What brands don’t know is that they can create great financial strength in their hotels and their owners will pay 100% of the cost. Brands also don’t know that they can create this testbed with readily available resources. Finally, brands don’t know that their non-financial managers are literally dying to learn these financial skills and capabilities now and they want to apply them.
Brands need to evolve. Brands need to sit still long enough to realize they’re selling one thing to owners, expertise in hotel management and management. Brands sell expertise for all aspects of running and running a hotel. Not only more RevPAR, customer service skills and co-worker engagement, but yes, the money too, the bottom line. A brand with a head start on how to create and maintain financial leadership would be very valuable to an owner.
When brands mandate training programs in their hotels, the owner pays 100% of the cost. For service training or coworker engagement, brands do this on a regular basis and it’s good business that they do it. Everyone benefits: the owner, the brand, the colleague and the guest. So let’s look at a financial leadership training program, who would pay and who would benefit? Well, if a brand required a financial leadership training program, the owner would pay. In turn, the beneficiaries are: the hotelier obtains a better financial result, the brand strengthens its financial bench and its expertise, the leaders and managers benefit because they now have extremely valuable professional financial skills, everyone wins !
One of my clients taught me an important secret which I will share with you. How to create a guaranteed ROI for your hotel from financial leadership training.
I had just completed a one-day financial leadership workshop with 40 executives at a large hotel in Vancouver, BC. The general manager stood up and thanked me and asked his team if they got a lot out of the workshop. The group was very enthusiastic and I received excellent feedback on my work. He then said something that I will never forget. He said, “I would like you all to make a deal with me.” He then raised his hand and like the army, all the hands in the room went up, it was very cool. He then said, “To pay David’s fee, I’m asking each of you to find $200 in savings this month within your department; can you all do this? » He then raised his hand and every hand in the room went up! “Thank you all, you are awesome” he said. “One last request, can you all do this every month this year? » He then raised his hand again and all the leaders in the room did the same.
There are two important leadership styles that he masterfully demonstrated. Agreements. He asked his leaders to make a deal. Notice he didn’t tell them what to do. Agreements are a powerful way to lead, and they are far more effective than directives or expectations. If someone is breaking their agreement, you can start with, “I thought we had a deal.” It’s a much better intro than “You didn’t do what I told you to do!” The second style of leadership he exhibited was what I call transactional direction. Our business is about high volume transactions and knowing that there is no magic bullet for better profitability, it is sprinkled all over the place. In a hotel, there are a million ways to save money and generate more revenue, and the reverse is also true, there are a million ways to waste money. The difference is, do you have a team looking for savings and efficiencies or do you have a sleeping team.
So, let’s take a closer look at that $200. Forty leaders are all saving $200 this month, or $8,000 in GOP this month and $96,000 in new GOP this year. Using a cap rate of 8 which equates to a 1.2M increase in asset value. Not bad for a $200 start.
Financial leadership is not complicated. But it takes leadership and prioritizing the needs of your team. Not your needs first, but their needs. With financial leadership, you achieve this by educating your leaders on hotel finances. They will see that it is not so complicated; they will also see that they have new insight into the impact they are having. Each of your leaders wants to have more impact, it’s a basic human need. The final piece is for leaders to see clearly that this financial leadership skill is an incredibly valuable job skill. Talents that now unlock promotions and greater personal opportunities for their lives. When you lead your team this way, they see how invested you are in their growth and how much you care about them.
The result is that they care more about their role and that automatically means a better bottom line.
The hotel financial coach
+1 415 696 9593