What owner or operator looking at their competitive set wouldn’t agree that it is survival of the fittest out there? Legend has it that when Marriott enters a market their strategy is to put their weakest competitor out of business. Are you the weakest competitor? Are you sure about that? How are you priced? Has your perception of the price/value for your property held up or have you been surprised to find that the customer isn’t buying at your rate? Have you checked your Expedia reports? Depressing aren’t they?
Of course you remember Location, Location, Location. If your hotel or resort is in that “last to fill” location, farther from your key demand generator(s) than your competitors you are in trouble. If your property has missed its renovation cycle but there is fresh product in your competitive set you are in trouble. If your hotel’s associates aren’t the friendliest or your resort isn’t the cleanest you are in trouble. If you don’t have a “state of the art” revenue management effort you are trouble. If you don’t have the right brand or the right manager you are in trouble.
It is as if a bright light is shining on the Industry and no one is allowed make-up. Combine that with the fact that you aren’t hitting your cash flow goals and you keep looking for more expenses to cut and you keep putting off those much needed capital items. Remember how important it used to be to provide your associates with the tools to do their jobs? And here’s the cherry on top, you need to drive volume from Expedia, Hotels.com, Orbitz, etc. etc., and guess what, the customer is buying hotel rooms like they are commodities and the price that you think will drive volume is $30 higher than what the Internet shopper has told you your room is worth.
Ricky Bobby: “If you ain’t first you’re last”. Probably silly when you first heard it, now it’s not so funny any more.
It’s time to change your MO. Look, IBM doesn’t build the whole computer anymore. I would assert that if you try to do it all yourself you are likely to be that weakest competitor. Whether you are an operator, an owner, a lender, a servicer, or a receiver, it is time you found experts who have a track record in difficult times and are willing to get their hands dirty. The engine light’s on. You need someone who can tell you what needs to be fixed now and what can wait.
DON’T hire an asset manager who became an asset manager because he/she didn’t want to get their hands dirty.
DON’T hire an asset manager who “creates value” by regurgitating numbers.
DON’T hire an asset manager who creates needless work and aggravation for the operator, distracting the “General in the Field” from the tasks at hand.
DO hire an asset manager who matches up peer to peer with the Operator’s corporate oversight.
DO hire an asset manager that helps create the strategy. An asset manager that get’s results by getting their hands dirty side by side with the operator – from revenue management to cash management to tactical capital deployment.
ADVICE: Keep your rate up in your core booking window. Put an “Advance Purchase” rate out there to build base. Do your research and find the right rate for the package channel. Use opaque rates to fill distressed dates. And, oh yeah, win the group business that has the day of week pattern you need and watch your RevPAR Penetration Index increase.
The title is stolen from my favorite fictional anti-hero and Florida historian Serge A. Storms with due credit and apologies to Tim Dorsey who provided me with my Summer reading list.
