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Heart of America Reinventing Hotel Operational Model

Heart of America Group owns restaurants and hotels, and it’s given them some secret sauce for operating their holdings. We reveal their amazing secrets here.

Thursday, June 18, 2015
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For years it’s been conventional wisdom the hotel and restaurant sides of the hospitality business are better left separate. The notion says restaurateurs and hoteliers need to be focused on a specific discipline and it’s not practical or possible to get these so called disparate sides aligned.

But that’s the thing about conventional wisdom, every time you think something is an unalterable truth someone comes along and disrupts it. That’s the operational philosophy behind Heart of America Group, which takes the operational DNA of a restaurant company and translates their experience and know how into savvier hotel management.

Operating in the Midwest – get it, the ‘heart’ of America – the company has nearly three dozen hotels and restaurants, an office building, and 1.4 million square feet of retail. Their brands include Johnny’s Italian Steakhouse, The Machine Shed Restaurant, Wildwood Lodge, Thunder Bay Restaurant and The J-Bar as well as hotels branded under Marriott, IHG, Hilton, and Choice Hotels’ flags.

"Most of our hotel general managers come through the restaurant side of our business. That’s because the heartbeat of a restaurant operator beats significantly faster than that of a hotel operator," says Ajay Singh, VP Brand Development for the company’s Johnny’s Italian Steakhouse division.

But he also says it’s not because restaurant executives are inherently better, they just come into contact with guests more often. "Hoteliers don’t operate differently, but touch points on the restaurant side occur much more frequently than in a hotel because we are constantly interacting with guests and getting to understand them on a deeper level. So when operating in a hotel, we have a much more amped up mentality when the guest walks into the hotel," said Singh.

It’s a subtle shift that makes a huge difference.

Singh says these professionals with restaurant background do not see F&B as a separate silo from the hotel. That means they’re not just great at guest relations, but can operate the hotel in a more cohesive way, blending in the F&B side of the business more expertly.

Heart of America was launched in 1978 by Mike Whalen who had a different idea for his career aspirations. Then life intervened. His father owned a building with a tenant who operated a 100 seat restaurant that was doing poorly. Whalen was asked to come help out for six months by taking it over and seeing if he could stabilize it. And during the course of those fateful six months he fell in love with the business and a company was born. More restaurants and hotels were added and somewhere along the line they figured out this unique operating philosophy.

"The company has grown in such a way our understanding the hospitality skillset was different. We realize how they cross over and complement each other more fluidly," says Pamela Cooper, VP Marketing and Staff Development with Heart of America. "There is a lot of energy in the restaurant environment and we are constantly looking to take that energy and translate it into the hotel space."

Cooper says they’re able to better understand synergies so the guest doesn’t feel they have a truncated experience. "One of the things we do is get our team to understand they are operating in one culture. We don’t compete for resources or attention because we want that seamless experience for the guest and we work hard on this through our training process."

One way they unite the disparate cultures between restaurant and hotel is having restaurant servers double as banquet personnel. "We don’t want the banquet experience to be less impactful than the restaurant experience," says Cooper.

Singh offers up another tip. He said the majority of their hotels with restaurants can operate on single P&L, eliminating ‘hey this my department but not my expense’ mentality.

"Forget what you have done in the past and erase those divisions," says Cooper. "We have one person overseeing both sides and has responsibility for the entire four walls. This creates a level of accountability while eliminating scenarios where there are GMs for hotels and the restaurant. They can have competing goals and compete for resources. That creates silos and divides the organization." It also saves money.

Other practical ways the overlap can help: In staff meetings everyone communicates together, on slow days a restaurant hostess could help with front of house tasks and vice versa. That fluidity creates a flexibility for staffing models while also keeping staff busy and engaged with customers throughout the day.

"It also gives employees multiple streams for their career path and breeds people with that fundamental cultural philosophy we are looking for," said Singh.

And in a time with F&B becoming an increasingly relevant and critical aspect of maximizing focused service hotel profitability this appears to be a prescient strategy. For example the company developed a 15 acre parcel into lifestyle shopping center predominantly for females and in the focused service hotel added their J Bar concept. It’s been a big hit.

Heart of America currently has three more of these in the works including one in a 200-room Embassy Suites in KS that will feature a 25,000 square foot conference center when it debuts in November. They’re also developing the first AC Hotel in the Upper Midwest and building out its own Hotel Renovo brand.

In the end, though, it’s about giving employees a chance to thrive, which helps Heart of America be more successful.

"The energy created and our work culture allows people to maximize their own talent. We have all sorts of unique positions in the company and that is what makes it rich and successful," says Cooper.

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