.. a talk at Queen
Sirikit National Convention Center, Thailand
During crisis, most times, we think about
training staff, stop overtime-time payments, cut expense on your Human
Resources, unpaid leave policy or even lay offs. I cannot say this is wrong, as long as it is
most suitable and relevant to the situation.
On August 6, 2009 I was invited to be one
of the panelists talking about “360 degree management for the tourism and
hospitality industry during a “crisis” – organized by KBank, Thailand at Queen
Sirikit National Convention Center. (I
personally admire KBank a great deal for their continuous educational
activities for their clients and non-clients as what they have done reflecting
a sincere banking business).
I wish to summarize some of my talk in this
article as well as to extend some subjects here that I only lightly talked
about at Queen Sirikit Convention Center.
I was asked what the first thing was in my
mind when a crisis happened. My answer was “people”! How all
employees can work and help us to go through the crisis together as a team, as owner
or general manager could never be the sole person to fight and survive a
crisis. I did question the audiences (All
owners and managers) whether or not they arranged meetings, to strongly and specifically
communicate to all level of staff (even the cleaners) about the crisis
situation and on how everyone, as a team, will walk through all difficulties
during such and such a crisis.
Of course, the owners / general managers must
go to the meeting with clear goals and plans. The meeting must be arranged to
purposely have a productive two-way communication as all the employees will
need to buy the ideas and follow direction.
Some employees might like to contribute some
good ideas as well. I have personally seen
hotels’ management who left the staff in the dark and let the staff think that
during a crisis, staff better behave well, or they will be the first to be kicked
out.
This is very unhealthy management!
Next, for me, is still “people”,
this time about our potential target markets and our customers that may be able
to help to get through a crisis. Look
into all of the guest history and analyze carefully and effectively. You may be able to pull some good ideas out for
your next sales trip or your sales planning.
This must come together with all your relevant pricing and service
strategies. In Thailand, I have seen
many hotels cut down prices and believe that it will work to boost occupancy. Sometimes, it does indeed work when certain
factors just happen to fit in, but unfortunately most times it does not work
that easily.
What I like to emphasize is the “cost
strategy”! You really need to watch and audit every business activity to ensure
the costs are at a minimum and effective.
Each selling price must be carefully set with a very correct and minimum
cost. And, this has to be
well-communicated to all your department heads and staff.
It is easy –but very wrong – to say that the
breakeven point or loss is fine as it creates some activities for staff. This is mostly said by many SME (small-medium-enterprise
business) owners or management with no or limited hotelier background. I did
experience such a kind of statement as well in managing a hotel! I honestly think
this idea is explored to benefit some people for some purposes that nobody
knows!!!!! I think one does not need to be a General Manager to make a
statement like “It is fine not to make
profit; at least we have activities for staff”.
I reminded the audiences that during a crisis,
I do agree that sometimes the operators do receive some kind of customer and
agent pressure to lower the prices.
Nevertheless, costing is ultimately an important factor for the real profit
making.
I tried to explain that if you used to have
a price of 370. – Baht per head for your banqueting business, and you cut the
price down to 325. – Baht or even lower – you must be able to calculate an
exact Baht and Satang of how much you finally would make. Consequently, how
much of service charge your staff would earn.
The staff may work as hard as before or even harder with a lower service
charge to be received by the end of the month.
In the hotel industry, some operational staff very much depend on the service
charge for their living.
I come back again to the management
communication in the meeting! You have to inspire and educate the staff and eventually
convince them of how to go through the difficulties.
Some businesses can depend on lower pricing
with a bulk selling strategy. However,
in the hotel industry, you cannot over do it. It does not mean you cannot do, but, I say it
again, don’t overdo it, unfortunately many non-hotelier background management or
owner could not see the risk.
Many of owners or management accepted to
sell at a price that did not making any profit to just show their good face and
I think they disrespect their operating team.
Each and every hotel business process needs
people. So, to lower the prices with the hope to have quantitative sales will finally
affect staff motivation and the expense as you have to finally pay so much for
over-time, extra casual paid workers and so on and so forth and please note
that some managers never ever calculate things in detail in their whole lives. Therefore, they only look at the revenue and occupancy,
but not a detailed profit.
I added on another important thing! E-MARKETING. I shared a good story of the
company called Mai-BS (Thailand) which is very successful after only 2 months being
in operation. Its website is very participative
and popular. I told the audiences to
leave this important work to professionals and all hotel owners must seriously
invest in this as in Thailand, we can depend very little on our government for
any help. We all should better depend
and rely on ourselves, Kbank, and I wish to extend here that if you are in need
for more, you can also reply on Mai-BS.
Not to forget, you have to be very careful
of your expense! What I like to extend here is: I do not mean you have to be tight
with your expense. You should be
reasonable in your spending! For example; you can take out some of the light bulbs
from staff canteen or lockers or even from guest corridors and put out an
internal campaign on “saving” throughout the hotel. However, in the mean time, it is not wrong to
consider purchasing a “lazy susan” for your tables, as it gives convenience to
your guests and your staff – especially when you receive many complaints about
it.
Last but not least, I think whatever cost
saving exercises you have done – or will do -during a crisis, those saving
practices should be continued when the business picks up. I worked in a prestigious 5 star hotel chain
and I realized that each time we faced crisis, every GM excitedly called for
cost saving measurement. But once the
business turned well enough, we were never called or asked for any cost saving
meeting. I don’t know why? To me, this
truly reflects “crisis is an opportunity”, I think it is a learning that we
gain during crisis and we can also apply some of the exercises during the booming
period too,- FOR EVEN BETTER PROFIT AND OPERATING PROFITS!
I ended MY SPEECH that during the crisis;
we all can think big, set goal, set strategies, BUT every business process is
the most important activity for us to watch over. Sometimes, business is turned down due to a very
little mistake, from the way your staff or yourself wrongly respond or treat
the guests. So, look into your operation and ensure you
have “operational effectiveness” on your daily agenda. It’s like you are playing in a football (soccer)
match! Every second you can hit the goal.
© Dhevabanchachai Nate-tra (2009), Honorary
Advisor / Director, Mai-BS (THAILAND)
©
Dhevabanchachai Nate-tra (2009), Program Director at Travel Industry Management
Division and Acting General Manager at Salaya Pavilion Hotel and Training
Center at Mahidol University International College http://www.mahidol.ac.th
