What happened to hospitality?
Another trend over the past couple of decades has been to look at your staff as a tool, like your stove or your coolers. We have taught managers to be disconnected from the employees, to not get to close because it "causes issues". As a result, we have employees that feel their leaders don't care, that they are not valued, that if they left tomorrow for 25 cents an hour more no one would miss them. I had a great General Manager at a resort property I worked at years ago. The entire staff would walk across hot coals for him without question. How did he do this? Very simple, he took the time to talk to the staff. When he would walk the property he knew everyone's name. He would ask them how their vacation was, how their family was doing, engage them in personal conversation. The staff truly felt that he cared for them as individuals and not just for the work they performed. He was never unprofessional, and would always hold people accountable for bad choices when needed, however this was made easier because he had earned their trust and respect.
How do you grow your top line revenue to cover the increased expenses in today's environment? Focus on your staff first. Take care of them and they will take care of your guests. Happy guests return more often and refer other guests. Focus on quality of product. Cheapest isn't always best, especially in the hospitality world. Guests are willing to pay for a quality product and a quality experience, however they do not want to pay for low quality product provided by staff that is disengaged and looking for a better opportunity. It's hard to be successful in hospitality in today's world. Small mistakes can cost you tremendously. Pay attention to costs, but spend at least 2/3 of your time on growing top line revenue.
I'm my humble opinion; much of the hospitality industry has lost the path to creating great guest experiences and sustainable growth and profits. It seems like over the past couple of decades, and especially since COVID, the focus has been almost exclusively on operating short staffed and trying to cut expenses to be profitable. Paying attention to expenses is critical; however there are even more important parts that frequently get forgotten about. Growing revenue, building brand loyalty and building a stable, high performance team. You can cut expenses all you want, but if the top line revenue isn't there to start with you will still not be profitable. Will your business benefit best if you cut 2% more from your expenses that are likely already very thin, or by adding 5% more to your top line revenue?
In the past couple of years, we have seen huge increases in turnover. As the price of labor has gone up with inflation, most business have tried to reduce the number of employees to compensate and asked those left to do even more. This creates a high stress environment which people seek to leave. What is the cost of turnover? Gallup says one half to as much as two times their annual salary. You have recruiting costs, onboarding costs, training costs, lost productivity (it takes a while for a new employee to match the productivity of a seasoned employee), customer service and errors, lost engagement and moral, lost product knowledge, etc... Being slow to react to the labor market and adjusting wages can actually cost you much more in lost productivity and turnover costs in the end. The most frequent answer I have gotten in interviews for the past two years when I ask someone why they are looking for a new position is that they are tired of working shorthanded all the time. As a business owner or manager you are no doubt asking how you possible can afford to pay more and still be profitable. This is where the focus on top line revenue comes in.
Another trend over the past couple of decades has been to look at your staff as a tool, like your stove or your coolers. We have taught managers to be disconnected from the employees, to not get to close because it "causes issues". As a result, we have employees that feel their leaders don't care, that they are not valued, that if they left tomorrow for 25 cents an hour more no one would miss them. I had a great General Manager at a resort property I worked at years ago. The entire staff would walk across hot coals for him without question. How did he do this? Very simple, he took the time to talk to the staff. When he would walk the property he knew everyone's name. He would ask them how their vacation was, how their family was doing, engage them in personal conversation. The staff truly felt that he cared for them as individuals and not just for the work they performed. He was never unprofessional, and would always hold people accountable for bad choices when needed, however this was made easier because he had earned their trust and respect.
How do you grow your top line revenue to cover the increased expenses in today's environment? Focus on your staff first. Take care of them and they will take care of your guests. Happy guests return more often and refer other guests. Focus on quality of product. Cheapest isn't always best, especially in the hospitality world. Guests are willing to pay for a quality product and a quality experience, however they do not want to pay for low quality product provided by staff that is disengaged and looking for a better opportunity. It's hard to be successful in hospitality in today's world. Small mistakes can cost you tremendously. Pay attention to costs, but spend at least 2/3 of your time on growing top line revenue.
Carl DittmaierDirector of Food and Beverage
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