Revealing the secrets to profitability in this new economy
Unfortunately, as the hospitality industry attempts to recover from a tumultuous few years, there still are challenges ahead. Fortunately, summer 2022 brought a much-needed revitalization to all-things hospitality, but with the looming possibility of a global recession, it’s unclear what the future holds. Even though a survey conducted by Destination Analysts shows that 74.8% of Americans would still prioritize travel spending in the midst of a recession, it’s difficult to truly predict how travel will play out in reality since it’s unclear just how bad things could get.
Despite these challenges, hospitality leaders must prioritize profits to weather the uncertainties ahead. Restaurants, hotels, tour companies, convention operators, and more could face economic hardships that are more intense than ever before. In the wake of these challenges, here are five ways leaders can overcome the emerging hurdles to deliver quality results to their investors.
1. PROACTIVE SALES EFFORTS
Unfortunately, when a recession appears, many managers instinctively look to cut the sales efforts as they think it’s a lost cause. However, ensuring your team has the right sales training and understanding of market dynamics will go a long way in boosting profits. You need to have the right number of sellers in the right positions to keep up with the competition in your area, and also equip them with the skills to identify new, high-value customers while still prioritizing existing customers.
Your sales team is the first to provide service to customers, so it’s critical they’re highly skilled and committed to quality. Sales professionals also must stay closely connected with your operations team to ensure that the quality of services and promises made are kept throughout the duration of the visitor’s experience.
2. SERVANT LEADERSHIP POLICIES
During the next few years, hospitality professionals will be in the trenches, and they need their leaders in the trenches as well. Work alongside your associates to showcase solidarity, keep a pulse on how they are doing and feeling, and provide assistance when needed. When it comes time to promote, reward the diligent workers that are already within your organization instead of pulling a new hire from outside whenever possible.
Pay your teams well and keep benefits competitive in your industry. Work with HR to provide clear and regular feedback to your associates, and use a number of mediums like meetings, newsletters, memos, chat boards, and leadership Q&As to keep everyone informed on what’s happening in your organization at all levels.
3. STRONG CUSTOMER AND STAKEHOLDER RELATIONSHIP MANAGEMENT
Get feedback from your customers and take action on that feedback. Making customers feel seen, heard, and valued will go a long way in convincing them to come back or recommend your services to others. Go the extra mile to highlight the value of your customers by sending thank-you letters and keep them updated with newsletters or quarterly blogs. Returning customers are incredibly valuable, so don’t make the mistake of focusing only on new customers. You can even host customer-appreciation events to offer a feeling of exclusivity and make them feel appreciated.
4. CONTINUOUS IMPROVEMENT METHODOLOGIES
Once you have established your key metrics, it’s imperative that you measure them and track any changes. Key performance indicators (KPIs) are a data-based way to know what is and isn’t working. Use them to identify waste or redundancies that can be removed throughout your entire organization. When you get customer/associate feedback, act on it – the voice of the customer and the associate is a critical function of any business. Lastly, in everything your organization does, you should be finding the most efficient way to complete tasks and propel business.
“Time and time again, hospitality proves its ability to weather the storm. Whether it’s working through natural disasters, economic downturns, or a global pandemic, those in hospitality continue to come back with resilience.”
5. MANAGE SPENDING AND LABOR COSTS
The time of your team is one of the most valuable resources you have, so use it well. With a continuous improvement mindset, you can invest in tools and technologies to get the job done right. When you develop the most efficient ways to complete tasks, be sure to train your employees so there’s a uniform approach to everything. This approach will streamline processes and cut labor costs by saving time. Time and time again, hospitality proves its ability to weather the storm. Whether it’s working through natural disasters, economic downturns, or a global pandemic, those in hospitality continue to come back with resilience. This time will be no different.
is the owner and CEO of A&R Group. After immigrating to the U.S. in 1996, he began his career in the hospitality industry by managing a family-owned hotel. In the years since, Patel has accumulated a portfolio of globally recognized brands such as Hilton, Intercontinental Hotel Group, and Wyndham.