Who’s in charge?

Who?s in charge?

A recent consulting engagement of mine drew attention to a challenge faced by general managers that is seldom addressed in any job description I’ve read: the issue of who is responsible for the seamless integration of leased facilities into a hotel operation. This particular engagement involved an independently operated, full-service hotel in Manhattan. The hotel was achieving its RevPAR and bottom-line financial targets, but wasn’t hitting the high notes the city was experiencing in occupancy and rate. It was holding its own during a recession; however, with increasing new supply opening on a continual basis, “holding its own” was not a favorable financial prospect for the hotel’s future. The owner solicited my assistance in an operational assessment of the property. 

Before the requisite formal tour and meeting with management team and owner, I always take an informal tour on my own to get a sense of a hotel’s personality, energy and employee culture. What I immediately sensed in this hotel’s case was a disconnect in service standards. While the greeting at the front desk was warm and outgoing, the concierge desk was inattentive and distracted, and the restaurant somewhat in the middle. All three areas reflected different management styles and radiated different service messages. It was as if three separate entities were operating under the same roof, all within the confines of a small hotel lobby. 

I was soon to learn that my observation was correct; the hotel’s food and beverage, concierge desk and retail shop were all leased facilities. Although the owner was delighted with the rental income this arrangement guaranteed, there was clearly not enough attention paid to creating a seamless service experience for the guest.

It is not unusual for an urban hotel to lease out certain facilities to reduce financial risk and employment liability. I’ve heard all the arguments in favor of leasing. I admit that I’m not always a fan of the concept, as too much emphasis is often placed on the “terms” of the deal and too little on the “conditions” of the relationship. This is not to say that a star chef-operated restaurant can’t do wonders for the image, positioning and bottom line of a hotel. That situation, however, is not the norm for the average hotel. What is the norm is a deal struck between the hotel owner and the restaurant operator with minimal — if any — input from the hotel management team. Once a deal is inked, the hotel management team is left trying to figure out how to integrate the leased facility, whether a restaurant or concierge desk, into the overall hotel operation. 

After reading through this particular hotel’s leases and meeting with its management team, it was apparent that anything to do with leasing was the domain of the owner, while the management team’s interactions with the leased outlets were strictly at arm’s length. I set out to change this dynamic, and will share my approach in my next blog. Stay tuned!