Mr. Burchard

Executive Leadership

2010 is Finally Here.. What Will Make it Different From 2009?

By Shaun Burchard, President, Meridian Hospitality Group, Inc.

Unless you were living in some desirable alternate hospitality industry universe, you’re not sorry to see 2009 come to an end. You probably don’t want to see another article detailing the “unstable” economic environment, or open two news sources only to see that for the 12th week in a row, one says everything “should be” getting better “soon” (what exactly does “soon” mean?) while the other says you should strap in for another undefined wave of economic upheaval.

So what are you supposed to do? A respected mentor of mine once told me that the only way to secure the future is to take charge and ownership of it. I suggest that is the only way out of the misery of 2009, and I would further suggest that it is much more of an undertaking than most would care to admit. It requires, after all, that we take a long look at what we’ve been doing and make a conscious, committed effort to do many things differently going forward. A “paradigm shift” is in order for many, but fortunately for the few that will dare to be self-aware; most will just keep hoping that it gets better. Hope is not a strategy. Is “cutting costs” alone the answer? Absolutely not. Is increasing revenue the answer? Always, but how? Alignment and smart hard work are the keys to your future success. Strategic and deliberate alignment of both your top-line and bottom-line strategies and initiatives is critical to your performance in 2010 and beyond.

The series of articles I will present over the next year is designed to help you achieve change at a fundamental level. The steps I encourage you to take will not only improve your hotel’s performance in the short-term but also position you for greater success and resiliency in the next (and inevitable) economic downturn if - and only if - you are truly committed to them.

How then to insulate yourself from the conditions around you? The following list of key result areas will give you things to think about, and the supporting articles will flesh them out in greater detail.

1. Check Your Ego at the Door

It is not the same game it was just six months ago let alone two short years ago, and just because you have been successful (at something) or even at the hotel game at some point, doesn’t mean you can “do what you’ve always done” and continue to be so. I’m sure that you have heard that the very definition of insanity is repeating the same actions while expecting different outcomes. If you want to change your results, you have to change the rules and how you apply them. Doing what you’ve always done will get you the results you’ve always gotten. Period. Discount? Don’t discount? Increase value (that one always sounds good but what does it really mean)? Who and what to believe can define your success or your continued struggle. Be open to learning and to adapting to a rapidly changing landscape or get left behind.

2. Like Any Building, It’s the Foundation That Counts.

Think in terms of both brick and mortar and building success (winning the game). What is your definition of “success?” Do you know? Do your leadership teams and associates know? Are you aligned at all levels, and what have you done to incentivize your leadership teams and associates to take you there? If you’re unsure of the answers to any of these questions, you cannot possibly succeed in any condition let alone the current economic environment. If you cannot or have not clearly and consistently communicated the definition of success to the team, you cannot win. If, as I have seen many times, the “win” is a constantly moving target, you are equally doomed to fail. Improve Revenues. Cut Costs. Increase NOI. Reduce Turnover. Improve Guest Satisfaction. These agendas do not exist in vacuums and cannot be achieved without real impact on the other agendas (not to mention the Guest, who so tragically gets lost in translation all too often), but rarely do we take the time to strategically understand the complete picture and identify our plan of attack having thought through all potential impacts in the long-term. “We simply don’t have time,” you say? When do you make the commitment to get it right? Now is a prime opportunity when you can still be on the front end of this latest recovery.

3. Do I Have the Right Tools to Get the Job Done Right?

Sounds simplistic enough but you’d be surprised. What is your budgeting process and how reliable is it? Is it designed to support success in your hotel or to impress lenders? How does your process develop and ensure buy-in from your leadership team and associates knowing that you can’t win without them? How does your hotel stack up competitively in your market? Does your hotel offer a value-based experience or is it simply a travel commodity in the sea of hospitality mediocrity? The sad truth is that your team doesn’t need to work that hard to be exceptional because so many hotels are marketed, sold and operated so poorly. How timely are your data and the resulting decision-making apparatus that should allow you to maximize your understanding and more importantly, the impact of your actions based on that data? Budgets, brick & mortar, real time (preferably) profit & loss statements, risk assessments, time-keeping systems, and associate benefits are just some of the tools you need to consider improving to improve your chances to consistently win in this environment.

4. Do I Have the Right Team to Win the Game?

An extension of #3 really but focused solely on those that deliver on your brand promise. This question is always uncomfortable, primarily because we tend to ignore what we can’t see in our profit and loss statement; however the quality of our team and the oft hidden costs of building and refining it are present in every line of the P&L. The current state-of-the-industry demands that you employ the “Three E” methodology with your associates (a future article will elaborate on the Three Es), and my safe bet is that many of you are doing one “E” and possibly two but that very few hotels and hotel operating companies have all three in place. In business, two out of three can be fatal.

5. Am I Operationally Sound and Sales & Marketing Savvy?

This may require a refresher course in Item #1. Quickly, how many different books on customer satisfaction and loyalty have you read in your career? How many can you find at Amazon.com? Same exercise – different discipline: Sales & marketing books in which you’ve searched for answers? Recommended your Director of Sales read? How much of what you’ve read have you implemented, measured, adapted and/or refined? Can it be so different from one industry to another? Can it be that different from market to market and hotel to hotel in those markets? Of course! And of course not. What are the cornerstones of success? How do you make them an everyday part of your performance culture?

What separates two of my favorite companies (Starbucks and Apple) from their competition and how can you emulate and replicate what works for them in your hotels? Simple things really - IF (there’s that word again) you’re committed to being better than your competition at every opportunity, if you’re committed to being not the “first choice” but the “only” choice for your customers, and finally, if you’re also committed to being the “employer of choice” in your hotel market. If you’re committed to challenging yourself to produce more “wins” and better outcomes not only for ownership and the bank but also for yourself and every member of your team.

Alignment. Walt Disney said: “Of all the things I have done, the most vital is coordinating the talents of those who work for us and pointing them toward a certain goal”.

We work very hard to make the hotel industry more complicated than it needs to be and in doing so, we are wildly successful. Right now, there is so much “noise” about increasing revenues (or maintaining revenues, which in the current environment is as valuable as increasing them!) and cutting costs. There is a focus on statistics I have rarely seen in 23 years (tell me, how much electricity can I buy with my A.D.R. or my occupancy percentage)? Nowhere though, is there a manual on how to balance the top line with the bottom line by aligning my talent, my tools, my people and my processes to work smarter and harder than my competition who is quite possibly just “hoping” and waiting for things to get better (or better for you, taking one of the “low hanging fruit” approaches like cutting expenses by 10% in all cost centers). It is my intent to help you quiet the noise and learn how to build success from the beginning, speed your recovery from the year that was 2009, and better insulate yourself when the next (and inevitable) downturn hits. Stay tuned…

Shaun Burchard, a hotel professional since 1986 and a Certified Hotel Administrator, is President and Operating Partner of Meridian Hospitality Group, Inc., a hotel performance company delivering superior hotel results since its formation in 2004. Mr. Burchard and his partners at MHG have built the company from a single distressed hotel to operating more than 26 hotels across the country including brands with Hilton, Marriott, IHG, Choice, and Best Western. Find/follow Shaun and MHG on Facebook by searching "Meridian Hospitality Group" and on Twitter at "MeridianHotels." Mr. Burchard can be contacted at 618-531-5177 or sburchard@shaunburchard.com Extended Bio...

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