Your hotel is not profitable, or not profitable enough? Try checking the following points, it’s simple common sense really.

Stephen W. Ayers.

It is very simple, and it makes sense. 

Voltaire, the famous French Philosopher, is quoted as saying “Common sense is not so common”. He was and is absolutely correct, otherwise I would not be writing this article.

A hotel resembles many other things and comparisons are easy to make with regards to the way they are treated and handled by their owners.

An excellent example is the auto. In order to get the return on your investment you have to take good care of it. With your car you have to maintain it, renew parts that either break or pass their useful life cycle. To be able to drive the car you need to fill it with fuel of the right type. All the parts need to be in good condition, without which the car might breakdown, or worse, cause an accident. 

Every car has a maintenance plan, certain points at which certain actions need to be taken, and statistics on mileage and other parameters that allow you to monitor the ‘health’ of the car.

It is the same with hotels.

To gauge whether you are operating a ‘healthy’ hotel, ask yourself the following basic questions:

• Do you have a Capital investment plan in place to take care of public areas, rooms and systems?
• Do you have a multi year strategy with defined targets and measurement programs in place to monitor progress?
• Do you have a realistic budget, and do you meet to discuss and monitor it with your lead staff?
• Do you have adequate operational equipment budgets to run effective service without interruptions? 
• Do you know your competitive set and the status of their properties?
• Do you monitor the social media and OTA’s to keep track of your ‘reputation’ and guests comments?
• When reviewing your Human Resources:
• Do you have high turnover in staff?
• Are you paying fair wages and good benefits?
• Are you investing in training your staff?
• Do you have a great cadre of executives, and if not, why? Do you pay good and competitive salaries and benefits that can attract great talent to manage your property excellently?
• Do you have a great in-house culture? Happy staff mean happy guests.
• Do you meet regularly with members of staff to gauge the ‘mood’? Do you thank them and compliment them on their work?
• Do you have the correct number of staff for every department, neither too many but certainly not too few. Don’t forget, staff efficiencies and work produced can be easily monitored.
• Do you make regular inspections of your property? You must check standards of upkeep not only in ‘Front of house’ but also in the ‘Back of house’, maintenance areas, stores, staff areas and dining rooms.

Conclusion

Take the time to listen to your managers and staff, they know exactly what is going on in the hotel.

A wise man once said, “Hope is not a strategy.” You cannot rely on hope that things will go fine. You cannot run a hotel without investing in both the staff and the property.

You will not achieve a good online reputation if your staff are not happy, and if you have dissatisfied guests.

If you do not have resources do not buy or run hotels.

You cannot save your way to increased revenues and profitability.

Owners that start cutting jobs, delaying maintenance and ignoring necessary renovations are committing themselves and the hotel to a death spiral.

Once a hotel is in ‘good health’, and the simple rules are followed, profitability will follow, and enough resources will be forthcoming to keep both the owner and the hotel happy for many years.