Every business should be profitable, but how do you best manage profit-making and the employees who make it happen? Hotelier Rocco Bova digs into the core meaning of leadership, and how it affects a hotel company’s finances.
Highlights from Today’s Episode
Episode Sponsors: This episode was supported through the generosity of the following sponsors:
– Groupe GM (groupegm.com) –
For the last 50 years, Groupe GM, has been a leader in the luxury amenity industry. The Group proposes a 360 solution from manufacturing to distribution on cosmetics amenities and dry accessories. groupegm.com
Episode Transcript
Rocco: We need to understand how much is enough and how much profit do we really want to make. Because if an investor is investing X amount of money and expect a return of, let’s say, 100% within five years, then we should rethink that. Maybe we should get our return on the investment in 10 years instead of 5. Because if we get in within five years, that means that somebody’s gonna pay the price. And that somebody can be payroll. We call it payroll, but that’s actually human beings.
Robin: Welcome to the “Innovative Hotelier Podcast” by “HOTELS” magazine with weekly thought-provoking discussions with the world’s leading hotel and hospitality innovators. Welcome to the “Innovative Hotelier Podcast,” brought to you by “HOTELS” magazine. I’m your host Robin Trimingham, and my guest today is Rocco Bova, hotel and hospitality consultant and founder of “My Humble House.” Today, we’re chatting about the importance of balancing purpose with profit in the new era of hospitality. For the last 50 years, Groupe GM, has been a leader in the luxury cosmetic amenities industry. The Group proposes a 360 solution from manufacturing to distribution.
With over 40 International brands and its worldwide distribution network, Groupe GM offers different shapes and sizes of eco-friendly products in hotels all over the world. Discover more on www.groupegm.com, Groupe with an “E”
Robin: Welcome, Rocco.
Rocco: Good morning, Robin. And good morning to everybody or evening wherever you are.
Robin: Well, thank you so much for taking time to chat with me today. It’s a pleasure to meet you. I was quite interested when I was reading about your background because you’ve led some of the most successful luxury properties in the world. So, can you tell us what prompted you to leave this career and start a consultancy?
Rocco: Well, Robin, we all know what we’ve been through the past couple of years and I cannot lie that I was one of those affected by it. Affected in a positive way though, I have to say. I actually did not lose my job during the pandemic. I worked throughout the pandemic and then, believe it or not, on my last day with my previous employer, I meet my new employer. So, that was a kind of back-to-back. In fact, I was hoping that I could finally get my sabbatical leave that I’ve been waiting for more than 25 years and I couldn’t. So, I got into another job, and then about 15 months later with this new job, which was not going anywhere, I said to myself, “What am I doing here? Maybe it’s time to do something, a change in my career, change in my life. I will turn 52 this December.” And I say, “Maybe it’s about time to have a change in my career.” And my wife actually was the one who gave me the tip and said to me, “Rocco, why don’t you try to be a consultant?” And then I started with one and then two and then three. And then I had up to seven clients at the same time. So, I didn’t know I was so famous and successful in such a short period of time, even though I’ve never been a consultant.
Robin: Well, I think that you started at a very fortuitous moment in that there was such a shake-up in the hotel and hospitality realm that everybody was in need of some sort of assistance. I was intrigued to read that you believe tourism enterprises that exist solely for profit are missing the point. Talk to us a little bit about your perspective on this.
Rocco: Totally. In fact, the last two employers I work for were very much aligned with what I’m talking about. The first employer which was Chablé Yucatán in Mexico, I’m talking about. We actually made a deal that when the pandemic started or just before he came to Mexico, I could foresee this coming. And I put this in advance to him and I said, “Eduardo, we got to do something here. We need to be ready and I want you to start with me. Cut my salary by 50%, but please keep everybody on board because the moment the tourists will come and will come back, if we are not ready, we are gonna miss everything.” And he was shocked to hear what I was talking about, and he said to me.. after a few seconds of silence, he said to me, “Okay, Rocco, we appreciate your gesture. We accept it and I commit that we’ll keep everybody on board. And we’ll do everything possible to sustain over the next months or whatever time is going to be.” That to me, gives me a sign of a visionary, not just a leader, a visionaire that believes that profit is not everything. And then the second person, the second employer, or the second person that took me on board with his company, he was only having a master plan in mind. He contracted an architect designer, but he didn’t start anything yet. But I learned from people working in that company that he paid a hundred percent of the salary of every single employee during the pandemic, at a huge cost to him because he has to go and fish in his bank account to pay salaries. Again, and I see the loyalty of the people, I can see the sparkle in the eyes of the staff. It’s a very different approach. And definitely, what most company have done for good or for bad reasons, I don’t know and I don’t want to judge anybody because I’m not in their shoes. But I can see the struggle of many companies right now because they cannot find staff. So, guess what?
Robin: Yeah, good point. I’m right there with you. I have what I’m gonna call a very altruistic perspective on a lot of business projects and situations. But I think this will be a new concept to some of our global listening audience. In your opinion, why does profit need to be the consequence of purpose in the hospitality industry?
Rocco: I don’t think it’s only about the hospitality industry. I think we need to rethink about global business altogether.
Robin: Fair enough.
Rocco: We need to understand how much is enough and how much profit do we really want to make. Because if an investor is investing X amount of money and expect a return of, let’s say, 100% within five years, then we should rethink that. Maybe we should get our return on the investment in 10 years instead of 5. Because if we get in within five years, that means that somebody is gonna pay the price. And that somebody can be payroll…we call it payroll, but that’s actually human beings and anything else that can go with it, the benefit that we give to our team members. And this is why I say to myself, we have to change the business model of the industry. Of course, I talk about hospitality because its very dear to my heart and I’m very passionate about it. But actually, we need to change the business model of any business and rethink how much is enough.
Robin: I love how you put that. I know that some of the companies that you’re working with now, you’ve been advocating for creating a payment structure that creates a sense of ownership within the employees themselves. How does this work?
Rocco: It’s obviously something that requires a little bit longer time to…you know, maybe this podcast will not be sufficient. We’ll need to get… But I’ll give you an idea, I’ll give you an example. And if you have worked in the hospitality industry, I’m sure you understand this very clear. If we talk about two things, efficiency, which is time and, let’s say pilferage. Let’s call it pilferage, because at the end of the day, we know that things disappear in our business.
Robin: They grow legs, we say. Yes.
Rocco: They grow legs. Okay, I just give you two simple examples. If you improve the efficiency of every team member in the business unit, imagine that you can do the same job, exactly the same job, with 30% less of staff or 20% or even 10% less of staff. You already save 10% of labor, which translate into money. So, let’s keep this 10% somewhere. Let’s take another, you know, this growing-leg stuff and the pilferage resume to another 10% of your income. So, let’s get this 20% that you are saving monthly and instead of saying, “You know what, I’m gonna put this into my pocket.” I’m saying, “No, I’m gonna share this with my team” because they became more efficient, they are more conscious and committed to my company. They care about my unit and they care about the equipment that is there so it doesn’t get broken, or they just say, “Well, the owner has a lot of money, they just buy a new one.” No, they care. So, if I make people responsible, I can save up to 20% or probably more than my income. So, imagine if we translate this into profit and then share it with the team members, how much more would I care for that company? There are a lot of people like me, I guess.
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Robin: I think that’s an excellent question. Some of our listeners are gonna require a little bit of convincing here. Talk to us about how this employee ownership approach can actually result in better customer service, which will then create the profits that the hoteliers are looking for.
Rocco: Well, Robin, I worked for many companies in my lifetime. I was very lucky to work in so many companies that…most of them. And I saw that happening in those very companies. But to me, part of it… Obviously, there is no company today that shares profit with all the team members, not that I know of, at least. But then I saw it happen because I could implement some of the values of “My Humble House” and some of the philosophy of “My Humble House” in my past two employments. And I saw that happen. I could prove it to myself at least, and to the owner, I was working for that with the right leadership and with the focus on caring for the team members, the team members produce more. And I could prove this even the second time when I left that company. And people, somehow they give me feedback when they come back to me and they tell me, “Rocco, we miss when you were there. This is not the same.” Of course, it’s nice to hear that, but to me, I don’t take this as a flattering compliment. I take it also as a way of me being able to transmit a certain value, a certain vision, that people have been working with. When a leader is able to influence others, that’s when really he’s a leader. Otherwise, he is just a boss. I think this is a very clear statement. And this is basically what I can say. So, what we are lacking right now is actually to have the right leaders in the right place. In fact, there is so much shortage of leaders right now that we have to get anybody just to fill a position. But that’s not the right approach.
Robin: Yeah, I agree with you. Leadership is struggling. I would just say in every industry at the moment, because how we do business, how we interact with each other, that’s in the midst of a huge life-changing global transition, and we’re moving forward and we are not going back to the other way. So leaders try to lead and also to learn at the same time. I think you can almost distinguish a superlative leader by their ability to learn. Let’s change the subject a little bit here. The tourism industry has often been criticized for over-commercializing the natural environment for the sake of making a profit. In your view, why is it essential for hoteliers to interact or even nurture local communities as a whole in the area in which the hotels reside, just so that they can be successful?
Rocco: Actually, I tell you about one mistake I made in my career because I think people learn more from mistakes than from good things. One mistake I made in my career, I made many, obviously, but this was more remarkable, that really made me understand the importance of knowing where you are located and how much you, as a business unit, can have as an impact to the community. So, I was working in the Dominican Republic, and that was my first time in the Caribbean. And was my first time also as a general manager. And I have to say that my mistake was not to learn where I was going to, and not to know much, if nothing, about the place where I was going to work. I also have to say that I didn’t really get much support in that sense either from the company side and say, “Yeah, Rocco, you know, do this, do that.” You know, get some directions so that I could get things right. But that’s okay, I also take my responsibilities. But definitely, I miss the point completely by not knowing where I was and by not knowing about the people. Now I’m returning as a consultant to the Dominican Republic, and I get it completely because I had not only a failure that helped me learn, but I also had another six years to learn about the community here in Mexico, for example, which is one of the best-ever example of the intrinsic culture in the country. I have not seen many places in the world where the culture is so much into the veins and the blood of its people. Mexico is the best example, in my opinion. I’m sure there are more countries, but that’s the best example I can give. But when I came back to Dominican Republic just a few weeks back, and I’m going back next month in November for another two weeks to consult a project there, my past two weeks were a walk in the park, I had this immediate chemistry with the staff, immediate. And if you don’t have this chemistry with your team members, they will not work for you. They will not be able to perform to their 100% because you don’t become one of them.
Robin: Yeah, you don’t have the trust. I agree.
Rocco: You are a foreigner. And that’s what I learned by exactly knowing your destination, but exactly blending with the culture and understanding the community. And with that, you actually contribute to the community.
Robin: I think you’ve given us all a lot to think about today. We only have a minute or two left here. What is the downside to not embracing these fairly radical changes that you’re recommending?
Rocco: It is said that sustainability, the world, the sustainability, it cannot be achieved. It will only be achieved unilaterally, maybe. But it will not be achieved at 360 degree, where you contribute to your business, you contribute to the community, you contribute to the customers, and possibly contribute to the climate as well. If we can contribute anything to this planet… Because the moment we do something, we make a mess. But if we can do these four corners, of these four segments of our contribution, then we will be fine. Otherwise, it will be just sustainable from a earning profitability point of view but that’s not really being sustainable.
Robin: Rocco, I wanna thank you so much for your time today. You’ve been listening to the “Innovative Hotelier Podcast,” brought to you by “HOTELS” magazine. Join us again soon for more up-to-the-minute insights and information specifically for the hotel and hospitality industry. You’ve been listening to the “Innovative Hotelier Podcast” by “HOTELS” magazine. Join us again soon for more conversations with hospitality industry thought leaders.
