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Email: SamPerks@SamPerks.com

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© 2018 Sam Perks

COMPASS

1200 E. Las Olas Blvd.

Suite 103

Fort Lauderdale, FL 33301

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What Hotels Should Do Right Now



There is no question about it. Hotels are hurting right now, and hotel owners are naturally frightened of what the future is going to look like. COVID-19 has caused the entire planet to essentially pause, and while some are enjoying the days off, and others are filling out unemployment applications and looking for new work, the boutique hotel owner sits in their office praying for survival.


The fear is warranted. In Nashville, more than 235 hotel focused conferences had been cancelled as of Monday. That equates to more than 180,000 room nights and $96 million in direct spending. Those are no small numbers, but they pale in comparison to the impact that this pandemic has wrought on Florida. A recent report estimated 88,631 direct hotel related jobs lost, and 305,146 jobs lost which support the hotel industry. I find the scale difficult to conceptualize. In a matter of weeks, a number of people four times the metropolitan population of the city I grew up in all lost their job.


As a manager of boutique and mid-sized hotels, I knew that my staff and I would have to get creative, and quickly. We did just that, and I want to share some advice to my friends in "the business" that has worked, is working, and is expected to continue working for my company.


Be The Leader

First, I knew that as the executive of the business, it would be my role to set the tone for everyone else. If my employees did not have confidence in me, they would not have confidence in the organization for which they are working. If an employee doesn't have confidence in their company, their productivity, drive, and loyalty are completely gone. At that point, they may as well not even be there. So, early in the timeline of the mounting crisis, I made my general plan for how we would handle COVID-19 if it were to become an issue that materially impacted our business in a negative way. I made a list of priorities and objectives for each property, and expanded them to the limit of my ability at the time. The first priority was simple: employees and payroll are the last expenses we will cut. I appreciate that the same may not be the best decision for every business, but it was a priority for me. My business IS my people. They are my family, and they aren't replaceable to me. If we had to let them go, it would be because we were going out of business.


Luckily, we have actually hired people in the middle of this. It turns out that our planning and creativity has payed off. However, the point I am trying to make is that the executive sets the tone. If you have employees, it is never too late to step up and show them that you are in charge. Anyone can be in charge of discipline, delegating unpleasant tasks, and sitting in an air conditioned office while others work in a hot laundry room in August. Show your employees now that you are in charge of leadership. Leaders eat last. Leaders show the team the right path and they walk in the front of the line. They calm the fears of the people beneath them in rank, and the inspire hope when hope seems lost. My first suggestion is that hotel owners give themselves permission to be in charge of leadership, if they haven't already, no matter how late they are at arriving there. When I informed my employees that they would continue receiving their paychecks, and I expected to continue seeing them at work, and that was going to be the case indefinitely, the attitude and energy accelerated to a place it has never been before. The question was certainly on their minds. Now it isn't, and that allowed them, and us as a team, to focus on how we were going to succeed together. Many of the remaining points are suggestions birthed from this.



Do Your Own Job

My next suggestion is more about what you should NOT do, in a way. Everyone who works with me knows that I am entirely unafraid of rolling up my sleeves and getting my hands dirty. I always remind people in my organization that it is wrong to ask anyone else to do something that you wouldn't be willing to do yourself, or won't do with the person receiving the directive. Even today, I was pouring a concrete footing and running Cat6 cables through an attic for a new security system my maintenance crew was installing. If I see trash in a parking lot, I pick it up. If I see weeds growing in the planters, I pick them out. There is a caveat to this, though. I don't take on other people's job at the expense of my own. As the managing hotel owner, you have an important role; a necessary role that your business can't do without. Employee moral suffers when the boss is a lazy authoritarian; but even worse, the whole business and everyone in it suffers when the boss's seat is vacant. You need to be forming strategic relationships with other business owners, finding and correcting shrinkage in inventory, studying pricing strategies, monitoring online reputation, steering operations to align with your business plan (or drafting a business plan if you haven't already), obtaining better credit card processing rates, developing systems to increase yield...the list goes on. I'm never afraid to get dirty, and I never let small tasks distract me from what I should be doing with inauthentic excuses. The traits balance each-other well.


Sell More Stuff

When was the last time you thought about something other than room rates, as a serious source of revenue for your business? Sadly, for many hotel owners, the answer is: "not recently." You have one of the best captive audiences in all of business. You can design every aspect of your customer's entire environment for 24 hour and often much longer. They fall asleep, and wake up encapsulated in a space that is completely designed by you. Do you think your guests are staying at your hotel because they have no where else to go? It certainly would have been cheaper to stay at home. They are in your "selling capsule" most often for vacation or business. Either way, they have money to spend and they want to spend it. Our Hospitality Management Division has monetized almost every aspect of the properties we manage, and we are constantly finding more ways to do it. Often (not occasionally, but often), we have increased guest spending at our properties to a rate that is higher than the cost of their room. There is no question that hotels are going to have less guests than they are used to for a while. It's a fact, and you can't do anything about it. So, what can you do? Sell them other things! You are the tour director while they are here. This tip alone, if properly implemented, can turn your business around.


Expand Responsibilities

I have already expressed my affection for my employees, but I must admit that I don't always have the same affection for my vendors. Everyone has a business to run, and I never like to see anyone lose business. Still, if I can efficiently do something in house, I usually will. Now is a great time to start experimenting with your employees capacities and skills. Here is a great example: one of my housekeeping staff members told me that she was so bored at home each evening "social distancing" herself, and she would rather be back at work. I asked her if she would like to have some work to do when she gets home, and she was quite excited about the idea.


This particular woman speaks Spanish as her first language, and I speak Spanish as would a Guatemalan 1-year old (actually that's not a fair comparison, an average Guatemalan 1-year old is probably better at Spanish than me). Together we had the idea that she could start calling all of our company's previous Spanish-speaking guests, and invite them to make a future reservation. Asking for business is an amazing way to get it. My employee took this one step further. She researched all of the important holidays within the countries that our Spanish-speaking past guests live within, and marketed a vacation special specific to those cultural events. Each vacation package comes with food, drinks, and activities specific to the holiday. My IT person set up a custom email address for her with CRM integration, and my graphic designer made email and print assets for her to use. My housekeeper gets a bonus for selling them, she's not as bored as a prisoner in her home, and the business has increased international sales 20% year-over-year for the month of March after only trying this for a week. This economic problem made us be creative, and I'm happy it did.


Be Proactive, Not Panicky

If your hotel had no cash reserves, deferred maintenance, no business plan, and no measurable annual performance increases leading up to this pandemic, then what you had was a time bomb and not a business. It is my expectation that COVID-19 feels like a quarter-inch lit fuse for hotel businesses with the aforementioned problems, and that's probably about right. If that is your business description, you don't need a self-help article or motivation. You need professional consultancy from a professional hospitality management company like ours. In reality, you needed it a long time ago but you really need it now.





For everyone else, there is assistance available to help get you through the financial troubles you may experience, and there will continue to be more help in the near future. Make yourself familiar with all of the tools available to you. Some credit card issuers have already announced that they will be temporarily waiving interest and fees. Low-interest SBA Economic Injury Disaster Loans (EIDL) are now available for businesses negatively impacted by coronavirus. Interest-Free Small Business Emergency Bridge Loans (EBL) are available to Florida small businesses who have been impacted, and many other states and local governments are getting involved too. Hotel and Travel trade organizations are lobbying for $150 Billion in relief. The bottom line is that no one wants the travel industry to fail. You are not the only person who cares about your future success. Be focused and proactive in making sure your business can participate in these programs and relief efforts, and call our office if you need help. Whatever you do, don't crawl under your desk and hide from this, or lose focus on your business because you're too busy worrying about things you can't change. Focus on what you can change.


Win This Challenge

I have no doubt that many hotels will shutter their doors as a result of this pandemic. It is truly very sad. Life savings, dreams, and lifestyles will evaporate into thin air. We need to be on the lookout for our friends in this industry who we can support and help, even if it is no more than friendship and kindness that we can offer them.


There will also be many hotels that get through this challenge and come out the other end of the tunnel stronger and more capable than they were before. Those businesses will have been led by creative leaders who engaged their team, expanded their practices, fill the leaking holes in the ship, and paddle harder than everyone else.



For more information on how The Sam Perks Company, LLC - Hospitality Management Division can assist your business, call our office at (954) 873-1055 or email SamPerks@Samperks.com. Visit our website by clicking HERE.


As a commercial real estate specialist partnered with The Echea Group at Compass, Sam Perks assists buyers, sellers, owners and tenants of commercial property. Having spent his entire career in commercial real estate, Sam is uniquely qualified to offer assistance and advice as a real estate specialist. His background includes commercial and residential construction, subdivision development, brokerage, and property management. He has served as the 2014-2015 Chairman of the Commercial Real Estate Network, and on various charitable boards and committees. Sam is also President of The Sam Perks Company, LLC, a company specializing in the delivery of hotel and hospitality management products and services, as well as concierge property services to property owners of commercial and residential real estate.

This information in this publication has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of any property or investment. You and your advisors should conduct a careful, independent investigation of any property or asset you plan to invest in to determine to your satisfaction the suitability of the property or investment for your needs.