Mr. Belmonte

Human Resources, Recruitment & Training

What Have You Done For Your Hotel Employees Lately?

By Steven Belmonte, CEO, Vimana Franchise Systems LLC

I recently read an article written by Ron Huxley, a child therapist, titled "Moral Development of Children: Knowing Right from Wrong." In the article, Huxley told this story: "On my way to work one morning, I witnessed a heart-warming event. A group of elementary school girls were running down the street, laughing out loud as only little girls can. At first, I thought it was just the innocent giddiness of young children. Then, I saw the girl running behind them. She was a larger girl, desperately trying to catch up, and yelling for them to stop. As I past them, I looked back in the rearview mirror to catch one last glimpse of the cruel situation. To my surprise, I saw one of the girls who had been in the front, stopped on the sidewalk, waiting for the other girl to catch up. As a parent, I wanted that to have been my child, if a similar situation ever presented itself to them."

Let's look at this scenario from a hotelier's viewpoint. How often do you as a hotel owner or manager stop to help an employee who may be struggling to keep up with his or her day-to-day tasks? What have you done to motivate the employee who simply doesn't care about doing a good job or going the extra mile to please a guest because it's just a job, a way to collect a paycheck?

Perhaps as you read this you are saying to yourself: "Why should I bother? Industry indexes show that turnover can range from between 100 percent to 150 percent annually. Why invest my time in an employee who will just turn around and leave soon anyway?"

Here's one reason: A guest loyalty study conducted by the Cornell University School of Hotel Administration on "understanding the differences between switchers and loyal 'stayers' found that STAFF ATTITUDE was directly correlated to the overall satisfaction level of guests, and therefore the propensity for loyalty."

So how do you build a satisfied and valuable workforce with a positive attitude? You do so first and foremost by showing your employees that they are important to you. Mentoring is one way: Growing people in their jobs, people who have pride, who really care, and who will develop into new leaders for the future. Offering financial incentives and voluntary benefits programs to employees is another - and it may be a quicker, more readily accepted way to build employee loyalty.

Help Uncle Sam Help Them... and You!

One of the best-kept secrets in the hospitality industry is that billions of dollars in government-based "Employee and Employer Tax Credits" go unclaimed every year for no other reason than businesses simply don't know the programs exist.

IRS Earned Income Credit Laws are enabling hotel owners to put more money in the pockets of their lower-paid employees with no risk and no upfront cost. In many cases, participating in employee tax-credit programs can result in increasing a line-level employees' take-home pay by as much as $130 a month.

This newly discovered source of revenue could result in providing better voluntary benefits to employees and thus, decreasing employee turnover. It's already working for two hotel companies:

Ash Patel, President of Southwest Hospitality and current Treasurer of the Asian American Hotel Owners Assn., recently enrolled five of his properties in a tax credit program. Subsequently, 26 employees were identified as being eligible to participate in a voluntary benefits program.

"Participating in the Tax Credit program was simple and successful. We expect to receive at least $12,000 in annual tax credits for doing absolutely noting but hiring outstanding line-level employees," Patel said. "In turn, a number of our employees are now going to receive an increase in their monthly take-home by as much as $40 to $130 per month, and some have opted to use that money for supplemental disability insurance and limited benefit health insurance. Previously these benefits were not available or affordable."

Mike Patel, President of Diplomat Hotels and past Chairman of AAHOA, enrolled six of his hotels in the same program. Patel said he expects to receive about $25,000 in annual tax credits, and 44 employees enrolled in supplemental voluntary benefits programs.

"How can anyone say 'no' to receiving money for doing absolutely nothing?" Mike Patel said. "You'd be surprised how investing just a little bit of your time to launch the program will reap such a big reward-both monetarily and in employee loyalty and satisfaction.

"In today's employment crisis, making programs like this available to our employees really brought them together," he said. "It showed them that we genuinely care for our employees' welfare. In return, our employees told us that they really appreciate the opportunity to finally have the supplemental benefits they've needed for so long but previously could not afford."

As Ash said, participating in a Tax Credit and Voluntary Benefits Programs is easy. All paperwork is managed off site by a third-party administrator. A liaison company will work on behalf of the owner to identify and maximize the tax credits to which a hotel and its employees are entitled.

Here's how the employer tax-credit program works. A tax-credit administrative company will work with hotel owners to identify which properties qualify to receive tax credits based on the eligibility of its employees. Employer tax credits are based on Welfare to Work, Work Opportunity and Enterprise Zone government tax credit programs.

Consider the following: If just 10 hotel employees qualify for one of these programs during the year, a hotel's potential tax credit is about $24,000. If 50 employees qualify, their potential credit is $120,000, and if 100 employees qualify, the potential employer credit provided to a hotel company is $240,000!

Getting and 'Keeping' Good Help

This industry of ours is the last one where a formal education is not required for professional advancement or financial success. I'm living proof.

I started in this industry at the age of 16 as a desk clerk in Chicago. I never went to college. Instead, through pride, hard work, persistence, a desire for self-improvement and a willingness to watch, listen and learn, I was able to succeed.

Over the past 30 years I've had the fortunate opportunity to serve within the hospitality industry as an owner/operator, franchisee, franchisor, brand President/CEO, and head of one of the largest hotel management companies. What I've learned firsthand is that every person, in every department, who works at every type and size of hotel, can make a difference to the success and failure of your business.

As industry leaders-from CEO's down to property general managers-we need to tell our people about the possibilities that await them. We need to do more mentoring, to teach our people about this business-the people business-that we're all in.

Remember: Somebody-a teacher, a coach, a parent, the parent of a friend, a boss-was there for you. Likewise, someone taught that little girl in Ron Huxley's story that it wasn't right to run ahead and make fun of her slower peer, but to stop and let her catch up.

That's what mentoring and quality leadership is all about: Growing people in their jobs, people who have pride, who really care, and who will develop into new leaders for the future.

Your business depends on great guest service-and great guest service depends on your leadership and instilling pride in your people and motivating them to do their job better than your competitors. In the end, THAT determines the extent of your financial and professional success.

If you can provide some financial motivation to your employees along the way - at no out of pocket expense to you or time to implement the programs firsthand - DO IT. The bonus is that not only will you succeed, but you will have helped someone else do the same. And that's something to be proud of.

Be there for somebody coming up in the business. Do what you can to motivate and nurture your employees. AND, participate in any and all programs that will put money in the pockets of your employees!

My good friend and industry leader Roger Bloss, president of Americas Best Value Inns, probably said it best: "I don't know why any hotel owner or brand manager would elect to do nothing and walk away from an untapped source of income for their hotel and their employees. It's a no-brainer."

Vimana Franchise Systems LLC is a hotel franchise company owned by CEO Steve Belmonte, President Neal Jackson and Vice President Cory Jackson Jr. In May 2011, Vimana Franchise Systems launched the Centerstone brand as a three-segment franchise designed to create a fair and cost effective model for the hospitality industry. In November 2011, Key West Inns was re-launched under the Vimana Franchise ownership umbrella as a fun and uniquely themed leisure brand. For more information on Vimana Franchise Systems LLC, contact Steve Belmonte at (407) 654-5540 steve@vimanafs.com. Visit Vimana Franchise Systems online at www.VimanaFS.com. Visit Centerstone online at www.centerstonehotels.com, on Twitter at @Centerstonehtls, or on Facebook at www.facebook.com/Centerstonehotels. Visit Key West Inns online at www.staykeywesthotels.com, on Twitter at @StayKeyWest, or on Facebook at http://www.facebook.com/staykeywest. Mr. Belmonte can be contacted at 407-654-5540 or steve@centerstonehotels.com Extended Bio...

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