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Strong Brand Partnerships Are Vital to Today's Franchised Hotel Operations

How Will We Navigate the Evolving Economics of Ownership?
Fouad Malouf
Fouad Malouf
HNN columnist
September 7, 2021 | 2:39 P.M.

The COVID-19 pandemic, not quite yet in our rearview mirrors, has brought greater focus to several important hotel operating issues that were already of concern. These include implementation of platforms and technologies that will help reduce operating costs while introducing meaningful efficiencies, as well as adapting to the labor shortage.

This is a tall order, especially with the imperative to preserve or even enhance guest satisfaction in whatever we do. However, we have already seen how the hospitality industry is responding creatively and cooperatively to these issues, strengthening franchise relationships in the process.

A Cost-Driven Industry?

Clearly, the quest for maximum occupancy, daily rate and total room spend are always important. However, while brands across many property types have for some time been looking to develop hotel platforms that are less costly to build and, thus, finance, we are seeing an even greater focus on cost to operate. These initiatives include adjustments in square footage or use of materials that are easier to keep clean, especially important these days, which should relieve staffing pressures.

Even pre-pandemic, we were seeing more use of walk-in showers, as opposed to tubs, or less use of carpet to promote easier and faster cleaning and maintenance. This focus increased during the pandemic as capital-expenditure reserves were strained. Overall, we may see a slowdown of the CapEx “creep” that had been occurring in recent years, even within the economy and limited-service sectors.

At the same time, the industry as a whole is testing and implementing new technologies that would be expensive for individual operators to study and develop on their own. Again, the goals are to introduce new efficiencies and potentially reduce, not eliminate, staffing requirements. Keyless and remote check-in and guest chat systems are the most prominent right now. However, a wider range of technologies is also being studied in operational areas like preventive maintenance, food and beverage operations or guest dispute resolution.

Adapting to the Labor Shortage

It’s not a mirage. A September 2020 report from the U.S. Bureau of Labor Statistics highlighted that employment and real output growth is projected to slow from 2019 to 2029. “One in four people will be ages 65 and older in 2029, contributing to slower projected growth in the labor force and a continued decline in the labor force participation rate.” That aging population also increases demands for health care and related services like home care or retirement facilities, a competitor for labor along with retail, restaurants and distribution. Overall, less than one half of 1% annual growth in employment is projected for this 2019-2029 decade.

What are we to make of this? Right now, brands can help franchisees in the all-important areas of worker recruitment, training and retention. Technology is helping with broadcasting for positions, including today’s newer online portals; screening and processing of candidates; and training and career development programs. Brand training is a great foundation for individual operators to build onto and technology helps us ensure that all applicants and staff are treated equitably.

From a labor utilization perspective, out of necessity, the pandemic brought cross training to the forefront as a valuable, ongoing strategy that provides operational flexibility and promotes staff engagement and career progression. Dual branding and even sharing staff among multiple-owned properties in a geographic location are other modes that can leverage existing staff and training.

This is also the time for traditional human resources “blocking and tackling,” getting involved in the host community through friends and family type recruiting, job fairs; local schools and colleges; and chambers of commerce and convention and visitor bureaus.

Last, on a broader scale, the hospitality industry can continue to advocate in the interest of franchises for regulatory and legislative matters, including the H-2B visa program, as well as career attraction and development programs. Great examples of the latter are the American Hotel and Lodging Association’s “Hotels are Hiring” ad campaign and its AHLA Foundation apprenticeship programs.

The pandemic highlighted the value of the franchise brands, in everything from implementing new cleaning and sanitation protocols to rethinking operating cost structures, as we shared strategies and ideas. This is what we still need going forward.

Fouad Malouf is senior vice president of franchise operations at Red Roof. Fouad oversees locations in the U.S. and international markets, leading the franchise operations team in their day-to-day business and supporting the franchisees. He also serves on the Red Roof Brand Standards Committee and plays an active role with the Red Roof Franchise Advisory Council.

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