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Surviving the Times

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March 01, 2003
Slow Economy Management
Michael Schubach, CHTP - michael.schubach@thepinehurstcompany.com

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© 2003 Hospitality Upgrade. No reproduction without written permission.

Oh dear. I’m as depressed as the economy and as apprehensive as the Baghdad fire department. We haven’t even started our new war yet and already there are casualties on the home front. What the veterans of hospitality and tourism have long known is that in times of economic plight, discretionary travel is the first to falter and the last to recover. It appears that this year a giant sector of the typically mobile American public will be planning to vacation in their living rooms. The Tampa Bay Buccaneers might be going to Disney World (thankfully they live within driving distance), but they just may end up having the park pretty much to themselves.

And right behind the homebound vacationers are office-bound business people. A cooling economy underscores the need to conserve; those who once thought nothing of 50 executives hopping a flight to a three-day conference now think twice about getting that same group together on an hour-long conference call. What, you might be wondering, can I do to help alleviate the pre-traumatic stress syndrome my hospitality comrades-in-arms are feeling? Glad you asked. To help combat the nail-biting anxiety all this traveler frugality can cause, I am prepared to deploy my arsenal of advice for tough times. Did I say tough? Hell, things seem downright Dickensian.

For example, I very recently heard an NPR interview with a very successful entrepreneur in the San Francisco Bay area who has made his fortune with a chain of small but upscale boutique hotels. He observed that not long ago a hotel in his chain of 100+ rooms would be managed by a general manager, a rooms executive and a front office manager. Now, in our distressed economy, a single general manager staffs that same hotel. Clearly this chain has “right sized” but that action begs the question of how such a bright and successful hotelier could have gotten his staffing so “wrong sized” in the first place. If one is the correct number of managers, why did he staff it with three?

My slammed economy pet peeve is that tough times put us in a mindset that our current challenge is to undo all of the lingering stupidity of the past. Right sizing implies that we’ve just awakened from a weekend binge of personnel hiring, having come to our senses on Monday morning only to discover that there are three managers out front instead of one. I prefer the guilt-free approach: Staffing guidelines are neither right nor wrong, but are as changeable as business circumstances. When an IT department downsizes it isn’t because too much data was flowing – it’s because the staff level is a function of the company’s service vision. When cost and staff reductions are required, so are new coping mechanisms and compromises that must be communicated to all. Resizing the IT staff doesn’t mean an end to e-mail, but it almost always involves less user support, longer product and correction cycles, and a need to draw the line on the constant succession of change our vendors and users would have us make. The funny part about this is that IT professionals are uniquely oriented toward change – more so than most operating departments. Our life challenge is getting everyone else to cope with our new parameters.

Another peevish aspect of revising our war-economy vision is the constant clarion call to get back to basics. These are not our salad days – we’re rationing meat and potatoes. The basics to which most operators refer in this no-frills age are the traditional favorites of rate, occupancy and margin. We nervously watch as guests stay home and distressed inventories climb. As the tension mounts you begin to find four-star hotel rooms in Times Square for $68 a night on desperation.com. The understandable need to get something rather than nothing for a room going down vacant should be tempered by the sad yield management lesson being taught by the airlines. When hotel beds become the commodities that airline seats are today, it becomes difficult to convince a buyer in the healthier times that there is product differentiation other than price. (Remember when airlines advertised champagne flights, friendly flight attendants and club-style service?

The only messages you hear today are cheap seats and the occasional “our coach class is less miserable than it used to be.”) The lost principle of yield management is flexibility, not lowest price. Beyond rate management, I worry that concentrating purely on the economics of economic recovery causes us to miss the other basics on which our industry was built. Some years ago I participated in a business skills conference (the sort of thing today’s budgets don’t allow) and the college professor leading the session took us through a left-brain/right-brain exercise that produced amazing results. (For those brains that have forgotten their hemispheres, the left brain is home to the accounting and IT departments while the right brain houses concierge and marketing graphic arts.) The first step of the exercise was a very simple challenge: Ask yourself, what do your guests need?

Write as quickly as you can and list as many items as come to mind. You have one minute. Go!

Pencils scratched furiously and as a group we produced a unified list of many important things that guests need, including a rapid check in, a clean room, a fair price and a correct bill. Then the professor halted the proceedings, lowered the lights in the room, had us relax in our chairs and concentrate on our breathing, played restful classical music and projected an image on the screen of a beautiful stained glass window. After a few minutes in this near hypnotic state, the professor gave us our second task: Slowly pick up your pencils with your non-dominant hand. (Lefties had to write with their right hand and vice versa.) Take as much time as you want and compile a new list. What does your guest need?

The second list (although considerably harder to read) was full of entries that weren’t even considered on the first pass. The change in the classroom’s atmosphere coupled with the use of our non-dominant hand triggered a transfer of control to the right brain. This time we realized that our guests needed recognition, care, attention, appreciation and reward. This exercise spotlights the problem with managing through stressful times and a woeful economy: We let the left brain call all the shots. It’s an easy habit to fall into – we spend our business days working in our left brain. Besides, managers who relax in their chairs and bathe themselves in soft music and mood lighting give the impression that they don’t quite understand the urgency of their situation. Despite those appearances, I contend that the thoughtful consideration of all of the needs of those we serve – particularly when the pressure is on – is as strategic as any P&L review.

In these austere times, when we strive to return to basics and make everything “right” again, we concentrate on the bottom line. I would never be so naïve as to suggest that any hotel can afford to ignore the marketplace or the competition, but it’s the thoughtful contemplation of how we respond to adversity that determines long-term success. These are times that require both rapid-fire tactical moves as well as long-term strategic considerations. If we’re not careful on both fronts, even when it seems we can least afford it, we may survive to see many establishments out there that look like hotels but perform like airlines.

Michael Schubach, CHTP, is vice president of resort technology for The Pinehurst Company, the resorts subsidiary of ClubCorp. He offices at Pinehurst Resort, site of the 1999 and 2005 U.S. Open golf championships. He can be reached at michael.schubach@thepinehurstcompany.com.

© 2003 Siegel Communications, Inc. May not be reproduced for any reason.

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