Economic Fundamentals-Making Them Work for You:Tom’s Take

April 5th, 2010

US became a world power based on our manufacturing prowess. Our world role as a manufacturer of products has greatly decreased.

This recession is the first instance that the government is creating most of the jobs (since the Great Depression.) Their attempt of course is to restart the economy.

Unfortunately, the loose spending policy and stimulus by the Federal Government, and the willingness of State, County, and City Governments to continue overspending does not contribute to a sustainable recovery. Our government continues to deal in microeconomics instead of macroeconomic fundamentals. The governmental policies continue to create asset bubbles. Sooner or later, like all bubbles, they will pop.

How do we protect our businesses?

Understanding the above is the first step. Second step is protecting our companies by minimizing the business we do with asset categories that are bubbles, like commercial backed mortgage securities. If we have to deal with them, then we each need to recognize we are dealing with risky markets and we need to develop alternatives as fast as we can.

There’s nothing wrong with doing business with risky sectors of the market as long as we understand them and don’t depend on them.

How do we protect our businesses? If government at all levels is taking a larger role in all aspects of society, then we need to structure our businesses to attract more government business.

Some of that business will be directly from the government. More business can come from various businesses and organizations that do business with governmental agencies close to you. Identify and market to those companies to encourage them to do business with you when they are in town.

Be proactive identifying business opportunities based on today’s market conditions.

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Tom’s Take: What Do Transient Guests Want?

April 3rd, 2010

We all assume we know what our guests desire when they stay with us. Do you really know or are you assuming you know?

Do you need more or less amenities?

Some hotels and companies do an excellent job surveying their guests. These hotels have advance knowledge on their customers changing tastes.

When was the last time you surveyed your guests when they checked in or out?

Start by giving guests a 4″ x 6″ card at check in that asks: Please indicate the 3 things we can do to make your stay enjoyable. Then have 3 lines. At bottom ask them if they would like you to remember these for their next visit. If so please enter their name and email address.

At check out give them a second 4″ x 6″ card asking them to list the 5 most important amenities you can offer. At bottom ask them if they would like you to remember these for their next visit. If so please enter their name and email address.

Giving guests blank cards enables them to tell you exactly what is most important to them. After the guest has left have your front desk staff indicate on the card whether the guest is traveling on business or pleasure. If possible identify the business the guest is in.

Several hotels are starting to survey their customers each time they check in. The hotels have developed follow-up mini-surveys for repeat customers. Better service starts by understanding each of our guests. The above program cost is typically less than $25 per month. If you don’t have the ability to print on 4″ x 6″ card stock, then use 8 1/2″ x 11″ 28 pound paper stock. Run it through your photocopier and cut it into quarters.

To run efficiently, we each need to apply “zero based” practices whenever possible. This means starting without preconceptions. Several hotels that have done this have found they could eliminate some of the room amenities they provide “as a matter of course.” Of course these hotels have to meet brand standards. They have also been able to suggest to brands that some amenities need to be available. That doesn’t mean they need to be in the room.

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Keeping the Pipeline Full

March 31st, 2010

Sales has always said that if the pipeline isn’t full not much will come out as confirmed bookings. Another analogy that is used is the sales funnel.

How do you know if your sales staff is making enough of the right calls to generate the business you have projected?

Start by looking at your historical bookings over the last 4 years by market segment. How many sales calls in each market segment did your sales staff make to achieve those bookings? Are you satisfied with that booking pace? If not, identify the percentage increase you expect from each market segment. Then simply increase the number of sales calls for each segment by the percentage increase you desire.

    Test your market segment expectations.

    It’s easy to set goals and expectations. Making sure they are realistic is a separate issue. Your sales team has to “buy into” your sales goals and expectations.

        Can your sales staff realistically make enough calls on former or potential customers to meet the sales call goals by market segment?
        Are there enough potential customers coming to your area in each market segment? If not, how can you increase sales from existing customers in the market segment to meet your booking target for the segment?
        Test the assumptions on both of the above with your current sales team. Then sit down with them and assess the results and where they feel modifications are needed in the targets. Then ask them what additional market segments they feel the hotel should sell. The sales team can’t just say the targets are unrealistic, they need to be responsible for identifying other sources that could generate the business in the time they have to sell.

    Now step back and identify what additional training your sales team needs to meet the goals. We are all familiar with “order takers.” Today we need people who can find business and then sell the business at the rates we need. Our customers still want to get the best deal possible, but most also know that the markets are starting to change. They are willing to listen when your sales staff sell the value your hotel offers for the price you want to charge.

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Economic Analysis: Tom’s Take

March 28th, 2010

Where’s US economy heading and how do you make it work for you personally and in business?

US economy has never dealt with a recession like this one. We hear lots of talk about U shaped or V shaped recession, with few others thrown in. Appears to me we are closest to recession that has held Japan down for many years. Plain old stagnation. Can it switch to a stagfation? Yes, but the way we need to react as individuals or businesses is the same.

Why don’t we care which it is?

In a stagnation, the economy just doesn’t have much recovery. In a stagflation, we add inflation to the mix.

What’s different from previous recessions?

In past recessions, small business has lead the recovery. This time government is trying to lead the recovery in the US, and internationally in those countries most affected. Many states in US are in serious financial trouble and are raising taxes. Likewise many counties, cities, and towns. In the past we have not experienced the severe budget shortfalls at all levels of government. As governments at all levels have to raise taxes to make ends meet, it significantly slows the ability of American business, especially small business, to recover.

Whether government overspending just slows the recovery or leads to inflation, the result will be the same. A very slow recovery for the US economy, and by extension, other countries that are severely impacted. Increased government taxes and programs adversely impact business two ways, directly from the taxes, and indirectly from time lost adhering to more governmental regulations.

What’s solution for individuals and businesses?

Reduce debt and increase cash reserves. The goal is to have sufficient funds to take advantage of an upswing in the economy, personally or as a business. Or to preserve existing personal or business lifestyle should inflation pick up.

Personally, people need to do everything they can to reduce their amount of debt. Reduced debt enables increased savings or simply paying cash for more future purchases.

Many businesses, especially small businesses have done excellent job of reducing debt and expenses. Now they need to identify ways to increase revenues while still holding costs down.

How can business increase revenues?

Find new sources of revenues. Existing sources of revenues will not be enough for most businesses. Then back it with great customer service. As an example, have real people answer the phones. Use voice mail only as a last resort. Biggest customer complaints is not finding a phone number for a business and then only getting voice mail, that often goes unanswered. Business can not afford to let any sales opportunity go by, and providing great customer service enables more sales opportunities.

Share your success stories.

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HR on Wheels: Employee Appraisal System Performance

March 26th, 2010

Is your employee appraisal system driving performance or just a paperwork exercise?

In a previous posting I reviewed the top ten issues to assess in your positive employee relations. One of the most important issues is making sure that your performance reviews include both results and behaviors and has a positive impact on behavior and engagement.

Do you dread doing your performance appraisals? Do your employees dread receiving them? Do the reviews measure the aspects of your employee’s positions that are important to you now or are they the same forms you have been using for years? Maybe you aren’t providing meaningful feedback.

If you haven’t taken a close look at your forms in the past couple of years, now is the time. Today we will just look at manager’s reviews and make sure that you are measuring against clearly stated expectations.

The first section should be objective expectations for the position; Profit, Sales Revenue, Guest Scores, Turnover, Internal Audit Scores and any other clearly defined objectives. The expectations should be spelled out prior to employment or at the beginning of the year. It is simply a “Yes” or “No” to whether or not they met them. Or it can be as clearly defined as making 95-100% of budget is “successful,” and 94% equates to “Needs Improvement”.

However, I see reviews all the time that take objective issues and make them subjective. They become subject to the whim of a manager who likes the person and can’t bear being the deliverer of bad news. It allows managers to allow “mitigating” circumstances to change the evaluation to a satisfactory performance. Get these out of your reviews.

Once you have looked at the objective portions of the performance review, take time to rate their behavior. What are the behaviors you evaluate? Has your management team sat down and talked about what is expected and how it is defined? What are the behaviors that are expected? I suggest evaluating these areas in terms of “Strength”, “Competency”, or “Challenge”. It defines the behavior clearly.

Some of these behaviors might include:

  • Leadership
  • Communication
  • Team Building
  • Planning
  • Problem Solving
  • Technical Skills
  • Decision Making

When you take this positive new approach to your reviews, your employees will look forward to knowing where there career is going and that they are being evaluated against clearly defined objectives rather than against another employee.

Can I assist you in this transformation in your company? If so, contact me at:

scottwheeler@HRonWheels.com

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Attracting Millennials to your Hotel

March 17th, 2010

Millennials are more social than Baby Boomers. Staying in their room working all evening, or watching a movie doesn’t hold a lot of appeal. They would rather work in the lobby or an open business center, even if they are not conversing with others. A key is a roomy business center. They are not interested in seeing how many people can be crammed into a 10′ x 10′ “business center.” They’ll work in the lobby first.

What can you do to encourage them out of their rooms?

  • One hotel started offering popcorn from 4:30-7 PM weekdays. Guests checking in came back downstairs. Business travelers enjoyed the popcorn. The popcorn encouraged conversation. So this select service hotel got a permit to sell beer and wine. First month on the program beer and wine sales topped $10,000. Now they are looking to add simple sandwiches. Word is spreading, and the hotel picked up additional 221 room nights in Feb. They now lead their market segment by 20 points. (They were third in the segment.)
  • Another hotel had a very small lobby. They moved their fitness room which had been just off the lobby and next to the pool. They converted that room to a “great room” with a big screen TV, 3 computer work stations, 3 game tables, complete with decks of cards, backgammon, cribbage, etc. They also added 3 vending machines. First month, vending machine sales topped $1100. Now there are typically 5-10 people in the room from about 5-10 PM weekdays. Families use the room on weekends when kids games replace the cards, etc. No increase in repeat bookings yet, but no attrition either
  • Another hotel knew a retiree who loved to make homemade donuts. They convinced her to make her donuts in the hotel from 5-6:30 PM weekdays. She always baked up few so the smell greeted guests checking in. Then she would fry up donuts and dip them in the frosting of the guests choice. The program was so successful it quickly attracted local business people. She now has taken over two rooms and the donut operation is available from 6 AM to 6 PM. Occupancy in Feb. was up 11 points over 2009 and ADR was up $3.

Share your success stories with us.

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Getting More Business from Top 20% of Your Customers

March 16th, 2010

Historically most companies get 80% of their business from 20% of their customers.

Each of us knows who our top customers are. Majority of a full service hotel’s profits come from rooms and banquets/catering.

What Are You Doing to Optimize Business from these 2 Segments?

Clients are telling us they are getting more meeting business the first half of 2010 from smaller companies.

We asked them what they were doing to increase the spend. Here are few of their comments:

  • Encouraging breakfast meetings. Very small groups can use the restaurant. Larger groups use meeting rooms. Some groups just want light breakfast, others want full breakfast buffet so they can start their meeting while the group is eating. A few groups broke up before noon, so providing breakfast ensured the hotel maximized F&B revenue from the group.
  • Another hotel found groups had lunch at the hotel, but let their groups go elsewhere for dinner. Hotel started selling evening cocktail reception from 4-6 PM for these groups. They got additional revenue from the cocktail reception with pool table, foosball, and poker for matchsticks including lessons. They found 25% of the group ordered dinner in the hotel so they could continue the games, which typically evolved into business discussions. The clients felt they got additional mileage from their meetings, and the hotel got additional dollars from their groups.
  • Another hotel surveyed the Top 20% to ask what additional amenities or activities they would like to offer their groups. One company wanted to offer something for their Secretaries who always arranged groups, but didn’t get to attend. They asked for a floral workshop. The hotel contacted a local florist who offered to do it for only the cost of the materials. No room nights, but a fun afternoon for Secretaries who also were given a tour of the hotel, including various room configurations.

What has your hotel offered groups that was unique and increased revenues from your Top 20%?

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HR on Wheels: Positive Employee Relations Assessment

March 15th, 2010

You do a Financial Audit every year! Don’t you?

Your people are just as important.

When was the last time you did an assessment of your Employee Relations Policies?

We all can feel the end of the recession coming. The hospitality industry has taken it on the chin. But good times are a coming. Are you ready?

Surveys show that up to 70 % of employees are awaiting the end of the recession, just as badly as you are. Employees want to start looking for new opportunities. Beat them to the punch! Assess your employee relations programs to make sure that you are the “employer of choice” in your market. Don’t give your employees reasons to leave?

The top ten issues to assess:

  1. It all starts with the impression you are making with your applicants. I know, you haven’t hired many employees recently. What better time to take a minute to make sure you are putting your best foot forward? Provide the “WOW” to their first experience with your organization.
  2. Now that they have agreed to join you, do they go home from their first day on the job impressed? Or did they walk around all day lost? Did someone take them under their wing? Answer all their questions? Make them feel at home?
  3. Do you have a system to ensure the consistent interpretation and application of workplace policies and rules?
  4. Are your supervisors and managers evaluated on their employee relations skills and activities? Do your managers formally communicate with employees on a monthly basis? Is HR regularly involved in assisting supervisors and managers in solving day-to-day personnel issues?
  5. Do your performance reviews include both results and behaviors expected on the job? Are reviews conducted on time each year?
  6. Do your incentive plans relate to behaviors and results that are currently expected? When was the last time you reviewed your incentive plans?
  7. Is there an appropriate relationship between compensation and performance? Do all employees understand those expectations?
  8. Is overtime assigned in a fair and consistent manner?
  9. Are local wage surveys conducted on an annual basis for non-exempt employees to ensure that you are competitive with your competition?
  10. Were exit interviews conducted and documented on all employees who voluntarily quit in the past year? Why are employees leaving your company? Is it their manager or is it because you haven’t been auditing these practices and are not a good place to work?

    11. To learn more or arrange for a 300+ point assessment to be conducted, contact Scott Wheeler at scottwheeler@HRonWheels.com

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Credit Checks & Employment

March 14th, 2010

Should employers be allowed to run credit checks before making job offers?

What Do You Think?

Washington and Hawaii have already passed laws banning credit checks on job applicants. At least 16 other states are considering similar legislation.

What are your views?

  • Should employers be allowed to run credit checks on all job applicants?
  • Just applicants for positions handling money?
  • Or should employers not be allowed to run credit checks on any job applicants?
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Find the Best, Not the Rest

March 12th, 2010

We’ve all heard the phrase, but how do we apply it when it comes to our recruiting efforts?

Who are the “best?”

People who currently have the skills needed to fill the job you have open. Individuals who exhibit the behaviors and motivation level to make an immediate contribution.

Are these people currently working?

There’s a 99% chance these people are currently working…in jobs they consider at least “Ok.” Most of these people are not actively looking…yet. They will listen.

70% of employees indicate they are willing to consider new jobs.

As the economy starts to improve, more and more employees are starting to “test” the employment markets. Most of us have had a tough go the last couple of years, small raises, little or no bonuses, reduced benefits, longer work hours, or more stress from additional responsibilities.

Keep your best, hire the rest.

How do you keep your best employees if you can’t pay them what the market says they are worth? Give them special assignments. Compliment them when appropriate. Learn their career interests and help them achieve them, even if it means they will leave you sometime. (If this is the case, they are going to leave. Far better to help them and be “in the loop” than to be surprised.) Most employers are surprised to find their employees have interests outside their jobs that are very important. Often just giving them the flexible schedule so they can pursue those goals will keep them working for you, even if they receive an offer for more money.

Most employees feel they are under-paid and that their talents are not appreciated. Of course they will listen to opportunities to make more money. Give more frequent small raises. Or reward special effort with a small monetary reward, even if it’s just a $25 gift certificate. Or work out a trade out with a competitor in another locale, close by for a weekend stay. Let your best employees know you are thinking of them.

Who are your best employees? Your Top 40%.

How do you hire the best?

  • Forget what you want to know about the candidate. Tell them what they want to know. Your objective is to attract great candidates. Once you have attracted them you can identify how to hire them.
  • Great candidate’s are looking for jobs that will advance their careers by giving them additional skills and responsibilities.
  • Once great candidates have applied, start the phone interview, or in-person interview by telling them how the successful candidate can grow with your property/company. Get them excited about your job opportunity.
  • Now start asking the questions you want to know about the candidate.

    • This will be a great opportunity to hire great employees if…

    Employers are ready to pay a little more than planned and are ready to offer opportunities to advance. Offer the best, to hire the best.

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