GM to GM - A Discussion That Will Help You Succeed!

If you’re in charge of a hotel, this article is targeted to you. I have met some really cool general managers throughout my career – some were my boss, others fellow colleagues and new ones are developing relations on the horizon. Each one of us has a unique job to do, depending on the property and the owner’s direction of business. I want to touch base this week on your purpose as the hotel’s leader.
While I’m not about to judge whether you’re a good GM or a bad GM, I am hoping to give some insight to the direction of your impact while you operate your facility. I have seen circumstances where GM’s work a fairly tight schedule coming in at 8AM to leave by 5PM and aren’t heard of till next business day. I know from first hand we, as GM’s, have a lot “to do” each day, but I question how we are truly impacting the business and its internal and external operations and I question if our efforts are just blowing sunshine up someone’s tush. While we no doubt, remain “busy”, are we contributing to the overall development of the business or just making ourselves look like we are. In this, I want to define priorities, planning, goal setting, communications, delegating, and the “take action” where needed.

First, take a reflective look at why your owners hired you. Are you turning a property around? Is their goal to make improvements to make it more marketable to sell? Are you a task-force manager who would solely focus on cutting all unnecessary waste, labor and services to prepare the property for a major overhaul? Are you charged in improving its performance and expected to grow it over future years? The answer to these questions will help define your role. Most owners don’t know what they want, other than to make money off their investment. If you did not establish their purpose with the property before you took the job, then you need to know as soon as possible. Let’s hypothesize that you are to improve its performance in effort for the investment to start making money.

In getting started, do you have a budget to work with? If not, develop one. You have to know whether your revenues outweigh your costs before you can determine where to prioritize. I’m going to assume you know how to create a budget. Now, let’s say your costs are 60% of your revenue. Now look at your labor…there will no doubt be an off-balance of labor where you will discover you are over in some areas and under in others. Identify your labor and decide if you need to consolidate jobs, re-position people or determine if there’s just simply too much overtime being spent (this shows people are being held accountable). Fix it. Next, establish your expectations to ensure consistency will be upheld at every level of discipline and performance with your staff.

While reviewing your budget, identify administrative and operation costs that are dragging down the bottom line. First places to look is usage of chemicals in housekeeping, maintaining an improper par level (too low an inventory will cause your housekeeping department to work harder at cleaning or too high – where inventory should be sold off), look at food costs (products could be bought at better prices, too much food is being prepared and not meeting the volume of business, improper food storage leads to waste and line cooks are carelessly cooking improper orders), front desk is comping rooms when they shouldn’t or giving huge discounts without guidance, maintenance is a department of chaos where staff can’t find tools and equipment or materials to fix issues causing them to constantly buy more. Once these issues are addressed look at your revenue. I bet you’ll find old accounts that are driving down your room revenue – 'cause someone made a deal just to get the business. Change it. It is not worth making a deal with a construction company who is going to pay $40 a night for three guys to stay in one room while you’re only getting maybe 10 room nights a month. At the current going rates (even for today) your ADR should be somewhere around $75/night. (This does not speak to budgeted properties where the ADR is typically $40) If you’re a mid-scale property, there should be no excuse why your ADR is not near $75. I’m not talking RevPar. If your occupancy is low, your RevPar would reflect approximately $55/night based on a $75/night rate when your occupancy struggles around 40%. Your job here is to drive the sales.

Beyond your old accounts, it’s important to develop your market plan when you review your revenues. First question here is, do you have a market plan and/or when was the last plan developed? If you don’t have a market plan in place, create it now. By using your revenue reports, you can determine where your revenue is coming from, which market segments are apparent and identify where you are lacking. Identify your services, rooms, features and geographical location when identifying your market nitch. Who are your competitors? Are you a mid-scale property competing with a four diamond property? Make sure your comp-set is properly being reported and well designed. Put the plan in place and start developing your sales from that.

Next, identify with your staff – do you have an employee, whether a manager, supervisor of line-level who shows complacency, constantly unmotivated or a member who does not contribute to the team? Get rid of them. There is no room for lack luster performance when you’ve given an opportunity after applying leadership, expectations and having set goals; such performance will only continue to drag down your operations.

Now, apply yourself – don’t waste your planning efforts to watch the numbers change while sitting behind the desk. Get involved and participate with your staff. It is essential to work alongside of your staff where you gain so much – you’re a motivator, you will be able to identify issues quicker, you will be a presence to the operations that will ultimately prevent problems from occurring. Just as importantly you must be a presence in the community for both corporate and residential needs. You haven’t met the mayor yet? Then today’s the day. You don’t know who’s in charge of the local high school event planning? Call them today! You don’t know who your chamber director is? For shame! It is essential to meet and greet local leaders to understand your market as well as to build your business.

Be an “involved” GM … don’t leave at 5pm to not return. For that matter, take off at 3pm and come back around 6:30pm. A lot of guests check in during this time and it’s your chance to meet them, help your staff and be available when an issue arises. (Notice I said “when” an issue arises, not “if”. I’ve been in this business too long to know better that in the world of hotels, you must always be prepared. Even a great planner, who has covered all preventable issues, has the opportunity for something to back fire).

Lastly, invest into your staff…spend your time, energy and creative juices in motivating them, giving them direction and a lot of “at a boys”. If you have monetary resources, use that too, but do so sparingly as your job is to raise the bottom line, not spend it. Staff loves extra money – but on a more continuous basis, they will choose recognition and promotion far more than a few meager bucks that don’t truly contribute to their overall growth.

And Owners…if you’re reading this, please note: if you insist on being a “hands on owner” apply the same rules. Your ownership does not give you special privilege to run your operation any way you want at any given time, just because it’s your property. If you want to see your operation succeed and you feel you need to be the GM too, then play the role of GM, not owner. On the flip side, I encourage owners to let the specialist run your business. This is why we have property owners and General Managers. The GM’s are the specialist. If your GM is not doing their job after you’ve given them the knowledge, tools and autonomy needed, then it’s time to get a new one. And owners, if you do have a GM, but you still remain “hands on” I’m going to say this as Tough Love – take your hands off the wheel. When we drive our car, we can only have one driver at a time. Two drivers is an accident looking to happen.

Do you feel you could use some extra tips, ideas or guidance for your operations? Don’t hesitate to contact me! Have a tremendously productive week; get out there and acquire new business, build new relations, participate with your staff and hold your staff accountable! When you apply these simple rules, you will see the improved numbers in no time flat. And one last tip: Keep your Go-Go Juice nearby at all times – it will keep your engines running! Cheers…