Throughout my program there will be 10 guest speakers. I will write a reflection, on each of the ten, so that others may share through my experience.

This is the First in the series

Reflective Paper # 1

Bill Lewis, General Manager

This guest speaker session shed light on the Victoria hotel industry from the eyes of a Royal Roads Graduate. It was a great experience to “pick the brain” of an experienced industry professional; to see the potential corporate movement experienced by a young business professional.  There are two areas which Mr. Lewis touched on, during his presentation, which intrigued me:

  1. Revenue Management/ over-supply in Victoria B.C.
  2. Customer Feedback/Complaint

Revenue Management

Revenue management is a crucial aspect of running any business; the bottom line must to be positive. B. Lewis stated, occupancy rates this summer are even with last summer however, revPAR has decreased 18% since summer 2008 (personal communication, October 28, 2009). This suggests that hoteliers have cut room rates to achieve occupancy but at the expense of efficient revenue generation. Reducing room rates restricts the hotels ability to generate maximum revenue over the long term. In fact this type of revenue management “most often results in slightly increased occupancy; only at lower rates and much lower profit” (The Marketing Coach, 2009). Using the information which Bill Lewis discussed, one begins to understand the trap, management fall into, to reduced room rates and increase occupancy. Reduction of room rates has the following negative effects on business profitability:

  • Decreased brand prestige
  • Reduced profitability with the intention to increase occupancy
  • Increased negative market awareness of the hotel’s decreasing ADR
  • Increased difficulty raising room rates once occupancy increases

B. Lewis discussed a far more profitable method of increasing occupancy; develop a creative rate forecasting analysis (personal communication, October 28, 2009). A general manager must seek creative methods of increasing occupancy and revenue without decreasing brand prestige of the hotel. This can be accomplished through the use of:

  • Reduce corporate rates (invisible to the public price points)
  • Increase the percentage of rooms sold to opaque travel websites (Hotwire, Expedia etc.)
  • Build hotel’s corporate image in the local community
  • Couple value added options to weekend packages. (eg. 20% off spa day)

These types of guest incentive programs all have the ability to increase the hotels revPAR without reducing the hotel’s prestige. These creative business practices are easy to overlook, but as obvious as these above methods are one can underestimate their impact on revenue management.

Customer Feedback/Complaint

It is exceedingly more important, due to the contribution of web 2.0 and social media, that managers of hotels properly handle customer issues. “99% of customers truly experience a misunderstanding or issue that they what resolved” (B. Lewis, personal communication, October 28, 2009). Customers are generally good hearted and want a good experience; 1% of guest, however, tend to make ridiculous claims about ridiculous issues. These customers will threaten to take their claim to a higher power, head office, or travel advisor, in order to push management to offer complementary service. It is important, to the employees who look to the General Manager for support, that the hotel manager seeks the truth and acts accordingly. If the customer is the 1% which cannot be satisfied, then the manager must stand firm on his decision to support his staff. “The best way a manager can resolve a complaint situation is to rely on his experience and gut instinct” (R. Wiggins, personal communication, May 26, 2009). In this order, the manager will usually decide on the correct course of action.  I, as a Floor Manager at Cactus Club Cafe, dealt with a customer complaint; the customer had wine spilt in her eye. I attended to her, gave here all aid and care I deemed reasonable. She seemed ok, and happy I cared and helped her relive the situation. When the cheque was presented; the family demanded their meal be complimentary. This is was one of those grey areas which Bill Lewis touched on when speaking about customer relationships; the party spend upward of $300.00. I had seen a couple of the party’s guest in my restaurant before, and therefore I made sure their dinner was taken care of. I saw this party as the type of customers our company would like back; in the long term their party would return and spend more than the tab I took care of. Interpersonal interaction is a very important aspect of a manager’s daily duties. Without social, interpersonal and critical thinking skills, a manager would find it impossible to elevate tense situations. A general manager looks after his customers vicariously through his staff; the employees must feel supported by their management. For this reason, a general manager must satisfy the concerns of both his guests and his employees. He must critically analyze each situation differently and use his experience to alleviate the situation presented.

References

The Marketing Coach. (2009). The Benefits of Revenue Management. Retrieved October 28, 2009, from http://www.hotelmarketingcoach.com/Revenue%20Management.htm

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