The 3-Minute Guide to Managing a Successful Business Center:

Why are most business centers not profitable?

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. October 14, 2008

April 17, 2006. During my decade-old passion for helping international properties with their automation needs, particularly in their business centers, I have come to learn a public secret of global hotels and resorts firsthand. Most in-house managed business center services generate only losses and are maintained just as loss-leaders in an attempt to attract more business travelers.

These losses are startling considering that never before has the technological amenity called the business center, which historically has been over-promoted and under-used, received as much attention as in the past five years. Last year, Hilton, obviously acting on this growing popularity, issued an internal memo property-wide to request all its hotel and resorts to put 24/7 business centers in place.

This renaissance of the business center is pushed not just by business travelers, but also by pleasure travelers, openly addicted to the popular "You have got mail!" prompt. So the $100,000 question is: How can a service that is growing in demand so dynamically still be so unprofitable? The answer is closely related to a mental trap that we sometimes, as managers, fall in.

Sometimes, in our minds, we change the popular Home Depot slogan "You can do it. We can help," into "I can do it. I need NO help." Particularly if a project looks similar to other projects we have successfully completed in the past, we may start suffering from mental myopia and fail to clearly see the often minor but critical differences between apparently similar projects.

Remember Michael "Air" Jordan, recognized by many as the greatest basketball player of all time? After retiring from a highly successful career in basketball, Jordan rationalized in 1994 that baseball, like basketball, is just another ball game and concluded that as an athlete he could probably excel at this sport, too. Well, as you probably already know, just one year later it was very clear to the basketball superstar that although baseball and basketball are indeed both ball games, the key to succeeding at one is not the same as the key to succeeding at the other. In 1995, Jordan returned to basketball after failing miserably in his brief baseball career. An obvious case of mental myopia.

Similarly, at face value, setting up a new business center looks very similar to setting up a new office for, say, the Accounting or Sales & Marketing department. We may confidently accept the project, plan the details, and start to delegate. We have maintenance renovate the room and set up the newly purchased computer furniture, and we have the IT department put in the new computer equipment and enable an Internet connection. Finally, we bring in part-time or full-time business center attendants, and we have them supervise the use of the equipment and charge for the service.

It is this last ingredient, the part-time or full-time attendants, that makes most business center so unprofitable, despite recent growing demand for these services. People and their skills and contributions are the single most valuable asset in any organization, particularly in the hospitality industry. At the same time, their salaries, benefits, and administrative costs are likely to be the highest business expense in almost all departments and definitely in service departments such as a hotel business center.

But is it indeed possible to provide a business center service without employing attendants to attend, supervise, bill, and collect for the service? Absolutely! The key is automation. According to a popular Internet dictionary, automation is the act of replacing human workers with machines. So an automated business center operates on a self-service basis without depending on any employees for its daily operation. A fully automated and self-service business center is the key difference between a profitable business center and an unprofitable one.

By using the latest technologies on the market, you can set up a fully automated business center where guests can work on documents, make printouts, surf the Internet, send emails, and even copy and fax in a fully self-service setting with zero employee intervention. If you set up an automated business center properly, you can convert a service that is generating only expenses and guest complaints into a successful and even profitable amenity for your guests.

According to ePaynews.com, a website specializing in news about payment acceptance in retail services, nowadays everybody realizes the potential of converting manual, employee-dependent services into fully automated retail services. On its website, ePaynews confirms that self-service gas stations and laundries have been providing fully automated service for some time, and now movie rental stores and fast food restaurants are also joining the crew. Think about this: If a computer can be programmed to automate the vending of snacks, hamburgers, gas and movie rentals, they certainly must be able to vend themselves, too. This is exactly what happens in a fully automated business center.

Automating your business center, even if you are providing the service for free, unquestionably results in more convenience for your guests. The service can be provided 24/7 (twenty-four hours per day, seven days per week), meaning that the service is available literally anytime the guests want to use it. Also, almost all activities performed by the guests in the business center are private, and not having an attendant witness these activities translates into a more comfortable experience for your guests using the business center.

Automation of your business center benefits your property, as well. By far the greatest benefit is the savings in payroll in this department. Also, if your property is providing the service on a pay-per-use basis, automating the service will reduce the potential for staff theft of the revenue generated by this service, as the collection of payment itself also becomes automated. Also, providing the service 24/7 will result in increased usage and satisfaction because the extended service availability will result in more guests being able to access the service at their convenience.

So the $100,000 answer - the key to a successful business center - is full automation of business center services with little or no dependence on employee intervention. Anytime you automate a service, even if it means replacing a human being with a machine, as long as it results in more convenience for your guests, you are creating more value for both your guests and your property. The disadvantage of not automating your business center is analogous to using an old-fashioned escalator instead of a modern elevator in a 20-floor property. It has a negative impact on efficiency, expense reduction, service quality, and time saving efforts, and it will certainly result in unnecessary frustrations for both your guests and employees.

As you would normally do for the acquisition of most technological services, it is important that you and your team determine in advance whether you want to outsource the service or acquire the solution for in-house exploitation before you start requesting proposals. To make the automation of your business center a reality, you can work with do-it-yourself vendors, consultants, revenue-sharing operators, and turn-key solution providers. The extent to which you want and can manage the services in-house will determine whom you should contact for help to make your automated business center a successful reality.

Sergio Laurant is the founder of Cyber Oasis International, a five-year-old venture specialized in consulting and implementing automated business centers, Internet caf'es, and Internet kiosks for the hospitality industry. Sergio Laurant has successfully consulted with both independent and brand properties, including market leading hotels such as Hilton, Marriott, and Sandals Resorts. Sergio can be reached at [email protected]