Adding value the new-fashioned way
This blog is sort of a triptych for navigating hotel operations in a Class 5 economy. I’ll be sharing some of my adventures and a few “a-ha” moments that have helped us not only stay afloat, but ride the rapids and have some fun doing it.
As I tried to come up with a “new-normal” way to operate a hotel, I was struck by two major revelations.
The first is that improving NOI and hotel value must be your only mission. Everything else is secondary.
The second is that the Internet is dramatically and irrevocably changing the way a hotel does business and is the fastest, least traveled path to improving NOI.
Consider this: A decade ago, some 360 million people used the Internet. Today the Internet has some 2.1 billion users. If you’re reading this blog, you arrived here by way of a resource that was pretty much unheard of just a few years ago.
In the mid-90s, everyone had a fax machine. (I still remember being amazed seeing my first thermo-paper fax sometime in the 80s). Today, less than 15 years later, the fax has pretty much come and gone, and that rate of change is only accelerating.
The point here is that you must either embrace the change the Internet brings, or you and your hotel will end up on the same shelf as your outmoded fax machine.
I’ll never be accused of being a computer geek, but you don’t need to be a technology whiz to see the potential of the Internet. The fact is that 99% of the hotel industry doesn’t have a clue about how to harness the Internet, which means that even a modest effort could put you miles ahead of the competition. So I began reaching out to leaders of Internet-savvy retailers, who are way ahead of the curve compared to the hotel industry, to see what I could learn from them and translate into improved NOI at my hotels.
For example, one day we asked this question: How much more effective could we be if we used the Internet as our primary source for sales calls and relationship building versus the old-fashioned leather-on-the-pavement method? We started trying new techniques and new business models and generated year-over-year single-property RevPAR improvement of 27% and NOI increases of 34%. Not bad in this economy.
We are using the Internet to build a better mousetrap. Sometimes we get the mouse. Sometimes the mouse gets the cheese, but either way, we’re learning, we’re improving and we’re adding value.
I welcome your feedback, suggestions and ideas on adding value to your hotel the new-fashioned way. Together, we’ll find new solutions to old — and new — problems and add value to our hotels.