Creating value the new-fashioned way
I am certain, however, that — like it or not — we will be rafting through Class 4/5 levels for the foreseeable future. This new blog is a triptych, or road map, for navigating our Class 5 world. I will share some of my “adventures” and “a-ha” moments that have helped my colleagues and me ride the rapids and have fun doing it.
My biggest “a-ha” realizations have been:
- Improving bottom-line NOI must be our top mission. Everything else —RevPAR, guest satisfaction, associate satisfaction — is secondary.
- The Internet revolutionized our world — and is the fastest path to improving NOI.
Consider this: In the mid-90s, everyone had a fax machine. Today, less than 15 years later, the fax has virtually disappeared from office shelves.
A decade ago, some 360 million people used the Internet. Today the Internet has some 2.1 billion users.
Today most hotel reservations are made through the Internet, an option that was barely available 15 years ago.
My “a-ha”: I must either embrace the Internet, or end up on the same shelf as my outmoded fax machine.
Now, I’m far from being a computer geek. I’m much more of an NOI geek. I realized, though, that I didn’t need to be a technology whiz to use the Internet’s potential. I saw that most hotel managers and leaders I knew took small “toes in the water” steps on the Internet that didn’t move the NOI needle. Then, in frustration, they threw up their hands and went back to what they had been doing for years. That meant that even a modest effort could put me miles ahead of the competition. That motivated me to launch my first Internet “adventure.”
Swallowing my pride, I reached out to leaders of Internet-savvy retailers, who were way ahead of the curve compared to the hotel industry. That led to more conversations with specialized Internet companies both in and out of the hospitality industry. All these conversations led to a few pilot tests — some of which failed, a few of which partially succeeded and one VERY BIG WIN.
At one major property, using Internet marketing almost exclusively, we achieved year-over-year RevPAR improvement of 27% and NOI increases of 34% in the last six months of 2011. Not bad in this economy.
My “a-ha”: With this search-and-discovery, test-and-re-test approach, we can use the Internet to build a better mousetrap. Sometimes we get the mouse, sometimes the mouse gets the cheese, but our NOI keeps heading due north at a better-than-market rate. And, we keep learning, keep improving, keep creating more NOI and keep having more and more fun doing it!
I welcome your feedback, suggestions and ideas on creating more value for your hotel the new-fashioned way. Together, we’ll find new solutions to old — and new — problems and have fun doing it.