Hospitality Financial Leadership - Chapter 7 - Lunch

The chapter below is an excerpt from my new book. It’s fiction but some of the characters and storylines are based on people I have worked with and events that have taken place in the hotels I have worked in. The book is a fable about a hotel manager who has some very bad habits. He must change in order to survive and the book takes him and you through the lessons needed to be a great hospitality financial leader. I’m writing ahead each month so I’m not sure how the book will end. I hope you enjoy it and if you missed any earlier chapters you can find them on my website blog tab.

I have had lunch with Cedrick twice before. The first time was shortly after he bought the hotel some two years ago. A nice meet and greet so to speak where he explained his lifelong love affair with my hotel and the business. He made his money in commercial real estate in the city and was well regarded in the community for his philanthropy. It was very evident that he didn’t know the first thing about the hotel business.

The second time we had lunch Cedrick wanted to talk about hiring an asset manager for the Stow and I managed to get him to reconsider given the hotel’s performance and my steady hand. That was more than a year ago and I sensed something was up. I was also still chewing on Arthur and his performance earlier. Was he spying for Cedrick? I guessed I’d find out.

Just before noon my secretary came to my door and said that Cedrick’s office had called and the message was bring a copy of last month’s financials to lunch with me, as Cedrick would like to review the results. Fudge! I told him we were still closing!!!! That little pest Arthur is going to pay for this. With that request on the table, she returned to her hole and five minutes later she handed me the statement. I sat at my desk and had a longer look at things. Eight months into the year and were $1.2 million ahead of last year in revenues and $200k ahead in gross operating profit. Not bad, but not great or good. The rate was up $10 year over year, occupancy was flat and so was food and beverage revenues. So, where did $1 million in flow-thru go?

I was a couple of moments early which I usually was, arriving in the Triton Bar and saying a few words to a couple of regulars.

The bar is a mainstay of the local business community. Steeped in history it has the essence of the Stow after decades of power lunches and cocktails. The room regularly sees the who’s who of the political, business and social world of our nice city. I don’t particularly like the place. When I am here, I feel like I’m on display, like a sideshow at the carnival. Who will want to speak with me next? Why can’t I be invisible?

Our table was tucked in the corner with a particularly good view of the city below, the river valley and it afforded some additional privacy from peering eyes and ears. Cedrick was on time and we sit. He smelled of expensive cologne and looked like he just came from the men’s beauty salon.

“Oliver, thank you for making the time for me today. May I please see the August statement?” he asked. I opened my folder and gave him a copy. We both ordered a glass of Chablis and he was lost in the financial statement.

When he came up for air, I asked him if he was ready to order. He said, “No, let’s talk first.” I gave our waiter the sign for don’t come back until I call for you and we’re alone.

“Oliver, I want to thank you for all your efforts to be the steward of the Stow but, it’s time to make some changes.” Changes? What changes? I’m thinking.

“Specifically, Oliver, I am disappointed with your leadership of late. I am basing my thoughts and this decision on four things:

• One, it’s been two years since I bought the Stow and now that I have had two hotels, I see a very different leadership in both buildings, and I don’t like it over here.
• Two, your judgment of late, especially the flag incident has me concerned that you’re not the right leader.
• Three, your financial results this year are very poor, looking at the results your payroll and expenses are out of control. The top line is up which it should be in such a strong market, but the middle of your statement shows little ability to manage the task at hand. Oliver, volume hides a lot of sins, but this is not an acceptable result. I know how much you disdain the Norton but down there it’s a different story and I’m puzzled as to exactly why.
• Four, I keep hearing little bits of nothing really but together they add up to the picture that you’re a bully with the staff and your management team. So, what do you have to say about that, Oliver? Let’s order, I’m starving.”

Where do I go from here? I couldn’t believe what I just heard. This twerp did not know his backside from a hole in the ground and now he knows the hotel business. He listened to too many other people. He should stay away and leave me alone to do the job he pays me for. He has no idea what I must put up with: The customers, the staff, the managers, this building and its crumbling infrastructure, the union, the runaway benefit, and labor costs, the seemingly endless supply of problems that I must deal with, and he is not happy? What the heck! I feel like having the maitre'd throw this man out on the street. Who is he to come into my hotel and tell me he is disappointed in my leadership and it’s time for a change?

I had no idea what to say. I was mad as mad as could be and at the same time, I knew I must play my part. I took a larger than normal drink from my wine and summoned the waiter. We both ordered the special. With that done and a moment to think I looked at Cedrick and said the only thing I could think of that wasn’t going to be a completely negative response.

“What do you have in mind, Cedrick?” I knew if there was any chance of saving myself, I must turn this around. Could this be curtains for me? Why didn’t I see this coming?

Our plates arrived and we both ate in relative silence, a couple of muses about the food, the view, and not much else until the plates were cleared. I really didn’t have much of an appetite. I ate a little, but Cedrick cleaned his plate and ordered another Chablis. I didn’t.

The Proposition

“Oliver, I have a proposition for you. It’s a simple one and I want you to know I think it’s the best for everyone, especially you. I don’t believe you’re a completely lost cause. You have been committed to the Stow for a long time. I know how much you care about this place and I respect this, and I want to give you a chance at redeeming yourself. What I am about to offer you is a one-shot deal and all my conditions must be met or my offer is revoked. If you do not accept my offer in its entirety then I have no other option for you, other than terminating your employment immediately.”

“Ok, so you have my attention, Cedrick.”

“Good, so here are the details of my offer to you, Oliver. First off you have until noon tomorrow to accept it 100 percent or reject it. There will be no negotiation. My offer is this, I want to trade you to the Norton and at the same time, I’ll trade Ann here to the Stow.

“The conditions on which I will approve your appointment to the Norton are as follows: For the first 60 days at the Norton, you will be mentored by a person of my choosing. They will be with you for the first two months. They will evaluate your effectiveness and ultimately determine if you stay on as the General Manager of the Norton. You must follow their direction and they will have a direct line to me. In addition, you are not permitted in any way, shape, or form in disciplining any Norton staff or managers. For two months all your behavior will be 100 percent monitored.

“Oliver, I must go. You have until tomorrow to decide and thank you for lunch.”

He left the table and I’m pretty sure I was as white as the tablecloth. I sat there for what seemed like a long time. I was alone with my thoughts. What a mess.

How did it come to this?

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