What exactly is a boutique hotel?

In today’s hotel market one may well ask what exactly is a Boutique Hotel? It seems the word BOUTIQUE has been misused and marketed irresponsibly by many hotel owners and operators worldwide. Nowadays you see the word associated with 2-star Days Inn styled rooms at so-called ‘eco’ resorts where the only eco aspect to their operation is a few plastic bins for so-called separate waste disposal in the guest rooms. Both the word ‘eco’ and ’boutique’ are clearly overused and in most cases not at all relevant to the property marketing itself as being so.

So for ” boutique” some education for those in need of it.

A Boutique Hotel needs to reflect the following. Small, fashionable and independent; when lacking innovative design and stylish high quality personal operations and impeccable amenities, these small hotels are in violation of the fundamental boutique motif and are merely small. Add to what boutique should reflect in a hotel, innovative design, distinctive, individuality, flair, original, and creativity, and you can see how this word has been turned into more than rather a vague term confusing the market, and undermining those that actually achieve it.

Cool, or hip or historic, themed, marketed for business or leisure and more often than not both, the meaning is now an extension of the original boutique hotel urban properties where the key descriptive components were fashion, elegance, glamor and style. Nowadays the word transcends these earlier definitions and crosses many hotel classifications, from small to not so mall, luxury to affordable, urban to resort, chic and cool to traditional. Boutique Hotels have many sub segments.

Ignoring the attempts by chains to be boutique-ish, the W brand for example, and the Malmaison Group in the UK, boutique hotels independence has enabled owners and operators to keep at arm’s length corporate standards of the chains that more often than not hinder the creative ideas of those employees on site in supplying distinguished and personalized hospitality services to the travelers they know.  In boutique hotel operations it is much more than employees knowing each guest’s name, which in some of the so-called larger boutique hotels is an impossibility anyway.

It is in my mind more a return to traditional hotel keeping, knowing your guests and fully understanding their requirements as individual travelers and then actually delivering that service in an exceptional manner, all within an environment that has innovative design, distinctive characteristics, where individuality and flair shine through, and the whole experience to the traveler is original and creative.

Some development priorities summed up:

  • An at home feel in both size, elegance and throughout it is of a different perspective.
  • Inviting, at peace with itself, snug, social.
  • Top of the line, select and personalized. Personalized means sincere and warm.
  • Home made, hand-made, not the standard factory produced stuff. This goes not just for the set up and fit out, add to that food, beverages, paper, amenities.
  • Hello to the designer! Square foot by square foot thought through!
  • Concepts that are of quality, from design to delivery.
  • Amenities unseen near you, out of the box, from soaps, to personalized jams, cookie wraps, cocktails on arrival, smart phone, limos to the office, and the house essence.
  • And time and time, time to create, time to prepare to deliver!

For boutique hotel development planning and management that deliver on the true concept of the word, contact mark@turnerlodgingco.com.

Hotel business plans: does your asset manager participate?

In the world of international hotel management business plans are for all purposes, most sit on shelves gathering dust as soon as they are completed, some approved by the board then handed to the banks, perhaps incorrectly compiled solely by the financial department.

In the hospitality world of hotel brand management most form an annual ritual of head office wishing to find out what their management fees will be under pressure from the CEO who is hell bent on growth, while the GM and the team put a proposal that is rather conservative knowing that some so called expert higher up will boost it up killing off any incentive to achieve it.

Some are for owners who do need the truth, some are for owners that do not need the truth, for what ever reason and they are numerous.

Some are to back up the feasibility study to obtain financing for a new project.

Some are the feasibility study (we are building it so you better tell me how much profit we will make 1st year!).

Some don’t gather dust, those created by smart business operators and owners.Some are for real.

Real ones are living documents, put together by all members of the team, from the bottom up, line item by line item for each cost center and for each market segment being part of the revenue generation plan. Everyone is in sales so everyone is involved. Everyone you ask, yes, even the pot washer.

The result is a plan that with some prodding skywards from those above is an achievable and motivational tool that the owners and operators can feel proud in achieving.

Yet how many actually make sense, and that are worked on monthly by hotel owners and management as a team, with an asset manager who has the skills to see things from a different angle to that of the management company and who is probing for opportunities to unlock value during the annual business cycle. Not all that’s for sure.

For resort management or hotel asset management that really makes a positive difference, email mark@turnerlodgingco.com.

Condominium hotels and resorts, advice for investors (Part 2)

Upon arrival the front desk agent greets you in the same friendly manner as they would greet a normal guest, and a key is handed over and you make your way up to your unit.

As you enter you are immediately taken to the dark marks along the wall near the entry  door, luggage marks you guess, the dining table has large scrape marks and one leg is partially broken, there are  glasses and plates missing from the stock you originally purchased, the towels look faded and worn, the carpet hasn’t been vacuumed well, the drapes are not fitted correctly with broken attachments at the top and the bed sheets have hairs on them.

You reflect back to your last monthly statement, which details costs of 50% of revenue to the rental manager, $275 in maintenance and repair costs, the electricity and water bill, your portion of travel agents commission costs and credit card commissions, and the hotel marketing franchise fee, and then you try to figure out how much if any will be left over to pay the mortgage and property taxes. You also note last month was the high season and you couldn’t even stay in your unit so you expected your bottom line income to be one of the best months of the year.

You ask to speak with maintenance about the work not completed in your unit, and get transferred to the rental management company’s in-house maintenance department. A voice mail kindly responds with a message request, which you leave, which is not replied to.

On return from a day enjoying the sights, you decide to speak to the rental management company to complain, firstly about all the revenues which are below expectations, and then all of the repairs and maintenance issues you feel are costs that should be borne by the rental management company as the damage you have seen in the unit has to be renter and guest related and not owner related.

A conversation then occurs that focuses on the definition of what normal wear and tear is, and the owner’s responsibility in covering normal wear and tear costs, but the broken table leg is agreed to be fixed by the management company at their costs. That makes you feel good, until you remember the rental income issue was never discussed. You then make a call to someone else and are reminded that there is a lot of competition and the rental market is not growing as was originally thought, but “we are out performing the competition,” what ever that means. You decide it’s time for a night out to relax and take a meal in the hotel’s restaurant thinking any profit will be reflected in your next monthly statement until you realize on return to your unit that the hotel management company does not share any profit in other areas of the hotel other than income generated through the rental of the units.

Boy, this is getting messy you think, and off back down to the bar for a night cap! (Continued in Part 3!)

 

Condominium hotels and resorts advice for investors (Part 3)

Have you read Part 1 and 2 regarding condominium hotels and resorts?

Following on in this true saga, the next morning on awakening you feel water on the bathroom floor and look up to see on the bathroom ceiling a water stain and dripping water. A quick call to the front office agent and you get passed onto the rental maintenance department. However you are then  passed onto the common area building maintenance department, (the strata property management company as your building has both a rental and a strata property management company and is not managed by one operating entity)!

You are becoming confused…

The strata property manager then makes it clear this is a strata issue and that the owners of the unit above will be contacted and this issue will be fixed by the strata property management company.

The strata property manager now has to ascertain the reason for this leak, and after some time and cost to the owner above concludes it was from a leaking water pipe connection to the dishwasher in the kitchen above, which backs onto their bathroom.

So you pass that information off thinking that the owner above wasn’t in the unit at the time  and why didn’t the rental management company take action on this to stop it, as they rented the unit out. Or shouldn’t they have charged the renter you think, but on asking the strata manager for an explanation so you can better understand how the system works get told that the rental management company didn’t report the issue, as they should have done, and the guests were not charged for any damage. On asking the rental management company why this happened you are told that the guest checked out before they noticed anything wrong as it was a hidden pipe problem, so they could not consider charging the renters, and anyway this was a wear and tear issue and not related to any actual direct action which could be defined as abusive by the renters, so no action would have been taken to charge the renters anyway.

You are perplexed and further confused.

Why was the leak not reported to the strata manager earlier, why did housekeeping not report the damaged ceiling in the suite below?

All this leaves you wondering why you did not have this kind of discussion with the strata property manager and the rental manager prior to purchasing the unit. You reflect that the only information you were supplied was some beautiful artistic renderings and some income projections. You leave more troubled than you were when you arrived, blaming yourself for not doing adequate due diligence on buying a second home.

Now add-on to this, how about this model being further complicated by a developer promoting it as a fractional development with 3-month segments with 4 possible owners,  and a flexible rental pool option? One owner can rent if they wish, the others may not if they do not wish to.  Yes, it happens! Anything to sell something!!

Work that one out!!

Who pays for what, is the first question one needs to ask as a buyer, then do your sums and work out the bottom line and ask yourself ‘will this be a good financial deal for me?’ It is a financial investment transaction, you are not buying into a second home, you are buying into an investment where the users of the unit will not be as caring as you, with an investment model which over the years has proven to be a risky one.

Lesson:  Owners and buyers, beware of the so-called ‘income projections’ presented by the developers and uneducated real estate agents that are totally unrealistic and that bear little or no resemblance on what the net income could possibly be. Get independent advice before buying into a condo hotel.

Lesson: Developers partner with hospitality management that knows how to get results!

Developers who want a partner to make a long term success of a project please contact Mark, and for owners, please do the due diligence!

Restaurant development and operations

So you want to develop and operate a restaurant. In a hotel, in a resort, a stand alone, where ever. Consider the following, and these are just the basics!

The restaurant business concept stage

  • Do you have a restaurant development check list?
  • What is your development cost estimate and timeline?
  • Do you know how to get your team together and who should be in it?
  • What will be your concept and unique positioning and branding and how are you to develop name awareness?
  • What kind of analysis of the competition will you focus on?
  • What future expansion is envisaged and how will you expand your brand awareness?
  • What suppliers are available with what product?
  • What menu will suit?
  • Do the initial figures work?

Business planning and operations

  • What legal structure suits you?
  • How deep will your market analysis be so you can ascertain the needs taking into account competitive offerings and pricing?
  • What will your management and support organization be? Do you know how to create your management structure and organization, skilled in operating one?
  • Have you done a feasibility study and are you capable of creating your detailed operational business plan?
  • Building, leasing, joint ownership, what is your development plan?
  • What professional and advisory support will be needed? Need expert advice with startup expenses and capitalization, and other startup costs and your financial plan?
  • How will you fund this? How will you fund growth?
  • How do you implement administrative and financial reporting that makes sense?

Issues to consider with the restaurant location and its actual site

  • Do you know why the real estate aspect matters?
  • Will you lease?
  • Are you knowledgeable enough to negotiate a lease with a fair rent?
  • Do you know all the design and architectural issues needed to be addressed and managed?
  • Are you skilled in compiling technical  agreements with service providers? What professional assistance is needed?
  • Are you skilled in restaurant space planning, kitchen area and adjustable space planning, or will you leave all of that to others?
  • Have you considered design aspects including the consistency of appearance, color, curb appeal, furniture, fixtures & equipment, intimacy, lighting, music, signage? What about parking, insurance, permit needs?

Menu and beverage considerations

  • What strategies are you implementing with your menu and its menu design?
  • Know what menu engineering means going into operations?
  • Who are your vendors and why, why will you purchase from whom?
  • What hygiene and food storage  standards will be implemented?
  • Can you cost out a menu, control inventories, understand what a preparation list is, calculate the cost of goods sold, and have the skills set to lead the team and your chef?
  • Do you understand the responsibilities of owning a liquor license, other liquor license considerations, knowledgeable on wines, and all other beverages?

Marketing your restaurant operation

Do you know how to create and utilize a website, direct mail and data management? Compile monthly email newsletters, identify best advertising options, make use of special events, use media releases to best advantage, write articles, make best use of the local business network, put local networking functions together, create culinary events?

Human resources

How skilled are you in the hiring process, pre-employment screenings, compilation of  the employee manual, training manual, creating the job specification and job description for each position, your service and kitchen training and development plan,  defining your service standards, initiation of incentives, payroll control, labor and employment contacts, best practice and work scheduling?

Then you have to run it, and grow it.

Where do you begin? Restaurant development and operations are complicated, need advice? For advice that works to save you from going broke, contact Mark, at least for a chat!!

Questions to ask your resort hotel management company

One of the most important questions an owner should ask his resort hotel management company is how does the food and beverage department perform compared to the competitive set; not that well most likely.

Are you a frustrated resort hotel owner, not sure which way to turn? Then rejoice, help is at hand!

Fenced in by bland corporate food and beverage management teams, branded or chained, who can not think out side of the box?! Tied into a corporate management culture of so-called “service delivery excellence” and those “ brand standard manuals” of meaningless trivia created by creative dead souls who haven’t lived out of the corporate environment  franchise belt?!

Does your 3% and 6% management company ( only 6% you may say) think that ensuring your 29% budget food costs are in line is more important a measure of management performance than ensuring the food offering is what the customer want at a competitive price to what your clients can get up the road? Measuring as a priority $ banked, not % margins?!!

Do you pay fees over a hundred thousand to stifle individuality, having to accept food and beverage concepts driven by the need to meet group franchise standards?

Attend that quarterly owner’s and management business review meeting to hear the  same old story. Cash flow not met, REVPAR below competitive set, food and beverage staff costs over 40% due to poor product demand?

Historically, hotel restaurants have fallen short of quality, creativity, service experience, they still do in general although major efforts have been made to improve this in top line brands and chains.

Fear not though, help is at hand!!

As a hotel business adviser we are not tied in to day-to-day operations, are more qualified and specialist than General Manager’s and most corporate reports, can stand apart from brand standard operators and the corporate protocol. We have a unique stand alone advantageous position in which to see opportunities to unlock value and introduce change, positive creative change, as the third-party support for hotel owner’s.

Sample questions to ask.

Operationally, do the outlets really work? 100%? Or is your hotel restaurant dead and antiquated in product offering, value, quality, ambiance, or all four?

Do the management know the competitive offerings and associated quality and pricing? When was the last competitive market review done?

Does your compete with the high street, those near by, or try to follow it? Market leader or  follower?

What’s more important, department profit or cost margins?

Menu with too many choices, not one thing or the other, trying to be all things to everyone and not something to someone? Tasty fresh food, value pricing, reflects your location?

12 month food and beverage marketing program, leveraged, in sales efforts, daily?

What’s redundant in the market, what’s offered in the extreme in the local market? Where does your fit?

Guest feedback on hand, lease opportunities defined, guest delivery issues sorted?

Capital plan with ROI in place for future use of available capital?

Hotel management stuck in a rut?

Plus “more and more”

For answers to these, the “more and more”, and assistance in unlocking value to your food and beverage operations, be it within boutique resorts or whatever, and for creative cost-effective solutions that question the status-quo of your resort hotel management company, contact mark@turnerlodgingco.com.

Hotel sales program strategies

The quickest way to have occupancy and net profit improve dramatically within a short period of time is by the General Manager getting as involved as they should be in the hotel sales program and general team efforts.

Traveling around and talking to some hotel owners recently some very basic advice seems to be appropriate. This relates to GM’s just not doing their jobs frankly.

Resorts and those properties in the city are somewhat different but in the comments below you can get the gist of  what should be happening.

  • Given your General Manager is the CEO of your hotel every local organization from the chamber of commerce, to the board of each important local community organization, every single tourism authority, and the Tourism Minister should be well acquainted with the GM. Involvement and relationship building needs to be ongoing. Is there a plan in place for this relationship building?
  • A General Manager who is effective in Sales (lets just ignore the operational aspects) will take advantage of the daily peak operating periods to pour some coffee at the breakfast table and pour water at the luncheon table and yes, shake hands. How often do you see that?
  • The GM should meet and greet on arrival all the top 10 key accounts and either follow-up with a call during their stay or speak with them on check out, while ensuring you have great business relationships with the person who actually makes the bookings at these top accounts (the secretary to the CEO?) Who could be better candidates, at no cost, for repeat business or positive word of mouth.
  • He/she should have two on site business lunches per week at a minimum. Look after your key accounts. Look after your high spending resort guests.
  • Your General Manager should be making a minimum of 15 calls a week to new and potential account leads in support of the sales team, who should be met during the daily sales briefing after 5pm to give encouragement and support.
  • Does the GM meet or call each guest who informs the management that something went wrong? These most valued guests, who have taken the time to comment are too often looked upon as someone to avoid. You not only have an opportunity to win them over and ensure whatever went wrong does not happen in the future, but these guests will more likely recommend you to others if you appease them.
  • And most importantly the General Manager needs to instill a sales focused attitude in their team. This can be developed in many ways, but at least get the message across that a smile and acknowledgement from everyone  to all guests  at all times is a must in the hospitality industry.

Trouble is this basic level of management is just not happening sufficiently in real life.

Costly sales programs do not come before the basics, for advice on winning business plans that get all the basics in place before $ is spent, contact Mark, someone who has actually been the GM/Director of sales for a resort and put one on the world map.