Emphasis On Efficiency
BITAC Operations Panel Drives Home Importance Of Technology, Culture
Technology and culture were identified during a recent panel discussion at BITAC Operations as two key aspects of managing effectively in today’s lodging landscape, according to a handful of veteran hotel executives.
The panel discussion—entitled “Emphasis On Efficiency: Hoteliers Adapt To New Normal By Doing More With Less”—kicked off the education portion of the event, which took place last week at the Rancho Bernardo Inn in San Diego, CA.
It goes without saying that the pandemic has impacted many areas of operations and changed the perspective of hotel companies throughout the industry.
Todd Felsen, President and CEO, OTH Hotels & Resorts—a Williamsburg, VA-based third-party owner/operator which was launched just prior to the pandemic and now has some 12 hotels in its portfolio—acknowledged the company was forced to lay off many property-level employees for a period and that it was “traumatic” for everyone involved.
However, in keeping with the theme of the panel, Felsen noted the company quickly put it behind them. “We recouped after that and we said ‘we’ve got take the bull by its horns and do more with less,’” he said.
Felsen, however, pointed out that COVID remains an ongoing challenge for the industry.
“It’s still here, it’s not going away and now it’s the new evolution and it changes every single day. We have to adapt to the change in our operations and really what the customer wants,” he said, later adding, “technology is here to stay, it’s evolving and it’s the future of hospitality.”
Kimberly Rowell, COO, GB Hotel Group—an Atlanta-based owner/operator which was founded during the pandemic—reinforced the importance of technology.
“I really do believe if we invest in efficiencies—the proper ones, the right ones—that we will realize higher margins in the long run. We can mitigate the cost of labor in so many ways,” she said.
A prime example of a technology designed to help reduce staffing challenges is remote check-in/check-out for guests, which has garnered more attention in the wake of the pandemic. The consensus, however, was that the impact hasn’t been quite as significant as expected, at least to this point.
“One thing that hasn’t alleviated labor concerns in my opinion is mobile key. When it first started rolling out everyone thought ‘this will be great, we’re going to alleviate demand for hours at the front desk because guests are going to go straight to their room.’ We haven’t really seen that. The guest adoption has been slower than I think everyone hoped it would be when it first rolled out,” said Chris Manley, President, Five Senses Hospitality, a Denver-based company which also was formed during the pandemic and has grown to include some 13 properties in its management portfolio.
Nan Cummings, COO, InterMountain Management—a Monroe, LA-based family-owned owner/operator with 91 properties in its portfolio—noted the company has rolled out kiosks at several of its Marriott properties, but is not necessarily convinced that’s the future of check in for all guests.
“I do think at the end of the day it is about seeing someone there and I don’t know if we’ll ever get rid of that. At least in our hotels, we try to still to keep that personal touch,” she said.
Felsen agreed. “I’m kind of an old-school believer that we’re in the people business. I want to talk to somebody in front of me and have a conversation as a business traveler myself.”
However, one emerging piece of technology that Felsen described as “really interesting” is Chatbots, robots that can interact with guests and answer some of their questions.
“This stuff is really, really cool and it alleviates a lot of the pressure with the staffing issues that we’re all having. I’m very intrigued by asking a question online and getting the answer back immediately,” he said.
Similarly, Felsen further touted the value of a number of hospitality-based text messaging platforms such as ALICE, Zingle, and Kipsu.
“Most people will respond to a text message versus sending an Email. And for your business traveler, for something on the fly, using text messaging is really important,” he said.
Meanwhile, the panelists emphasized the importance of establishing the right culture to retain labor and create an efficient operating strategy.
“I would say that our culture has really sustained us from 9/11 all the way through the pandemic. There are some good things that have come out of it [COVID] for us. We’ve all stood together once again and just continued to grow and develop our people internally,” said Cummings.
She further added, “we start with the leadership and we invest a lot on the front end of interviewing our GMs. So we have a process that we go through and we really immerse them [new employees] in the culture that we feel like we’ve created over the last 40 years.”
Rowell, meanwhile, emphasized the importance of inspiring the next generation of workers.
“We all got into the business because it was this great passionate thing to do. We have to recreate that passion for ‘Gen Z’ because that is our future and because those that left [the industry] are not coming back. They were abused with wages for so long,” she said.
“The gloves are off and you’ve got to start be really creative to hold and have great retention of your associates; people are leaving for dollars,” said Felsen.
He added, “you have to take care of your associates and not lose a line cook for 10 dollars an hour. You’re going to have to pay it, you have no choice. It’s combat out there in the field.”
Rowell did also stress the importance of inclusion and long-term growth.
“It is the money, but if it’s a small margin and they’re being treated like family and they really believe there’s a future for them, they will stay,” she said.
Despite some of the aforementioned challenges, one area where the industry has responded well and seen positive results in recent months has been in terms of average daily rates. There has been virtually no decline, and in some cases growth, in many markets throughout the U.S.
“I’ve been very proud of our industry as a whole and its desire and ability to push ADR. I think all of us would agree that ADR is coming back a lot faster than any of us ever anticipated, which is critical especially in the inflationary environment that we’re in now. We all know ADR doesn’t induce demand, but inevitably we drop rate [during downturns] and it didn’t happen,” said Manley.
“If you look at a lot of resort destinations it’s [ADR] actually surpassing 2019 levels right now, which is amazing,” concluded Felsen.
