Hotel Management

woman with luggage checking in to hotel

Employment and the Next Lodging Industry Downturn

Speculation continues to swirl around the lodging industry regarding the likelihood of a slowdown beginning as early as 2020. Fueled by panels at industry conferences and commentary in the trade press, questions remain as to how widespread and long lasting such a downturn might be.

Given the industry is essentially cyclical, an eventual downturn appears to be more or less inevitable, although the next contraction will follow an unusually extended period of growth and profitability.

Complicating the industry situation is the strength of the national — and even global — economy, along with consumer confidence, employment data and the impact of ongoing trade wars, all in light of the 2020 U.S. presidential election.

A recurring theme at the Hotel Data Conference sponsored by STR this summer had to do with employee recruitment and retention in light of a downturn. While it’s true during periods of expansion as well as contraction, the famous dictum attributed to J.W. Marriott Jr. is especially true during downturns: “If you take care of your associates, they’ll take care of your guests.”

Well-looked-after guests result in higher guest satisfaction scores and more positive reviews on social media, which typically translate into more repeat bookings, increased trial usage due to positive word of mouth, higher occupancy and greater profits.

Consider the challenge of finding and hiring people with strong interpersonal skills. The most promising approach is to seek applicants who consider entry-level hotel jobs to be a stepping stone to a career in hospitality.

Considering that international travelers are likely to remain a reliable guest segment in many markets, downturn or not, it makes sense for hotels to pursue multicultural candidates who can help communicate with guests in their languages of choice.

Providing training is essential to retaining motivated employees because it helps satisfy their desire to pursue a career path. Cross-training is a good option because it not only satisfies the employee expectations but expands their ability to handle new and different tasks on property.

lineup of hotel employees

Confronting the Labor Shortage

When Jonathan Tisch, conference chair of the 41st annual NYU International Hospitality Industry Investment Conference, opened the event last month in New York, he wasted no time in addressing a core issue currently facing the lodging industry: dealing with the country’s current entry-level labor shortage or as he put it, “keeping our talent pipeline full.”

While politicians celebrate reports that this spring’s national unemployment rate has dipped to a 50-year low of 3.6 percent, the dwindling labor pool means hotel general managers are struggling to fill openings across the board.

Agriculture, retail and construction, among the others, also are struggling. Closely tied to recruitment is retention: for every associate who stays on the job and thrives — seeing their job lead to an eventual career path — there is one less vacant position to fill.

As it happens, a number of widely known hotel company CEOs over the years got their start in the industry, working in entry-level positions such as dishwasher, bellman and night auditor.

In his remarks, Tisch offered a number of strategies for coping with the challenging situation. Two stood out: First, he urged hoteliers to make diversity and inclusion is a core goal. If for no other reason, he said they should make sure their teams are as diverse and inclusive as their guests.

There’s another good reason for hoteliers to promote diversity. We’re welcoming more and more international guests. It, therefore, makes good business that hotels offer multilingual staff.

For those who say automation and robotics is the answer to low unemployment, I say that’s wishful thinking.  At its core, hospitality has been and is likely to remain all about the human touch.

Celebrating a Hotel’s Birthday

M&R’s friends and family recently gathered to celebrate the first “birthday” of the Hilton Garden Inn New York Times Square South on West 37th Street in New York. The celebration recalled the exciting and harried first days of opening the hotel one year ago. That event was an unforgettable achievement for the company’s associates and management team.

Hilton Garden Inn New York Times Square South exterior

Hilton Garden Inn New York Times Square South, 326 W 37th St, New York

The bonding and sense of camaraderie that emerged from those first days and weeks among members of the opening team—from the front desk to housekeeping to the engineering staff—will hold the hotel in good stead going forward. A feeling of pride comes with being part of the original team. Even guests pick up on the vibe when interacting with these associates.

Front Desk, Hilton Garden Inn New York Times Square South

Front Desk, Hilton Garden Inn New York Times Square South

The good cheer notwithstanding, I was reminded what an important marker a first anniversary is for any hotel from a planning and forecasting perspective. Because it’s only with a full year under your belt that members of the business team can really begin to get a handle on how successful they’ve been and the challenges that lie ahead.

It’s all about what we call the “year-over-year comps” – an analysis of performance that compares the previous to current years. Now that the team has crossed that first-year line, managers can project next year’s holiday season, for example, against this year’s and make assumptions accordingly. The same applies to the hotel’s performance in January and February, typically two quietest months of the year.

Much has to do with seasonal variations, notably high season and shoulder season. Group nights are another element to factor in. So is the practice of allotting excess inventory to online travel agencies. How much is too much?

Lastly, at a time when dynamic pricing is the order of the day as it is today and rates can vary by the day if not the hour, the year-over-year comps give the revenue management team more data to ponder. All with the goal of generating additional revenue, which can translate into increased profitability.

Recruiting in a Tight Market

businessman with laptop talking to a female business woman

When he accepted the coveted Stephen W. Brener Silver Plate Award at June’s NYU International Hospitality Industry Investment Conference in June, Marriott International president & CEO Arne Sorenson cited the important role played by motivated rank-and-file employees in the industry’s continued success.

Recruiting and retaining the best entry-level associates is actually more critical than ever, Sorenson pointed out, considering the current shortage of qualified workers, not only in the hospitality field, but across most segments of the economy. The country’s jobless rate, in fact, ebbed down to 3.8 percent in May, the lowest rate since April 2000, according to the U.S. Department of Labor’s Bureau of Labor Statistics. The last time the rate was lower was in 1969.

Given the competition for the best entry-level employees across various industries, restaurants and retail among them, it’s not surprising that pressure should be mounting on hotel owners and managers to pay a competitive wage. A living wage is certainly important, but so are other indicators of job satisfaction.

Among the top five: supportive management, congenial work environment, a career path, flexible work hours and cross-training opportunities. Then too, considering our multicultural world, it’s important to acknowledge that English isn’t necessarily everyone’s first language. And, lastly, in a nod to the growing #MeToo movement, employees expect a harassment-free workplace.

Managers at our company support these ideals along with most of the rest of the industry.

In closing, Sorenson repeated words of wisdom spoken years ago by the company’s founder that have come as close as any to an industry mantra: “If you take care of your employees, they’ll take care of your customers and your customers will keep coming back again and again.”

There’s no better truism.

Extended Stay’s Special Challenge

woman with coffee next to map

While guests staying at business hotels typically spend no more three or four nights per stay, guests who choose extended-stay hotels may spend weeks or even months. In ways both large and small, hosting long-term guests calls for a different approach to service.

After years of experience operating business hotels, M&R Hotel Management this year will assume management of our first extended-stay hotel, the 113-room TownePlace Suites by Marriott at 324 W. 44th St. in New York. Getting this new relationship right is a top priority.

On the simplest level, extended-stay hotels strive to be more residential in feel. Design of the guest room as well as the public spaces tends to be more home-like. Guest rooms come with kitchens, allowing guests to prepare their own meals, although complimentary breakfast typically is provided. Consequently, many brands offer grocery shopping services. Similarly, they offer off-site dry-cleaning service and on-site laundry facilities.

But at a deeper and ultimately more critical level is the social aspect. Recognizing that being away from home for an extended period can be an isolating experience, extended-stay hotels may sponsor evening socials, movie nights or seasonal or holiday-related parties, where guests get the opportunity to mingle and “meet their neighbors.”

The staff of an extended-stay hotel typically become familiar with long-term guests, unlike those who arrive at night and leaves early the next day. Regardless of the type of hotel, hospitality is at the core of the business: Our job is the same, to put the guests first.