Are You Ready for the Upturn?
By Brenda Fields Founder, Fields & Company | June 18, 2010
The industry is just starting to wake up after a long, cold winter! And the good news is that industry experts are predicting better results for the remainder of 2010 and for 2011 than previously forecasted. "STR predicts 2010 occupancy to increase 1.9 percent to 55.8 percent, average daily rate to decrease 2.3 percent to US$95.45, and revenue per available room to end the year virtually flat with a 0.5-percent decrease to US$53.22. Supply in 2010 is projected to grow 2.2 percent and demand is expected to rise 4.1 percent" as published in eHotelier, April 12, 2010.
In all likelihood during these unprecedented economic times through out the world, it was very difficult for the owner/manager to know what steps to take to reverse the downward trend and to simultaneously positively impact the bottom line. Most hoteliers cut expenses as a first step followed by cutting room rates to generate demand. The expenses cut were most likely in the areas of staff reduction and property maintenance. But did they strike the right balance of those two measures to ensure the desired results for the short term without compromising the long term? Now that business is slowly coming back, why wait to ensure that your property is ready to compete for market share. The adage, "You play the way you practice" is never more true than now. To ensure that your property is poised for success when business demand returns, now is the time to address some key areas that will distinguish your product and services from the competitors. Waiting for the business to return before implementing changes may be too late. This article will provide a few reminders to make sure that your property is poised for success when business is back.
This may seemingly be an obvious or unimportant issue, but without a firm understanding of your position in the market place, decisions made to cut costs can have a powerful impact on your business. A five star hotel that has not offered five star services, will be hard pressed to justify rate increases when business returns and will be hard pressed to expect customers to return after receiving a guest experience that was less than industry standards. Guests remember if service was spotty or inconsistent and if rooms were dirty and in need of repair regardless of what they were paying. And meeting planners may have enjoyed the low rated conference packages they received during the poor economic times, but will think twice about returning to a property that did not meet their expectations. A low price will not compensate for faulty AV equipment, late coffee breaks, or absent service staff when needs arose. Consistency develops trust and trust develops into guest loyalty. Even in difficult times, decisions can be made to reduce costs without jeopardizing the position in the marketplace.
Staffing and Training:
During the downturn, many positions were eliminated and some job functions either disappeared or were combined with other positions. Unless there was a plan in place to address the areas that were impacted, more often than not, a service or a function just was not provided. And again, the end result was a disappointed guest who will find another place to stay upon his/her return trip. So rather than wait for business to increase before this is addressed, why not be proactive and create and implement a plan to identify all areas impacting the guest experience from answering the phone, making reservations, check in and check out, and room service, to name a few. Set standards based on reasonable expectations relative to guest expectations and operational issues, communicate that to the staff, and train on an ongoing basis. Waiting until business is there to justify the expense or effort will be too late.