2010, The Year of the Recovery

Will the Hospitality Industry Be Ready?

The hospitality industry has been buffeted by the collateral damage of the economic crisis.  The fall in consumer confidence and plummeting business travel has resulted in record low hotel occupancy rates. 

Yet most hospitality industry experts are predicting trends to turn positive by mid-2010. The question for many properties and franchise managers is — are you ready for the coming recovery?  Being ready means the difference between success and failure—whether your market share increases or decreases, or whether you’ll realize stronger Revenue per Available Room (REVPAR).

With voluntary employee exits at an all-time low, you may have the right headcount, but how much of your employees’ spirit has left the building?  Making the most out of any recovery means every team member in your property or location has to be committed and focused on the guest. 

Sincere interest in the guest is what drives guest loyalty.  Unfortunately, many team members right now are frustrated with their brand, management company or ownership.  They feel overworked and underappreciated.  What will those team members  do when the economy gets better? 

Some workers will leave for another job.  Worse, other team members will stay and be disgruntled, which will only serve to hinder property performance.  For example, one customer had a bad experience with a travel company and he shared his complaint with over 10,000 people in a matter of three months.  Hospitality industry sources estimate that as a result of personal blogs and travel advice internet sites, one negative guest experience can reach as many as 30 million people within a matter of hours.  As a result, good staff morale is more pivotal than ever.  Your business depends on them providing the best service possible.

Is it possible to re-engage those employees that stay?  And how can your hiring practices be improved to select and quickly onboard motivated employees to replace those who have left? Proactive companies and property owners are addressing these issues now.   

Assess Systems is a consulting firm of organizational psychologists focused on talent selection and people development.  In the course of their extensive work in the hospitality industry, a number of their clients have reported efficiencies and guest score improvements since they implemented a pre-hire assessment that helps focus their hiring practices.  The assessments save time by clearly identifying candidates to avoid during the selection process.  In addition, follow-up studies prove that the test correctly identified those candidates who were star service providers and were rated higher in guest satisfaction surveys.  Using these types of assessments directly impacts turnover by predicting which workers are most qualified and suitable for the job.  Some customers estimate they’re saving, on average, $4,000-$5,000 per hire when they calculate retraining and other costs resulting when a bad hire is made. With a minor investment up front, an improved selection process can give you an edge over competing properties and place you ahead of the recovery curve. 

“Selecting the right talent for your individual business is the most important thing you can do.  There is nothing more important in our guest-focused industry,” said Randy Goldberg, Vice President of Recruiting for Hyatt Hotels and Resorts, North America Operations. 

This is apt advice for property owners or franchisees trying to recover from a recession, according to Sarah Glass, who works with Hyatt and Goldberg.  Glass is an I/O Psychology consultant and director at Assess Systems.

“We conducted several follow-up studies with some of our guest service employees that compared assessment results to performance data.  The assessment was right on target,” said Glass.  “If the assessment indicated avoiding a certain applicant, yet they were hired anyhow, their guest satisfaction and performance ratings never reached the higher levels achieved by those employees the assessment identified as better potential hires.  These are the results Hyatt was looking for when they selected us for this project.”

Joe Kaplan, managing director of Performancepoint, LLC, a management consulting firm focused on employee engagement practices and an Assess Systems partner, also sees the value of using assessments to improve hiring for his clients. 

“Having the right talent interact with your guests is critical in the hospitality industry. Without the right tools and methods to better understand who you are interviewing, all your hiring decisions are a virtual shot in the dark,” said Kaplan. “A number of our hospitality clients have seen the same type of results.  Most agree that past hiring and development practices were at best, guesses without the information and guidance provided by a professionally developed assessment and selection process targeted toward their industry.”

As important as hiring is the culture that exists at each property.  The tone set by a general manager and the rest of the management team is paramount.  Homewood Suites by Hilton spent a great deal of time promoting this idea, and developed the Service Suitcase with the assistance of Performancepoint.  This all-in-one program develops the management team of a property and promotes an engaged, service-minded culture with the associates at the property.  The best part about the training process is that it does not require trainers and is built into the normal day-to-day meeting structures that exist at all Homewood Suites properties. 

“The Service Suitcase has been an integral element in supporting our culture at all of our properties,” said Frank Saitta, Homewood Suite’s Senior Director, Brand Performance Support.  “Even more importantly, we have seen significant strides in service scores, occupancy and REVPAR when our hotels have applied the tools in the Service Suitcase.  One property saw a REVPAR increase of over $10.00 and a 77 percent increase in customer loyalty rankings within three months.”

With a recovery at the door, now is the time to invest.  Hotels that invest in events or one-shot promotions receive, at best, a short–term benefit. However, when a hotel chooses to invest in their workforce, the impact is much more long-lasting.  Now is the time to re-engage the passion at your property using focused development and selection tools.

Brad Federman is the president of Performancepoint, LLC, a client-driven management consulting firm specializing in employee engagement and the author of Employee Engagement: A Roadmap for Creating Profits, Optimizing Performance, and Increasing Loyalty. Having spent over 20 years focusing on the human impact in organizations, Federman has become a recognized leader in the corporate world and the performance improvement industry.   He has traveled the globe consulting in North America, Asia, Europe, and the Middle East, working with organizations of various industries and types.


Jeffrey Bilich is a Business Development Manager with Assess Systems.  Assess Systems has over 25 years of experience and is comprised of organizational psychologists and HR management consultants.  Assess Systems delivers a variety of custom and off the shelf HR solutions for competency modeling, selection process design, entry-level assessments, competency-based professional and managerial assessments, sales assessments, leadership development, 360 feedback, succession planning, performance appraisal and executive assessment and coaching.


One thought on “2010, The Year of the Recovery

  1. Pingback: Tweets that mention 2010, The Year of the Recovery « The Engagement Factor Blog -- Topsy.com

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