What hotelier doesn't feel a surge of motivation and hope when they see their net income improving?
Bill Marriott wisely said: “Take care of the employees; they will take care of the guests, and the guests will return and spend money.” This mantra, shared at the last Marriott Owner’s Conference and echoed for years, still holds.
Let's explore critical tips to optimize net income this summer, focusing on revenues and expenses.
Travel Demand Sources
There are more and more choices for travel. Artificial intelligence has undoubtedly become a factor as leisure travelers turn to various types of generative AI to find both destinations and specific hotels, restaurants, attractions and things to do. Travelers want to align travel with their passions and pick destinations and activities focused on adventure, culture and uniqueness. Experiential travel seems to be the new normal for travel, as the cost makes a standard visit seem very expensive. So why not do something extraordinary?
Climbing mountains is one of my brother’s passions, and tasting wines is one of mine. Some prefer tasting foods, while others want a spiritual experience. Wellness? Some prioritize self-care, while others may prefer a higher-quality sleep. There is no right or wrong, but offering guests a standard hotel experience only works during peak periods, and the guests do not return. If you want to fill during soft or shoulder periods, a bespoke experience might be required. This is where your creativity and innovation can truly shine.
Fitness now extends to recovery as well. In addition to pro-level workout equipment, guests want amenities such as sleep aids, quality sheets, white noise and things powered by digital health services that provide health monitoring and diagnostics. Whether healthy or plain tasty, high-quality food is popular among travelers today; let them know what is available in your dining areas, including your complimentary breakfast if offered!
Last-minute bookings are critical when demand misses the forecast mark. Revenue management is 24/7, so someone must stay updated on availability and rate structure changes!
Employee Lethargy, Burnout or Complacency
Today, leadership is paramount to success. Walking into a hotel makes it easy to see whether team members are happy to be in their jobs. Are they smiling and engaging guests upon arrival? Do they say hello to everyone who enters, even if they use the bathroom? Is it sincere?
What drives team members' engagement with the guests and their jobs in general is complex. Training is one — are they learning? Does the boss say hello to them every day? Does he or she care, or is it just a “how are you?” A sincere general manager, owner or leader can change the day, every day! Consider an early bonus before, during, or after the summer season to thank every team member for their support; this might push back any requests for a raise that seem to come up more frequently than a few years ago.
Tighten Controls, Stay Abreast of New Laws, and Keep the Property Fresh
Costs have been rising in this inflationary spiral. Guests are not the only ones paying more for gas, air, car rentals, hotels and food; hoteliers have to pay more for insurance, energy, food and labor! We must track labor carefully, review every insurance policy, and use data to support energy-saving opportunities, food-and-beverage prices, and portions.
In California, there are new laws regarding fee transparency and the 24-hour cancellation of rooms. Stay current with all laws by joining local and state hotel associations and the American Hotel & Lodging Association. One of our properties does not need a renovation, but a fresh coat of paint will freshen the look, so we are doing it. Guests were OK during the lockdowns if your property was not renovated, but not anymore, and the brands are catching up with requirements for property-improvement plans.
We will make a lot of our profits during these next 10 weeks. Let’s do it right! Have a safe and profitable summer season!
Robert Rauch, CHA, has been an owner-operator of hotels for several decades and is founding chairman of Brick Hospitality, owner of R. A. Rauch & Associates, Inc.
The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or CoStar Group and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to contact an editor with any questions or concern.