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The Lobby a social network from HotelNewsNow.com
Monday, 10 January 2011

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Poor property-level decisions have larger effects
Posted by Jason Q. Freed at 12:00 AM

Depending on what your career is, your personal life and work life may or may not cross paths. Working in the hotel industry, it’s inevitable that ours do. We own, operate, market, sell, research, teach about and write about hotels from 9-5 Monday through Friday; then we stay in them when we travel or take vacation from the office. Our friends and family don’t have to work in our industry to know a little about it.

The mashing of personal and professional lives sparked some interesting conversation about hotels around my kitchen table. An outsider’s perspective on how certain tasks are performed at the property level can really make us think about how actions truly affect the guest. Recently, my wife had an interesting experience with a hotel in Atlanta that really made me think about the effects of a negative experience—a lesson we could all learn from.

My wife works for a global company that meets regionally for conferences every so often. Recently, her company was planning a three-day conference in Atlanta in which about 150 employees from around the world would be present. They found adequate meeting space at a downtown hotel and signed a contract for the meeting about six months in advance.

We all know conference planning isn’t easy; leading up to the conference, measurements of the rooms were taken and plans were made for visual aids and presentations, a photographer was obtained, plane tickets and rooms were booked, and things began shipping in preparation of the event.

Then, about two weeks before the meeting, the hotel canceled, offering no explanation or reason. The would-be guests were forced to scramble and make last-minute arrangements at a nearby hotel, altering a slew of plans.

On first glance, although an incident like this may not sit well with the guests who had to alter their plans, the hotel’s actions could be justified. Most likely, the hotel had negotiated to host the original meeting during a low-demand period and later secured a group with a higher revenue potential. Surely there was a cancellation policy in the contract for the hotel just as there was for the client.

But, as usual in an incident like this, there were deeper repercussions for the hotel. Moving forward, my wife’s company (which undoubtedly will be back to Atlanta in the future) has forbidden meetings at this hotel. Moreover, meeting planners have been instructed to bypass that brand—and parent franchisor—altogether, and executives have black-listed employees from staying at any hotels in the brand family for future business travel.

Maybe the reason for cancellation was justifiable. Maybe the revenue jump was too big to pass up. But there still is a lesson to be learned: Poor decisions made at your hotel not only affect your bottom line, they can have detrimental effects on guest loyalty and drive money right into your competitors’ pockets.



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2 Comments
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28 January 2011 at 11:59 AM Central Time
In response to: Poor property-level decisions have larger effects
Loudean commented:
It's not just measuring opportunity cost, it's using your common sense with a side of ethics. Managers drill in their staff that the guest is #1 and that the person you check in is paying your salary. What message does this send to people? It's ok to cancel a group in favor of someone that is going to pay more? We'll just tell that to the person that checks in with the employee rate we forgot to close out that we canceled your reservation because someone else was willing to pay a higher rate, right? I can safely say that I would consider other employment before working for that manager any longer if that is their attitude. People have to understand that short term affects have long term consequences: Positive or negative.

21 January 2011 at 12:17 PM Central Time
In response to: Poor property-level decisions have larger effects
Redha commented:
That's very interesting. How do we measure the opportunity cost of cancelling one group for another to our bottomline in the future ? I think when hotels are able to measure it they will make better decisions.



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