Hotel News Now, 4/15/15 had excellent panel discussion on how hotel industry has changed and what it means for owners.
The build and hold philosophy rarely works when brands require $2-3 MM in capital every 3-4 years. Owners are forced to turn properties. Likelihood of getting $2-3 MM back plus additional profit is unlikely.
That totally changes how business is managed.
- Hotels require strategic thinking as well as operational thinking. Exit strategies are now as important as positioning strategy. Of course day-to-day operations are important, but they are only part of the equation to maximize the return on the asset.
- Strategy is now changing how hotels are built. Why build it to last 100 years if you are going to sell it in 3 years. Strategy is also changing on renovations. Owners no longer want to do one capital project a year when brands may change rules just after the project is done. Now owners want to wait until they know what the brands are demanding.
- Guests used to compare hotels to home. Now they are comparing home to hotels. Guests expect hotels to be more technologically efficient than the guest is at home.
- Owners are now doing better job using the napkin test. If it doesn’t pencil out on back of napkin, based on simple cost analysis, odds are it won’t pencil out using more detailed and sophisticated tools.
What does this mean for your career?
When you are interviewing look carefully at the physical hotel. Is it up to date? Getting tired?
ASK: When is your next pip planned? What importance do you place on keeping the brand? When does your franchise agreement come up for renewal?
If they look at you with a blank stare talk about the above and mention part of your decision is based on likelihood the brand on the hotel will be downgraded. Good companies will welcome these questions and your perceived value to them will rise. If you get body language that indicates they didn’t like you asking, odds are you have hit the nail on the head. It’s unlikely they will help your career. Think long and hard about any offer they make.
Your interviewing needs to evolve as the industry is evolving.