The value of great hotel management has never been clearer—or more urgently needed.
In the hotel business, the impact of the novel coronavirus pandemic has been profound—and almost universally devastating. Personnel, properties and profit margins have been altered in ways that might have seemed unimaginable just a few short months ago.
There is no sugarcoating the negatives. Brands have cut 50% to 75% of corporate staff, and some management companies don’t have the energy or the resources to deal with new assignments. At a time when owners need meaningful help, they are getting less from the brands and—in many cases—less from their management company. With an uncertain future largely dependent on a vaccine or therapeutic breakthroughs, there isn’t much relief in sight—at least not for the immediate time ahead.
But for hotel management professionals, and the owners that rely on them, there is a silver lining. In the same way that immense pressure can expose hidden fault lines, it also reveals integral strengths. This challenging moment has definitively revealed the value of great hotel management companies and the human capital they employ. They are proving to be critical load-bearing structures for the industry.
And in our industry, we know brand value. We know real estate value, But the value of hotel management and human capital has always been trickier to demonstrate—the game-changing difference that outstanding management, expertise and service can deliver has always been recognized in an abstract way, but never in such a concrete and stark terms.
We’re now able to do that as a result of this crisis.
What does that look like? Why and how is the value of human capital so apparent at a time like this?
This public health emergency has revealed just how dramatic the difference is between brands and businesses that have invested in their teams—and those that saw personnel as just another line item they could cut to save a few bucks in the short term.
The reality is that if you believe in what you’ve been telling yourself and how you’ve been selling yourself, you would recognize that you simply cannot cut half the talent out of a management company and expect to deliver at anywhere near where you need to be. If your people are your greatest asset, why would you dump that asset overboard at the precise time when it is most needed? Expertise doesn’t expire. When times are tough is exactly when expertise becomes more valuable. Which is why it shouldn’t come as much of a surprise to see that the hotel management outfits that have managed to stay fully staffed at the corporate level during this pandemic have performed the best.
The best hotel management companies aren’t just keeping people—they are actively hiring.
As an industry, we love to talk about culture. Our people. Our values. Well this is a crisis where culture messaging is actually tested—and not everyone has lived up to those stated ideals. Culture is where the rubber meets the road. How can you preach a strong and connected culture if you furloughed or laid off critical team members the moment things get tough? On the other hand, those who have continued to live by their culture—and who recognize the connection between great culture and lower turnover, and a motivated team that consistently delivers great service—have largely kept their teams intact. As a result, culture within great hotel management companies has strengthened, and positive bottom-line metrics have emerged. Pandemic case studies are showing value in such clear and unmistakable ways, and the industry is newly attuned to the critical importance of expertise.
Evolve and adapt
As important as it is to rely on proven protocols and established and effective processes, great teams know when and how to evolve and adapt.
In a COVID-19-altered hospitality landscape, with virtually no business or group travel, new approaches are a necessity. During a famine, you need to find new sources of sustenance. When traditional formulas and assumptions no longer apply, you need to get creative.
For hotel management companies right now, that means tapping into local business—which is one of the few places where there are opportunities to grow your business. Finding those in your community looking for a break: a hotel where they can swim with the kids or take a mini vacation without the stress and concerns of travel during a pandemic. Successful hotel management companies are identifying aggressive, creative hunters on the sales front, and they are refining their digital marketing skills to become more targeted and precise. Proven, scalable systems are showing their worth—but so is creativity and connectivity. A strategy that is now more effective and essential than ever is getting GMs involved in the community—doing whatever it takes to protect an owner’s market share.
The opportunity still exists for skilled hotel management companies to do a great job for their partners. Demand can be found, if in different ways, and is ripe to be stolen from less ambitious competition. The owner’s checklist is different today than it was in 2019, and even with an uncertain future, we all have a compelling new way to talk about (and level up on) the value of expertise and human capital.
Steve Van, president and CEO of Prism Hotels & Resorts, founded the Dallas-based company in 1983.
The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.