Mike Leven is one of the hotel guys that you stop and listen to regardless of the situation. The insights the 40-year-plus hotel industry veteran offers are worth their weight in gold. If only some of the financial gurus that have assumed leadership roles in the hotel industry would take a course in Leven 101.
Currently the president and COO for Las Vegas Sands, Leven stopped by the Vantage Hospitality conference in Vegas on Wednesday to share some thoughts with the 700 or so attendees. By doing so, it’s clear that while Leven currently is spending his time focusing on the hotel industry as a necessary byproduct to the gaming industry, he remains as passionate as ever about hotels and what they should stand for.
His focus on Wednesday was about the relationship that franchisors and licensors must have with their customers—not the guests that populate the hotels, but the hotel owners that provide steady revenue for the franchising/licensing company.
|Leven stopped by the Vantage Hospitality conference in Vegas on Wednesday to share some thoughts with the 700 or so attendees.
He said the No. 1 rule that franchisors/licensors must follow—and that it doesn’t happen often these days—is to have open communication with their customers. That means admitting mistakes when needed.
“The customer may not always be right, but the customer is always the customer,” he said. “That’s a very important differentiation.”
Leven started in the industry more than 40 years ago as a VP of sales for Dunfey Hotels, a New England-based company that had about a dozen hotels. He said that in the early days of hotel franchising there was no mechanism in place to facilitate communication between the corporate office and property owners. So as he shaped his career with Americana Hotels, Days Inn, Holiday Bann (Bass Hotels) and US Franchise Systems, he kept in mind the basic tenet that communication is of the utmost importance.
Leven said that as he took jobs along the way, he almost always had to battle one common theme when he joined a new company.
“The worst thing you can say to Mike Leven is, ‘That’s the way we do it here,’” he said. “That says, ‘We’re not willing to change or not do anything or be different.’”
He said he often had to remind leaders at companies he started working for that the hotel guest wasn’t their customer. Instead, the guest was the customer of the franchisee/licensee, and that franchisee/licensee was in turn the customer of the corporate office.
“What I learned at Holiday Inn was people forgot who was giving them the check,” he said.
Leven touched on many points during his 50 minutes in the spotlight on Wednesday, including:
- Everyone must expect cycles in the hotel industry, and it’s important for franchisors to remember what got them to the top—especially when things get tough. “You can’t avoid those cycles,” he said. “As a franchisor or licensor you should be in a position to help, not to hurt.”
- “There’s one good thing about being a CEO, besides the check. If you want to make the decision you can make it. Whether you are right or wrong, the buck stops there.”
- Las Vegas is looked upon by a lot of people as being different than the rest of the markets in the U.S. There’s a significant supply condition, airlines are leaving the market and 55 percent of the city’s business is generated by drive-to traffic. “Recovery here means room rate recovery, it doesn’t mean volume recovery,” he said.
- “Revenue management systems are killing the rate structure of the industry,” he said. Leven said that until somebody wakes up and says don’t follow the airline industry by selling for the highest price possible during good times and the lowest price possible during bad times, the hotel industry is destined for a complicated future. He said that relying on technology and mathematical equations to set rates rather than factoring in customers’ needs and trends is a bad course for rate management to take.
- He said he expects the hotel segments with lower average daily rates to rebound faster than upper segments because it is psychologically easier for consumers to digest a $5 increase in rooms rates than it is for them to digest a $50 increase in room rates
- Leven compared the rise of the online travel agents to the rise of wholesalers in the resort industry 40 years ago. “This is a very, very difficult situation for the industry, it’s particularly difficult for us here in Vegas,” he said. “We are beginning to get in control of the prices a little more. … The OTAs are going to be with us for awhile, particularly in the bad time the industry is in.” He suggested that hoteliers get as much variance as possible in a contract with an OTA to make it easier to adapt as cycles come and go.
The thing about Leven is that he is so easy to listen to. His experience, humility, obvious understanding of fairness and willingness to speak frankly make him one of those must-see speakers in our industry.