Monthly Archives: July 2009

Nagib’s Corner: Packaging Added Value

Hello Ladies and Gentlemen,

Here’s an interesting list of value added benefits to add to build excitement and distinction!

The pressure is certainly high to drive traffic into your hotels. However, while price is the easiest and quickest approach, it has no sticky factor or distinction that will give you any form of real or lingering impact.

Now VALUE is where it’s at. I’ve sent many articles on this topic and you’ve, no doubt, read much more.


·         Corp Guest: Complimentary ironing services! Now that is such a great idea! If you’ve had to do this every time you check in, you know what a drag this is!

.         Imagine if you could offer this service with one of your room attendants. Low cost, high value and you’d only have to do this for a select period in the day for basic clothing. WOW!

·         Families: “Wii Are Family Package” – can you imagine using one of your meeting rooms with an LCD and large screen projecting a couple of Wii games for kids to play?? Again, WOW! What a great marketing opportunity to bring in families! Offer it for a set period every weekend or some other periodic session, include popcorn, some lemonade and you’ve got yourself a fabulous feature for families!

Some repeat ideas from my email of May 13th – they’re just as valid now:

Happiness and Smiles:

–  Value offerings for families – include

  • Receptions (partner with restaurants to offer some sample foods and coupons, you provide the drinks)
  • Certainly breakfast for families
  • WiFi if not already in your offering
  • Attraction related coupons or deals
  • Area retailer coupons and sale information
  • Car wash or interior car vacuum (you know how messy cars get when you have kids in tow!). Include service (or at least provide for access to hose and vacuum cleaners).

-Packages, Packages, Packages

  • Family movie with pop & popcorn – package
  • Attraction entry passes, where possible
  • F&B related deals with neighboring restaurants or your own outlets

Note the sweet spot of $300-$400 over the two – three night stay

  • Package full deals so families can budget for meals and known cost
    §  You have at least $150+ per day, total for, say 4 people.
    §  Room, breakfast, WiFi – typically included in limited service hotels
    §  Lunch: fast food coupons @ average $20 per family (they can use these coupons anytime)
    §  Dinner: in house restaurant values can be strong. In absence of that option, include a certificate, preferably from a chain they can recognize the value with.
  • Depending on your market, and the demand over the weekend, you can price your rooms with a more comprehensive package that covers the basics – that makes you more attractive than others.

Provide a reason for travelers to be at your location:

  • Use your websites: 80%+ of the traveling public starts their search on line.
  • Tell them why they should be at your hotel and your location: remember, people can easily drive around 2-3 hours in a radius from their home. You want to offer excitement that makes your location stand out.
  • Consider Pay Per Click to get higher exposure – feature your attractions in metatags and in paid search key phrases.
  • Newsletters – if you have a database, now’s the time to send out offers, if you haven’t already.

If any of you have ideas that have worked, please do share!


Nagib Lakhani- RevMax Hospitality Consulting Services
O: (425)677-7866     C: (425)445-7750      F: (866)508-7866
4313 245th Avenue SE
Issaquah, WA 98029

Nagib’s Corner: Real Estate Strategy

Hello Ladies and Gentlemen,

A very interesting article and one that Chairman Robert Alter of Sunstone Hotel Investors sees as something that is going to become a more utilized move here in the United States, per the article below.

Of course, many investors, particularly family-owned enterprises, have full recourse loans and, hence, the dynamics of an option such as this pose a whole different set of issues. It is, nonetheless, likely we will see more situations such as this, especially after the summer.

Many owners are hoping for a shot in the arm from cash flows over the summer season. In the event this does not meet expectations, some hard decisions will become imperative over the fall. Lenders, it would appear, also have their challenges. Many articles have been written on the perspective from that vantage point. In many cases, working out an accommodation with the existing owner may be to the lenders advantage rather than they being transformed into a hotel operator in an environment even the best operators find an uphill battle.

Good luck to you over this season!


W San Diego Portending New Real Estate Strategy
Think giving the keys back on a hotel makes sense? Here’s why it may.
Friday, July 10, 2009

Glenn Haussman

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With many sectors of the lodging business in turmoil, most specifically hotel real estate, hoteliers are being forced to make some real tough choices. And one of the most difficult is letting a hotel go into default. On the surface it seems like the antithesis of a smart business decision. But in today’ reality, letting a hotel be taken back by the bank may actually make the most fiscal sense for an ownership group.

It’s a business model some are predicting will become a trend in the next couple of years as billions of dollars in commercial mortgage backed securities (CMBS) debt becomes due. And with room rates and occupancy depressed making those payments as originally agreed up may become impossible.

So how exactly does letting a hotel slip into receivership make sense? It was a subject that came up this week at the Americas Lodging Investment Summit Summer Update, held this week in Los Angeles.

Turns out that in some instances letting the property go can actually help the health of a company that has many other solid hotel investments. So freeing yourself of a property that cannot be saved financially may be an organization’s only recourse.

The most notable company to take this route of action is Sunstone Hotel Investors, which last month decided it was a better move to let the 258-room W San Diego slip into default rather than pump in $65 million of cash to what they considered losing situation.

According to Sunstone Hotel Investors’ Chairman Robert Alter, the company is sitting on $200 million cash stockpile and owes the bank $65 million.   “[We] chose not to make payments because we viewed it as sending more bad money after good. It looked like in the analysis [to us] the value was not going to reach the $65 million debt limit,” said Alter.

In addition to that property, the lodging real estate investment trust (REIT) has interests in 43 hotels comprised of 14,755 rooms primarily in the upper-upscale segment. Sunstone’s hotels are generally operated under nationally recognized brands, such as Marriott, Hilton, Hyatt, Fairmont and Starwood.

When Sunstone bought the property in 2006 for $92 million company executives expected the San Diego hotel industry to remain stable. But more supply flooded the market such as Hilton San Diego Bayfront which has 1,190 rooms and the uber upscale Se San Diego and two other Starwood branded hotels.

“There was a lot of equity initially in hotel and then income fell dramatically. New hotels opened. So that income went down dramatically,” said Alter.

According to Sunstone, the $65.0 million, fixed-rate CMBS mortgage that bears an interest rate of 6.14%. The mortgage matures January 1, 2018, and is non-recourse to the Company. Scheduled 2009 debt service on the mortgage is approximately $4.0 million. The principal amount of the mortgage equates to more than 30-times the hotel’s 2009 forecasted EBITDA, and more than $250,000 in debt per room.

With numbers like that, Sunstone representatives said they tried to work out the loan with the lender but “the special servicer has recently declined the Company’s proposed modifications,” said a press release.

Because of this, Sunstone decided to forgo last month’s debt service payment on the hotel’s mortgage.

Michael P. Levy, Managing Director with Morgan Stanley said he understand why Sunstone made such a decision and that is makes fiscal sense in this instance. “In general Sunstone has a fiduciary duty to its shareholders. You can do a lot with $200 million in capital and they thought that on a risk adjusted basis to deploy their cash elsewhere. This is something that is taking place en masse around the world,” said Levy. He also notes that more often bankruptcy and foreclosure are being used as tools to deal with the issue of committed capital and getting appropriate risk adjusted return on it. “That decision is taking place around the world today,” he said.

Michael Murphy, Head of Lodging and Leisure Capital Markets with First Fidelity Companies said the move will also free up more cash very month to also be utilized elsewhere. “Now they can clean up their balance sheet. Its axiomatically better and [they] saved [themselves] $2 million in cash flow,” said Murphy.

Alter sees this as something that is going to become a more utilized move here in the United States.

“When you can’t engage a servicer in a conversation, what else can you do? I believe by taking that action you set up the rest of industry to be put on notice. There was a lot of non recourse debt out there and people will look at the facts and decide how to proceed,” said Alter.


Glenn Haussman
Editor in Chief
Hotel Interactive, Inc.

Bio: Glenn Haussman is Hotel Interactive’s Editor In Chief, where he manages all editorial content for the hotel industry’s leading online information resource. Here he creates unique and in-depth content that stimulates and educates the publication’s … more

Nagib Lakhani   – RevMax Hospitality Consulting Services
O: (425)677-7866      C: (425)445-7750      F: (866)508-7866

4313 245th Avenue SE

Issaquah, WA 98029

How to Deal With Negative Questions in the Job Interview

by Carole Martin, “The Interview Coach”

You feel prepared for the interview. You are confident walking through the door to meet your interviewer. You have your positive experiences and stories ready to answer questions.

The interview is going along smoothly when all of a sudden the interviewer starts throwing “curve balls.” The interviewer begins asking for examples of negative situations – times when you failed or had problems coping with work.

You are not prepared to talk about your failures or times when you were challenged by difficult situations. You become flustered and you lose your confidence. You also lost the opportunity to get a second interview – or an offer.

Most interviewers aren’t attempting to be cruel when they ask for negative information – they are trying to find out if there are any “skeletons” in your closet – what problems you may have from past experiences.

So what do you do when you encounter those “curve balls?” You deal with them in a positive manner.

Here is an example of a question seeking negative information and how to deal with it.

Question –

Tell me about a time when you had a conflict with someone at work and how you resolved it.”


“I usually get along very well with almost everyone.

There was an incident that happened with a person who was not pulling his weight on the team and it was affecting morale. All the team members were getting disgruntled but nobody was doing anything about it.

I took it upon myself to have a talk with the person when the opportunity presented itself. It didn’t start out smoothly – he was defensive at first and resented my speaking to him about his work behavior. I was careful to let him know that I wasn’t judging him but rather was concerned about the team and the ability for everyone to get along.

Eventually he confided in me that he had some family problems at home that were affecting his energy level and patience. I listened attentively while he told me about his problems.

Once he became aware that his behavior was affecting other’s work he made a special effort to be more open and receptive. The team spirit improved greatly after that – as well as the productivity.

If you look carefully at this answer you can see that it offers many positives.

The answer starts out with a positive statement: “I usually get along with almost everyone.”

It’s a good strategy to add something positive about yourself and how you manage to get along with people before you begin to talk about a negative situation.

The next positive phrase used is about style: “I took it upon myself….” This statement shows initiative and ability to do something about the problem while other team members were content to be disgruntled.

This example also shows a sense of caring about fellow employees – taking the time to find out what the problem was and being a real “team player.”

You can see that there is a good deal of positive information that can be emphasized in an answer – even if it is an example of a time when things were negative.

Sometimes interviewers are trying to avoid making a hiring mistake that was made in the past.

In the event that there have been problems in the past at this company you will have demonstrated that those problems won’t be an obstacle for you. You have shown the interviewer that you will do what you need to do to resolve an issue or at least to get the facts about the problem.

Turning negatives into positives is an important skill to learn. When you are asked a negative question, stop and think about how you can refocus the question to include some positive qualities.

Carole Martin-“The Interview Coach”

Sample answer – excerpt from “Perfect Phrases for the Perfect Interview,” Carole Martin 2005 (McGraw-Hill)