A New Playbook
Shaner Hotels President Ghinos Weighs In On The New Hotel Operating Paradigm
Being a hotel operator in the current environment is challenging, to say the least, as the lodging industry looks to recover from one of the most difficult periods in its history following the pandemic.
Plato Ghinos, President, Shaner Hotels, acknowledged as much during a recent conversation with Hotel Interactive as he referred to a “new playbook” while offering his perspective on a number of key operational issues. Ghinos has been with the State College, PA-based management company—which currently has 62 properties in its global portfolio—for some 26 years. The following Q&A represents a portion of that conversation.
HI: How would you compare this economic downturn to past financial crises and what’s your prognosis for the lodging industry heading into ’22?
PG: “I’ve been through four recessions, but this one is the worst…it’s a depression. The big question mark out there is what will happen to the business traveler? When will that segment come back? We see the social groups and associations are starting to come back, but what about the corporate client? I think first they need to move back to their offices and they have to start meeting, they have to start training and they have to go out to see the customer again. We don’t see that yet, it’s trickling in with the smaller companies that are forced to go out there to travel, but the big players are still at a standstill. They’re saving money by not traveling, but I think sooner or later they’ll start reading some of the research that shows that productivity and innovation is plunging.”
HI: How would you assess the current labor crisis within the lodging industry as many line-level jobs remain unfilled and finding qualified workers becomes increasingly difficult?
PG: “We lost a lot of people and a lot of them are getting burned out. I’m on the Board for a couple of hotel schools and applications for these schools are way down. We’re not an attractive industry and people are leaving the industry after 15, 18 months because it’s a tough business environment. You have to take care of the people you have and cut your losses there. It’s not just money, we [Shaner Hotels] are forcing people to take vacation and allowing them to carry vacation from last year because they didn’t have the time.”
HI: Supply chain bottlenecks have led to project delays and a whole host of issues for hoteliers, what’s your recent experience been?
PG: It’s becoming more and more of an issue. We opened a couple of properties in July and I couldn’t get the linens. How can you open a hotel without linens and towels? I don’t see these issues going away any time soon; it’s kind of bizarre.
HI: There have been significant increases to raw materials for new construction projects in recent months, how is that potentially impacting plans for hoteliers?
PG: “It’s impossible to get pricing anymore because the contractors don’t know how much wood or steel will cost next week. So the gamble is do you wait six months to start something or do you start now? Even on a guaranteed contract you can have a 20% increase in materials and who’s going to pay the difference? So what is that going to do to the industry?
HI: Operating costs are always a concern for managers, what are you seeing there and what’s the impact on the bottom line?
PG: “You have the risk of inflation, which is really out there. We see it every day, costs are going up and up. Operating costs, food costs, and costs for utilities, which we haven’t talked about in a couple of years. Profitability is getting squeezed and that’s why it’s all about rate. With the better operators and in the better markets you see an increase in rate. It has been and is becoming more expensive to operate.”
HI: There has been some discussion about new pricing models where hotels may begin charging guests extra for certain amenities or services, how would you feel about that?
PG: “We need to start charging and follow the airline industry. I think housekeeping is a great opportunity to charge, especially if you open in a resort market, for example. You can give the customer the choice. That’s where we should be headed. I think there’s a lot of pressure on owners and managers, but the brands are resisting it because it’s too radical. But once it starts there’s going to be a domino effect, I think the market will force it.”