It’s a fact that we are living in what I call the ‘Age of Consolidation’, the ‘sharing economy’ as it’s coined by others. And the tourism industry is not immune. The airline, car rental, travel services and hospitality industries have undergone massive consolidation over the last few years. The Marriott acquisition of Starwood (at a fine $12 billion), car rental companies being swallowed up, airlines being bought up one after another and online travel portals joining forces. Mergers and acquisitions aplenty. The obvious reasoning: companies must show growth.
I remember the days when we hoteliers had the luxury of daydreaming of ways to delight our guests, conjuring up new ideas, even improving things that seemed to be working. Worrying about spoiling, delighting and pampering our guests was the central concern of every decision we made. Ahhh, the luxury....
Nowadays it seems that our general managers and management teams are spending their hotel management moments worrying about cash flow, stressing over budgets, agonizing over revenue: in short, money.
A successful hotelier is frequently asked the question, “What makes a hotel good?” The answers are endless, but there is one ingredient that will make or break a property. You can have the best operational management in place and the greatest, most forward-thinking systems and procedures in the mix, but if your general manager is weak, you are setting yourself up for failure.
We have recently had a few distressed hotels approach us, looking for a magic wand to sort out their hotel management problems. At face value or within a day or two it is very easy to pick up why so many hotels fall into difficulty. What we most often come across is an inexperienced hotel owner who is of the opinion that managing and owning a hotel is much like any other business.
The South African business sector, Cape Town in particular, has a short memory with regard to the oversupply of hotels and/or accommodation in our prime CBD locations – cast your mind back to over a year ago when we were not nearly so upbeat and most hoteliers were concerned about low occupancy rates.