10 Tips for Sustainable Hotels in 2012 as recommended by Ian Graham, Principal of The Hotel Solutions Partnership Ltd
1. Cash management must come first. If a business is to be sustainable it must have at its heart excellent cash flow management. Are you focused on bringing forward aggressively your cash inflows and delaying as much as possible your cash outflows? Is your bank manager on board with your strategy and your tactics? Are your shareholders supportive of your dividend policy and your cash call requirements? Remember Thomas Cook's collapse started when a Rights Issue failed. Cash flow management should be at the top of all management meeting agendas.
2. Once you've invested in your hotel, your revenue goal must be to optimise revenues from the rooms. Accept no excuse. Unless you are in the middle of nowhere (and why are you there for goodness sake) you should be aiming to sell all rooms every night. Ensure your Director of Channel Management is using all the tools available to get to markets you can't through traditional means. It can be reassuring to know that your competitors are trading at the same level of occupancy as you, but your goal must be to be market leader in occupancy. A busy hotel is one that people talk about. Being in a position where your guests are talking about you, is one of the most sustainable drivers of long term success.
3. Once your hotel is as full as it can be every night, your job is to bring in excellent yield management. Close those channels and deny those segments that are the least profitable. That means focusing on marginal profit not total revenue. A tour group on full board with a low room rate may be more profitable than the chairman of board on a room only basis in the penthouse suite - or vice versa. Don't accept conventional wisdom. Think profit contribution not RevPAR.
4. With guests in house, your job is to sell them more than they knew they were originally committed to. Upsell or cross sell must become the culture of the service staff. Can I sell you one more glass of wine, or what about an upgrade to our mountain view room? We've got a couple of slots free for a massage - can I make a reservation for you? Incentivise your staff to cross sell and upsell. It's a win-win-win.
5. Sustainable businesses understand their place in the ecosystem. Visit your competitors. Stay at your competitors. Eat at your competitors. And have your sales force do the same. Understand the corners that competitors have cut in an attempt to gain advantage. Be ready to replay these downsides when comparing your offer to potential guests and customers. Be better than your competitor through factual analysis on the ground as well as intellectual analysis of market and channel trends.
6. Sustainable businesses conserve resources. They don't do things that guests and customers don't value. Why invest in a turndown service if it's not valued by your guest? If you charge the retail price of a pair of underpants in order to launder them, can you reasonably expect guests to buy your laundry service?
7. Not only do sustainable businesses not waste resources, they don't invest resource in non- value adding activities. Why invest in a minibar, its inventory and its control processes if the vast majority of your guests don't use and don't value the immediate access to its contents?
8. Sustainable businesses are businesses that respect their guests and their employees. If your guest has HD TV at home and surround sound in their living room, can you reasonably expect your guest to love you to bits if you offer them an analogue TV? If you ask your employee to change in a dirty changing room and eat an inadequate meal in a scruffy canteen, is it reasonable to expect them to deliver outstanding customer experience?
9. To survive, to be sustainable, you need leadership. That's not the same as management. Indeed I'd rather have one unit of leadership to one thousand units of management. If you don't have leaders driving your business forward and leading the separate elements of the business, then you haven't got a sustainable business. Invest in leaders, invest in leadership development.
10. Commit tips 1 to 9 to memory and share with your team - again and again!