a house that is left empty (and New York restaurants), so a hotel can go downhill fast without minimum care, upkeep, and cleaning. One cannot shut down reservations without ignoring future clients and allied travel agents. You must keep contact with your loyal client companies and keep lines of communication open with travel agents and the all powerful OTA’s.

There must be a clear strategy in place that will timeline the start of the ‘ramp up’ to smooth reopening. This will include a deep clean of the property, including the back of house and all guest areas. Maintenance must step in to touch up paintwork, repair rust and check room systems such as the hot water, the AC and electricals.

The main hotel systems must be checked for preventive maintenance. Kitchens should be deep cleaned, and equipment readied for cooking to restart. A training schedule should be planned to make sure that operating policies are set back in place for good service and great guest experience. In short, the strategy should be a complete one that is similar to actually opening a new hotel.

So that will take care of the property operations, but what about the sales and marketing?

A savvy operator will have continued communications and contact with the travel agents, loyal corporate and individual clients. Yet this may not be enough in the cutthroat competitive world that is modern hotel business.
Everyone agrees that the future lies in online reservations, and more and more reservations will be done on mobile phones.

Today direct hotel reservations are at around 20% of all reservations, and this leaves a lot of room for improvement for hotels. The OTA’s take a big bite in the reservations battle, which means commissions of up to 20% and more. Some owners and operators believe that it is enough to have an OTA send you the bulk of your business. What they do not realise is that dependence on the OTA’s at the expense of your own sales and marketing is a recipe for disaster. In fact, it could lead to a threat to survival.

The experts, if we are to believe them, point out that the future is digital. Reputations are made or broken on the internet. The hotel website and its strength in attracting potential browsers and turning them into clients is gaining and is now of paramount importance. I do hope that my colleagues will prepare their properties as they should, especially those who are independent owners and operators.

A creative website is so important in keeping the browser and potential guest on your website. Having piqued their interest, it is an advantage to allow for a direct reservation from the website. Even better, a truly creative and interesting website will allow for ancillary revenues by selling events and features in and around the hotel by using AI and sites such as ‘Bridgify’ who are working wonders to keep and attract extra revenues.

It is no longer good enough to sit back and wait for reservations, especially if you are an independent operator, whether operating under franchise or truly independent. Reliance on the OTA’s is out of the question, as is relying solely on your marketing and sales team.

The big brands have created ‘Commercial’ executives who are above the existing marketing managers and oversee all aspects of the marketing and sales and direct the digital push to capture as much as possible on the net.

Professional websites can cost north of $40,000 to develop and even more funds to maintain monthly. Many independent operators simply cannot afford these sums and are destined to lose a lot of potential business to those with deeper pockets.

Stephen W. Ayers is a consultant to the hospitality Industry. To inquire about his services, email ayers.stephen@ymail.com for more details.