An interesting thing happened on the way to seeking additional hotel revenues.
Most hotels are experiencing open staff positions, which curtail the delivery of services that could result in revenues.
Two and a half years after the onset of the pandemic, we are dealing with yet another Covid variant – lack of manpower. Let us call this the MP 22 business variant.
But there are very real possibilities for additional revenues, if we focus on how to obtain it, and not be overburdened with disappointing recruitment results. We are a smart industry and in some cases can use technology as a remedy for our open positions, in other cases, we can do a better job with basics. It is time that we stop frustrating ourselves with all our staffing efforts and develop concepts that will match up with the available manpower and the available skill levels that are applying for jobs at our hotels. We can beat the MP 22 business variant with the right treatment.
Let’s Start With When The Phone Rings
There is data that supports the fact that our many sales teams are often understaffed, under trained, and in some cases inexperienced. Many newer sales managers today believe that an electronic relationship with the customer is as good as a personal relationship. Here too the MP 22 business variant is at work. An inquiry was recently made for a hotel, on the Brand website. The ever-efficient brand web site immediately confirmed that the inquiry had been accepted (nice), and even better, we were assigned a tracking number!
Further, the brand web site then suggested that if the target hotel does not initiate contact within 2 business days, to call the hotel directly, and provide the tracking number. Where is the hotel and brand showing an eagerness for the business? In this case, the hotel never did pursue the business. The brand is complicit in the relaxation of selling aggressiveness. The standard should be to get back to the customer within a few hours. The MP 22 business variant has suppressed the fundamental selling insecurity we must have to reach the customer first before other competitors.
So, the moral here should be obvious, and hopefully our selling weapons are no longer filling in and covering the front desk or cleaning rooms. Let us recommit our sales teams to engaging and selling. Let us expect basic standards, and in doing so, you will find additional revenues. That said, without even prospecting.
At another hotel, the MP 22 business variant only affected the sales team mildly. In this case, the sales team member did engage the customer immediately, and qualified the customer including dates of the event. Later, when the sales manager followed up the inquiry, via e-mail, customer was told that rooms were available, but the weekend was a home date for the local College Football game, and there was no attempt to offer to book. Perhaps because there was an assumption that the customer would not pay a higher rate? But we will never know, because MP 22 had attacked the sales managers past fundamental selling training – Ask for the business.
The above 2 examples are more the norm today. These practices alone would typically put the hotel at a competitive disadvantage, except many are doing it. Those that do not, and immediately engage the customers, have a great advantage to close on more revenue.
Breathing Life Into Room Service
Room service has been forever a significant part of Hotel Nation. Until Covid, and now the MP 22 business variant. For most guests traveling alone, Room Service can be a sanctuary after a long day of frustrating travel. For couples, perhaps a romantic dinner. It can be highly profitable, and the guest will pay extra for the convenience.
But most hotels have been very slow to reclaim this revenue area. Cooks are already preparing meals for the restaurant, so this is mostly about a PBX operator, and delivery person. We have an opportunity to get back to being hospitable if we have the will, and can enjoy the revenue that comes along with this legendary service. And today’s customers are not even expecting, nor do they want that In Room Dining experience, as delivered by 5 diamond and some 4 diamond hotels. They are looking for a “Drop and run” style of service. This is supported by how some brands now approach this service, and the Brand packaging that supports current trends of room service.
Want more encouragement, and treatment for the MP 22 business variant? Let’s get digital. There are now software programs available that will provide your room service menu via QR code to the guest’s cell phone. Once there, it becomes a platform for placing the order, and charging it to your room. Think of the additional revenue just waiting for you, and the speed of delivery, as your customer can now order directly with the kitchen. No more dropped calls, no need for Room Service PBX. No need to fill the open position created by MP 22 business variant.
Smarter Hybrid Service Restaurant Concepts
So, we are faced with a serious manpower and talent shortage, yet we still pound the recruitment drum to fill these open positions in a traditional way. We continue to apply these old tools to a crisis and having the same disappointing results. So many open positions, so little time. And there is no remedy in the near future, unless there is a staffing epiphany.
As an industry we are smarter than this, and can adapt. Other industries have adapted to inviting the customer to participate in the delivery of service. It may be time for our industry to follow the path of the gas stations, banks, major Airports, DIY stores, grocery stores, and others. The key here is that it would not only solve some of those pesky staff openings but find the revenues that we desperately need in areas outside of ADR and Occupancy.
This brings up the topic of the definition of a Full-Service Restaurant. Due to Covid, many restaurants were closed or modified, with the approval of the Brands. Today, we have Post Covid hangover due to MP 22 staffing issues. But the Brands are restless and rightfully so. We should be eager to find new sources of revenues.
If staffing is keeping you from opening an outlet fully, let’s get smart, and explore a Hybrid concept. Especially for breakfast and lunch, if not for all three meals. The lunch exception of course would be when a large group is on their own at lunch. If you are a brand, best to consult with them first, about that what is today’s definition of Full-service restaurant. The language in some brands standards are not as specific as you would think, and may only reference “Table Service”, which can be vague and to your advantage. Hybrid examples are everywhere for one to study and adapt. Think of a popular bread concept in strip centers that begins with a “P”, and how that concept can work in a hotel environment. Great, fresh food concept, heavy on pastries, wraps, Panini’s and Salads, and incredibly presented. Perfect for breakfast and lunch, not bad for dinner. Although in most 3 and 4 diamond hotels, it may be better to retain that traditional table service with cocktails. Dinner is where your revenue and profits will come from.
Breakfast, even in the best days, had very low profit margins due to the labor. Lunch better, but not much. In most hotels, you just can’t support the staffing on hotel capture alone. With a Hybrid concept, it invites the customer to come to an ordering and deliver point, they become part of the delivery of service using technology (or a smiling face), and again are speaking directly to the food preparers. Low staffing required, and in most cases, no floor management.
This concept then puts our industry’s great culinarians on notice to deliver an outstanding, food-based experience for the guest that is unique and fresh, where word of mouth for the fantastic food can still be shared with others. With the average guest age growing younger, Hybrid full service makes even more sense. For them, a traditional, old-fashioned, full-service restaurant is less important, unless it is for a special event.
Technology, speed, great culinary, and a pleasant atmosphere to dine. From an operator’s standpoint, fewer open positions. Smart.
Inflation is Our New Business Partner – and it is Relentless
First, let us congratulate our Room Revenue Managers for the tremendous job over the last couple years. The weekly study and intensity that these revenue teams lose sleep about is amazing. In most cases, hotels have enjoyed additional profits like no other times, albeit aided again by the MP 22 staff openings. Rates and occupancies have been maximized in most markets, especially in heavy individual leisure markets.
Now, some small and medium group business is returning, as well as social catering. Along with that, an old friend (not really) named Inflation, which has not been a real concern for many years.
However, inflation is now our business partner and looks to be with us for quite a while. If you have not dusted off all the costing tools from when you built your Catering Menu’s, it is very possible that you now have a TYD profit issue. More importantly, you could be missing an opportunity for more revenue, by not raising your Catering prices. Each day that you delay, is a day that you do not enjoy the additional revenues (and profits) for your business. You should be doing so with the same intensity as our Room’s brothers and sisters have for room rate increases.
Each day, your customer is hearing the morning news, and again at dinner time news about the number one topic in America – Inflation. They are feeling it in their own personal finances and experiencing it when they go to the grocery store, gas station, or open up their utility bill. Now, more than anytime in the past, you do have a legitimate story to tell about reacting to high cost of goods (and not profit taking). Do not overlook this opportunity to enjoy more revenue, especially during the peak Catering months. Your bottom line will thank you, and so will the ownership of your hotel.
Keep Going – Words to Live by
Above are mentioned examples of revenues outside of the rooms department. Surely there are others. Many of you will have remnants of small committees, be it Safety, QA, employee relations. Tap into those with a side discussion topic of where you can get more revenues, and how, without the overshadow of the MP 22 business variant. It is time to manage past that with fresh ideas and without reliance on recruitment. Areas certainly could be within parking, retail, outside health clubs and pool memberships (Northern properties).
As you think these opportunities through, be fresh and open to doing so without added manpower, and don’t let this be a roadblock. Every day, senior hotel leaders manage through so many, many issues. Let’s be as smart as possible as we manage through the MP 22 business variant and find new revenue sources with all of the assets we have to sell at the hotel.