How To Turn Around An Under Performing Hotel - By Caroline Cooper

Take Stock
Start by reviewing what areas need your attention. It might be useful to conduct an audit of all the following areas.

Quality
Take the customer journey and take a look at all aspects of the hotel as the guest would see it. Review each of the following areas:

• The cleanliness of the outside, public areas, bedrooms, bathroom, etc; are all spotlessly clean?


• The fabric and condition of the building. When was the last time it saw a lick of paint? What areas are looking shabby, unkempt or in need of modernisation?


• How practical is the layout of the hotel and bedrooms. For example, if your guests are predominately corporate, is the room user friendly for guests to work - can they sit comfortably at the desk, with good light and have sufficient (and accessible) power sockets for their laptop and phone charger. Can you plug in the hair dryer and still see in the mirror, and plug in the kettle without having to place it on the floor?


• Do you offer value for money? Compare what guest get for breakfast, the overall quality in relation to your own pricing and that of your competition.


• Sleep in your own beds and check you can get a good night's sleep. This includes a comfy bed, peace and quiet, and feeling secure.


• Review the quality of service in all areas.

Involve others in your team too to review departments other than those they work in e.g. kitchen staff to look at bedrooms from a guest's perspective, housekeeping to eat in the restaurant, etc. They may see things you've become oblivious to.

Cost Control
Look at all your costs and check your margins in all areas.

• Review menu costs and the gross profit margin based on actual consumption and actual sales. These must be based on current prices - a dish which may have been making a healthy profit 2 months ago now may be making a loss.


• Check what is going in the bin, and ask if this is over ordering, over production, giving guests too big a portion, or guests leaving food from poor quality.


• Check the cost to you each time you let a room - servicing, linen, toiletries, utilities, and compare this with your average room rate. Are there times when you are cutting your rate so low that you are making a loss?


• Look at your labour costs and compare their productivity with the norm for your type of hotel. Do your staffing levels reflect your occupancy levels?

Marketing

• Know you customers and what they expect from you.


• Where else can they get the same thing? Your competition may not be obvious e.g if you are aiming to attract the corporate market you might be competing with hotels in other locations near major transport hubs, or serviced offices; if appealing to families for their annual holiday you may be competing with hotels in other resorts, or local self catering cottages.


• What differentiates you from the competition? How well are you promoting your point of differentiation?


• What makes you stand out (or lets you down) from your guests' perspective - listen to their feedback, read your TripAdvisor reviews, and learn from them.


• Review what marketing you are already doing and track the conversion rates. Do each of your campaigns bring in a return on their investment?


• Check your Google analytics to see if your website is earning its keep.


• Check your visibility both on line and off line. If you Google a description of your hotel (e.g. child friendly hotel in York) what comes up? Ask yourself how else people can find you.


• Ask your existing guests how they heard of you.

Be honest with yourself about the findings. You may discover some things that are difficult to accept. It is all too easy to make excuses why some of these are as they are, but if they are not helping you to achieve business performance you may need to be ruthless in addressing them.

Plan Ahead
Having taken stock of all the information you may realise you cannot physically or financially address everything at once so it is important to prioritise.

Start by setting some goals of what you would like to achieve and by when. This will give you focus and help you devise a plan. Your goals will include financial goals, but they may also include your aspirations for the type of guests you want to attract, and the services you want to offer to help you achieve those financial goals.

Some areas may require investment, e.g. the fabric of the building, others may require time and effort e.g. menu costings, auditing systems; whilst other areas may need some expertise e.g. marketing or IT support.
Once you have identified all the areas that need attention ask yourself two questions about each one:

1. How easy will it be to address the issue (how much time, effort, skill money will be needed)?


2. How much impact will it have on the performance of the hotel and towards your goal(s)?

Logically your starting point needs to be the aspects that are the easiest and maximum impact. Sadly often the easiest things are those that have the least impact on the business, so you need to review both aspects - why waste time and effort working on something that has little impact (even if it something you enjoy!).

If a part of your plan includes reviewing rates you may find it useful to complete a profit sensitivity analysis to help you assess the impact of different rates and sales levels on your overall margins.

Implement, review and develop
Once you have your plan in place take steps to implement it, but ensure you establish review points to check that everything you are working on is achieving its objectives. Staff training may be a key part of the process if you are changing the way you do things. It's human nature to resist change, so establish systems and procedures and spend time explaining the importance of these to gain buy-in.

Review
Set up reporting systems for both quantitative and qualitative aspects.

Quantitative might include financial reviews including weekly review of margins, RevPAR, marketing conversion rates, wastage controls, staff productivity

Qualitative reviews might include: guest feedback, cleaning audits, maintenance audits.

Develop
Conduct all of the above on a regular basis to continually improve. Your guests and their expectations do change, costs go up, demands fluctuate, so this is a continual process. Use your reviews, customer feedback and what is happening in your market to evolve and develop as the business need dictates.



Caroline Cooper is a business coach with over 25 years in business and management development, and helps hoteliers review their operation and leadership objectively to enable them to develop their hotel business to be more profitable. She is the founder of Zeal Coaching, specialising in working with hospitality businesses, and which has a number of business management tools to support hotels. She is also author of the 'Hotel Success Handbook'.

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