Top 10 mistakes when opening a hotel

After actively participating for 18 hotel openings as a manager and hotel consultant, I am somehow surprised about the fact that most independent hotel investors unintentionally – but also intentionally – make exactly the same mistakes over and over again which always turn out to be very costly!

I am writing down these “top 10” mistakes in a hope that this list might help some developers and owners.

As we are hotel consultants, we sincerely believe that a consultant must be the most honest, transparent, straight-forward and therefore most trustworthy person close to the owners and investors.

A consultant’s intention should NEVER be to keep hotel owners and investors ‘in the dark’!  A true consultant must educate advice and provide samples of good and bad practices.  A hotel consultant must also be a good teacher – not a lecturer!  We must guide and use all channels of communication to pass on knowledge to others.  We choose to write articles in a hope that it helps and inspires others.

Mistake No 1 – Vision and Mission.

Honestly, it is hard to understand that so many hotels and resorts open their doors without a proper written vision and mission statement.  OR, the vision and mission is most of the times not clear at all, or only clear in the mind of the owners.  On top of that, nobody communicates the vision and mission to managers and employees.  How the employees will know what is expected and understand the ‘big picture’?  As mentioned in one of our earlier articles, this silly mistake ensures that the business ends up following the habits of senior managers and owners and not the organizational vision and mission.

Mistake No 2 – Sales and Marketing? – No need now!

“I have many friends and they are well connected.  I and my relatives are well known people who are VIP.  We will all ensure that we will have many guests using the hotel and our facilities!”

Yes, don’t be shocked! – The above sayings are what I did hear from several hotel owners.  Those VIP hotel guests did come, yes, but they never paid their bills as they almost always expected to be invited since they are good friend of the owners.  The result of non-existing Sales and Marketing is very costly.

Mistake No 3 – Hiring of Departmental Managers.

Surprisingly, some new hotels and resorts do hire their Hotel Manager and Department Head Team just weeks before the opening and strongly believe that this will be fine.  After all, they are manager, expensive and should be able to get it right in a few days…… some owners think!

To my knowledge and from my experience, this is mostly done to save some hotel pre-opening costs as the needed money has been already lost during the construction process because of bad planning and ongoing adjustments to drawings and the building.

At one occasion I have seen that the whole management team for a 150 room hotel here in Thailand to be hired just 2 weeks before the opening.  The owner kindly fired the team after 2 months as in his opinion, the team was not able to implement proper systems and service standards fast enough.  Some of the best employees did resign as well, as the pressure working without a proper pre-opening was too much.  I say it again, if you don’t work professionally, your most capable employees will leave you first!

Mistake No 4 – Purchasing.

The purchasing process for equipment, utensils and amenities is all done by the owner without any hotel manager and departmental manager comments, input and specifications.  Once the manager and departmental leaders joined the hotel for the opening, there was no budget left for any additional purchases, as most of what owners choose are to serve their own preference and style, but not functional or practical to the workers and guest use.  So, the hotel or resort did end up with equipment and utensils which are not always usable, have wrong specifications, over-specs or under-specs.

Again, the owners or senior managers never stopped wondering why professional people left the company and why the quality of products and service are not up to any standard!

Mistake No 5 – Employee Restaurant and Facilities

Strangely, employees, employee facilities and welfare seem to be the least and least important thing on owners and developers minds. I know one hotel where the owner had even meetings with the employees, right after the opening, lecturing them how good the hotel will be, explaining how professional and generous the owners are as they did buy only the best qualities and products for the guests.

He said he is not stingy and use only the best and most comfortable furniture, amenities, cars, etc.  The owner also asked staff to work harder and be more committed to have a good hotel forgetting that all employees worked 2 months without a day off!   The employees listen and wondered what he is talking about while sitting on a dusty concrete floor inside a badly ventilated and non-air conditioned concrete shell of room, eating from a Styrofoam food box with plastic cutlery and without any proper uniforms and only one rest-room for 100 employees.  I am sure I don’t have to write down here what those employees did think and even say to each other about this owner after the meeting was over.

Mistake No 6 – Training

So far I found only 3 independent hotel owners and investors who actually provided proper facilities and time to have proper staff orientations and training for employees before opening the business.

Although EVERY single hotel developer said in the beginning that they fully agree and fully understand that training is very important and that they fully understand that people need to be trained before opening the hotel, the fact is that only the true professional owners did what they say.

Most of the time, employees did not go through any orientation program or basic training. And then, on the first day of operation the managers and owners complain the staff directly that they know nothing about the hotel, that they don’t follow hotel systems, that they don’t provide good service etc.

Mistake No 7 – Human Resource

In my humble opinion, any hotel that opening / running their property without a proper HR person, HR manual and HR systems are operationally committing suicide!!!

I have seen businesses where the majority of staff has been hired without having a written employee benefit list, written rules and regulations, written basic systems etc.  Employees have been verbally promised different benefits by different managers etc. The result was simply a disaster!

And then, once the management started to implement some standardized benefits for each level of employees and some standard rules and regulations, the Human Resource nightmares become did become reality as many employees complained that they only joined this particular hotel because of benefits verbally promised by managers. Not everyone promised the same…..

Mistake No 8 – Back of the House Design

Seldom is this area given good attention.  In most cases, back-of –house areas have been assigned based on vacant areas. I wonder so much why proper storage, proper offices with strategic locations, proper restrooms, proper walkways etc. are almost never important to developers and owners.   It is hard, and sometimes almost impossible to explain how the hospitality industry could make money from providing a good and smooth service and for this, within a rough back-of-house workflow.   It is not only the waiter and the front office staff who provide a service!  EVERYONE in the hotel provides a service and ALL Departments and employees work somehow inter-connected.

Mistake No 9 – Back of the House areas

  • Why some people believe that that staff dormitories not need proper restrooms, showers and a common room?
  • Why some people believe that employees don’t need proper food and variety of food?
  • Why some people believe that employees will not have cars and bikes which need to be parked somewhere?
  • Why some people believe that a proper Training Room is a waste of space?
  • Why some people believe that employees don’t need comfort?

Mistake No 10 – Good managers and staff are easy to find!!!!!

Those are some nice actual sentences from owners and developers to think about:

  • Spa Therapist not need training, just hire some sexy girls and let them massage the guests.
  • My gardener at my home can make up Bed’s; please consider him as Housekeeping Manager.
  • Don’t worry about Accouting and Purchasing; I have someone who works for me since 10 years and he is very good with figures. Right now he controls all my drivers in the transportation company.
  • I found a good Human Resource Manager for our 5-star hotel.  She is the wife of the local police Chief. Nobody will dare to complain.
  • My Son will be the General Manager; he just graduated and is very knowledgeable!
  • Just go to the local market, there are 100 of local people who would be happy to work at our hotel even below minimum wage!

Mistake No 11 – Hotel Opening Support from owners or developers other companies.

Yes, many business owners forgot to focus on some if not all of the above mentioned points and now they are very nervous and scared about the operation of the hotel.   So, they ask some family members and employees from other owned businesses which are most of the time not from the hospitality and service industry, to come and help to do the following:

  • Sales and Marketing,
  • Purchasing,
  • Finance Department,
  • Human Resources,

“I, my family and staff from the factory only like to help! You should not complaint, be happy about it!”

I am sure you noticed that I did end up with a “TOP 11” and not “TOP 10” list! Who cares! J

As a matter of fact, it should be a “TOP 100” list as there are so many areas and subjects to discuss about.

© Klaus R. Rauter

Managing Director

Mai-BS (Thailand) | Hotel Consultant and Training Company

http://mai-bs.com

Posted in Uncategorized

24 thoughts on “Top 10 mistakes when opening a hotel

  1. That is amazing truths and facts that i have just read.I did a preopening of a resort in Thailand with a rich family business.All of the above were so true and yes it was a nightmare.I hope people learn from what you have written…..THE TRUTH.

  2. I just took over a pre-opening hotel in Thailand, the property accepted guests since End of October 2009 but still 1/3 of the rooms and other facilities are not yet done. The old hotel has been completely renovated and 2 more buildings were added. As it is a branded hotel, the owner didn’t consulted the Brand regarding lay-out, equipment and now I am facing exactly those problems. I have no storage for my items, the refrigerators and deep-freezers are more than 20 years old and not working properly (cannot keep temperature), no back of the house, no vision and mission, many Department Heads were hired by the owner (their friends and friends of friends) and everybody seems just do look for his/her own department without realising that their doings also affects other departments. Those department heads who were not hired by the owner get hardly support for their work and equipment.
    Owner just looks at the cost, has no understanding for proper and professional equipment and if we need something, it takes several weeks and when we get it, it is second hand again.
    I wonder how we can be successful.

  3. This list could going on and on …..

    Working in this industry just for a short time, I could already see two kind of hotel owners. The one who has money and now wants to open an hotel and play as a hotelier and the true hotelier with decades of experience. The second group is much better to work.

    Now my thought. Is just me or to be professional is really hard for some people?

  4. Very interesting, I got my friend join new hotel as GM in Patong, Phuket and really like you said, he got 6 mistakes. And now he was running like chicken with-out support from the team. Your article is very useful.

  5. Brilliant and so true not only in Thailand but most of the openings I have done until now (28)
    I just could not stop laughing now – but its so painful when you are actually working with these mistakes and are determine to achieve a great opening.

    Well said, thank you

  6. Excellent, very enjoyable to read. None of these are a surprise, same things happen the world over..

  7. Hi,
    These mistakes are not only rampant in the hospitality industry, but are prevelent almost in all, though, the hues might be a bit different, but after working in hspitality, hotel Consulting, IT/ Software devlopment, Recruitment company and various other areas, these are a common mistakes we all seem to make!
    Thanks for bringing out this idea in to crystel clear words!
    Great thoughts

  8. Very interesting to read your 10 mistakes.

    As a supplier of Uniforms in the Hospitality Industry I like to add one other very big mistake which I see so often.

    Since 1981 I am a Uniform Supplier in Europe and since January 2009 in the UAE.
    It’s a fact that the attention for Uniforms often comes up ‘at the last Minute’ while the Uniforms are the finishing touch of a Hotel.

    The purchaser of Uniforms, most of the time, do not have any knowledge regarding Uniforms. Because of that reason they make many mistakes by making the wrong choices regarding the Supplier, the Designs, the fit, colours and quality.

    I wished that the purchaser of Uniforms will take Uniforms more serious in the future.
    I would advice:

    Give the Supplier more time, so start developing your Uniforms in time and you will save a lot of money and……… stress during opening of your Hotel.

  9. Dear Barbara
    Fully agree with you, its not only the timing for uniforms, but also the design. Here in Asia most of the uniforms are designed and when the design is approved, the senior management and owners often approve the looks of the deigns without involving employees.
    The result is often that employees end up with uncomfortable and unpractical uniforms. Some designs look good on tall and slim people, but not all of the hotel employees are tall and slim etc.

  10. I especially agree with Nos 8 and 9. A lot of people seem to underestimate the impact of good design in certain areas of a building. If the employees are comfortable and the spaces are planned out also with them in mind, they’ll work more efficiently, be happier at work and in turn make the clients happier. Not to mention, the building will also be maintained better too. I’ve seen so many buildings where access to building systems is very difficult and sometimes even dangerous too. You can bet that the worker that has to go there will not take his/her time to do a good job but get it done and live as soon as possible.

  11. Having done one of my pre openings in a recession year, one mistake that I would bear in mind would be to recruite less manning to open the property and then build up the numbers to approved levels once business ramps up….

  12. Good article. While with Starwood and Holiday Inn I saw some of these mistakes made with new hotels. While Klaus says it in so many word simply put when you open a new hotel all of the good employees in the area already have jobs. You either deal with a B or even a C player or you have to convenience the A player to leave a situation they are comfortable and familiar with to come into an uncertain situation. Which usually requires more money, which is often a good investment.

  13. Brillaint compilation of some of the most repeated mistakes. And I agree that lots more can be added to it and one would be that the operational people are rarely if never at all consulted when planning the hotel and this results in strange things that would eventually effetc employee performance and then of course the customer suffers.
    One hotel I was with had laundry chutes that did not land inside the laundry but somewhere else and someone had to make that trip to collect the laundry and take it to the laundry!!

  14. I did a pre-opeing a year ago and at least we faced 6 of the mistakes mentioned…
    it’s so true and so common not only in Thailand

  15. Really a good topic 100% in line with reality.

    Well Well I just open an hotel in east Africa, the Sunday, meanwhile we were opening on Monday, I did not have the kitchen equipment!!!! Lucky us the first guests, around 180, arrived at 1.00 pm what leave us all morning to get ready!!!. I always stay optimistic.
    Let see if the next opening will stay in line with all this common mistake without mentioned everything that is forgotten in my case they just forget about bar furniture, lobby bar, Only two fridges of 400 liters for a capacity of 400 guests!!!!

    An other one a 2100 rooms resorts, when I asked where are the house keeping stores in the building, the answer was that the architect never thought about it same mini bar store no one in all resort…. Uniform ordered by the owner wife only small size imaging the situation.

    Only one point i am not agree with all i did read in this wonderful topic. For me, It will never change human do not learn so easily from there mistake.

  16. True for all mistakes! I own a hotel and act as a general manager because of my parents. Ok I graduated from a famous university but with no experience, I can’t drive the business at all. It’s so hard to be a professional owner although I know some basic things about a good hotel management. I can say for my case, it’s hard to explain what is the result of letting untrained employees work in the hotel. It was a big mistake when I had no any good plan before the opening.

  17. Very informative ! Common mistakes when people don’t plan. Checklist is needed for any hotel opening!

  18. There are many opportunities out there today for new hotels to be more efficient and run more cost-effective operations on a daily basis.

    1. Marketing- They can use popular social media channels and PR to connect with their audience

    2. Operations- They can use a property management software system to coordinate staff members, scheduling, bookings, and more. Our system uses cloud technology so it’s scalable.

    3. Offer something unique- You should always offer some sort of amenity or attraction that interests your customer base and encourages them to refer your hotel to others that follow.

    4. Set up relationships with local businesses who may be attracting tourists or walk-in traffic that can be directed over to your hotel.

    -Hotelogix

  19. I am planning, conceptualising and setting up a resort and I had found quite a few of the mistakes being committed at the planning stage before my taking over the project. Also it is not easy convincing a promoter to plan staff areas as they cannot visualise the requirement and they feel it is an unnecessary cost.
    One requires to handle some promoters with kid gloves especially when it comes to family being involved.
    One has to make them understand the pitfalls and the professionalism required for handling a resort.

    1. We know…. this person and some others sometimes take articles from other people BLOG and post them as their own…. what a shame and very unprofessional to do this without giving credit

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