Symbiosis in Hospitality Management

The Five Keys

Peter Alatsas

• Publisher: Austin Macauley Publishers
• Year: 2020
• ISBN:
  9789948340003
• Topic: Business
• Subtopic: Hospitality, Travel & Tourism Industry
• Index: Business

Symbiosis in nature is the interaction between two distinct species looking to forge closer long-term relationships. There are three types of interactions; "Mutualism" (honey bees and flowers for example, where both species benefit), "Commensalism" (A bird's nest on a tree for example, where one species benefits whilst the other is not harmed) and "Parasitism" (humans and mosquitoes for example, where one species benefits and the other is harmed). Symbiotic, human to human interactions seek to form closer long-term relationships based on "Mutualism", the type of interaction where there is mutual benefit. In the business context, symbiosis happens when key stakeholders collaborate as true partners (not adversaries) for mutual benefit. Assets exist to provide value to the organization and its stakeholders. The hotel asset owner through his representative interacts with the hotel brand operator to create value; find improvements, find opportunities. This book primarily looks at hospitality management, key relationships and the complex operational dynamics between two key stakeholders; hotel asset owners and their branded hotel operators focusing on five key principles and a symbiotic leadership approach as a key enabler. There is a lot of room for improvement and it is this crucial relationship that is examined. This guidebook has been written for hotel brand operators, hotel asset owners and their representatives who are managing, overseeing or monitoring a business venture for themselves or on behalf of others. It is also a valuable guide for students of hospitality as well as the curious layman – anyone who has stayed in a hotel.

Understanding Common Terms Used in This Book

It is important from the outset to establish an understanding of terms commonly used in the hotel industry, as these will be used throughout the book. It’s also important to understand the relationship between the key entities in the context of the industry. The harmonious functional relationship between them would be the optimum expression of Symbiotic Leadership for a particular hotel and offer the best promise of success and profitability. Each of the following roles will be discussed in detail in further chapters.

Hotel owner; asset owner; owner – the person or group of persons who owns the hotel and its assets. It could be a private individual, a group of shareholders, or a company. In large, luxury hotels, the owner often does not directly manage the day-to-day operations of the hotel, but will engage the services of a brand management company for an annual fee. The owner will then pay the bills of the hotel through this management company.

Branded Management Company; branded hotel operator; brand operator – this refers to the company that is paid by the owner to manage the hotel and establish its own standards for public recognition, operations, and service quality – in short, its brand – throughout the hotel and in public communication. The brand operator is responsible to the owner for increasing the profitability of the hotel year on year, according to mutually agreed projections, and failure to actualize profits could result in the non-renewal of its management contract.

Owner’s representative; asset owner’s representative – most owners of large hotels would employ a representative to monitor and deal with the management company to safeguard the owner’s interests and ensure the management contract provisions are upheld. The owner’s representative may function on his own or through a small team to assist him. His role necessarily brings him into contact with the hotel G.M., and for optimum performance by both parties, it is vital that they maintain a symbiotic relationship that is based on mutual respect and trust. For simplicity, we may refer to this person as the O.R.

Hotel general manager; G.M. – this is the key person responsible for making the whole relationship work between the owner or owner’s representative and brand operator, as he has to look after the interests of all three entities. He manages not only the hotel, but also the brand that he represents. He heads the hotel management team that handles all aspects of management and daily operation, including drawing up annual budgets, growth and profit targets, and management fees for approval by the brand operator and hotel owner. The selection of the G.M. is therefore crucial to the success of the hotel. Typically, the brand operator will recommend a few key candidates to the hotel owner, who will make the final selection. Thus, the G.M. reports to two ‘bosses’ – the hotel owner who appointed him and pays his salary, and the brand operator whose brand he is responsible for translating into the hotel’s identity.

A Word on Gender

It is, of course, entirely possible that each of the key roles mentioned could be filled by either a man or a woman. Indeed, increasingly, within the ranks of the hotel industry, there are women in senior management. However, most of the top positions are still occupied by men, so without meaning any disrespect to women, for simplicity in this book, we will use the masculine pronouns ‘he’ and ‘him’ to include both genders.

Purpose and Perspectives of This Book

My aim is to provide the reader with an a la carte menu of actionable insights and how-to practices. Perspectives and insights on leadership and hospitality operations asset management are shared, drawing from my experience of over three decades of having served on both sides of the fence as a hotel general manager and hotel asset manager/owner representative in the Asia-Pacific, Middle-East, and Europe, with notable hotel chains like C.P. (Fairmont), Marriott, Starwood, and SanZhi Hotels.

Everything is difficult before it becomes easy. I will show you how you can improve your operations, asset management skills, competencies, and how to manage relationships more effectively without compromising integrity, values, and standards. We will examine together five key principles that will help you leverage your stakeholder relationships in day-to-day operations. A key enabler uniting this whole approach is Symbiotic Leadership, a term I have coined to describe a people-centric approach to management that is based on integrity, inclusiveness, collaboration, trust, and results.

All experts were once beginners. I will show you how you can make the transition from good manager to symbiotic leader, by simply following a proven mantra I have used in the past, ‘Drive Potential, Drive Results.’ I will focus on proven leadership strategies and easily applicable tools and techniques that are easy to understand and simple to apply in practice, so that you can realize your own potential as well as your organization’s potential for maximizing profitability and return on investment.

The Present and the future of the Hospitality Industry

The hospitality industry encompasses hotels, resorts, service apartments, bed and breakfast, restaurants, night clubs, bars, travel agents, theme parks, event planning, cruise lines, tourism, convention centers, visitors’ bureaus, and the like. Hospitals are sometimes included in this list, as some of the more modern ones look and operate much like resorts these days and are also managed by administrators like hotels.

The travel industry, writes Joe Ellison in the Financial Times newspaper, is a business built on experiential joy.

The ‘Experience’ has become an acceptable capitalist asset. Unlike real material stuff, the acquisition of experience has a nobler ring about it. It’s ephemeral, it can’t be quantified. It’s impossible to value. A wonderful experience lends us gravitas. Like a badge of honor. It signifies how special we are. How distinct and how plausibly authentic. The success in the live experience is found in the human contact and sense of belonging.

Needless to say, the quality of the staff is crucial in delivering this joy in the experience. The tourism and hospitality industry are the world’s largest employer of skilled and unskilled labor. According to the World Tourism Organization, seven percent of world employment (mostly unskilled) is in Travel and Tourism. This sector is expected to account for a total of 337 million jobs worldwide by 2023, almost two out of ten jobs on the planet. The travel and tourism economy are expected to grow by four percent per annum from 2017–2023. Very important are the characteristics of the personnel working in direct contact with the customers – our customer contact staff. As experts will tell you, the authenticity, professionalism, and actual concern and happiness of the well-being of the customers that is communicated by successful organizations is a clear competitive advantage. Staff training and development, therefore, become crucial. In dealing with and developing staff, no less than in interactions with guests, an appreciation of multiculturism, as well as diversity, underpins all activities.

In this global, multitrillion-dollar hospitality and tourism industry, with the availability of more leisure time and higher disposable income, new concept hotels have emerged, pointing the way to the future that primarily caters to the bespoke needs and aspirations of discriminate travelers, such as art hotels, tech hotels, bike hotels, ecotels, yoga hotels, and Zen hotels, for example – hotels for people who enjoy health and wellness, and calming and transformative experiences, rather than sightseeing tours.

Our perceptions shape the kind of world we live in. I reckon there are as many ‘worlds’ as there are people. From a management standpoint, how we synthesize the dynamic nature of these perceptions and the essentials of good management practice for advantage and common good is in a sense what Symbiotic Leadership is all about.

The writer, William Gibson, once said, “The future has arrived, it’s just not evenly distributed yet.” The same can be said about globalization and technology. By cultivating an ethos for embracing uncertainty and ambiguity in the modern age rather than resisting it, new opportunities and growth can be found in disruption brought about by entrepreneurial innovations, modern technology, and change throughout the world. The interconnected forces of technology, demographics, and globalization are disrupting the hospitality, as well as all other industries. These forces are expected to continue to influence the way businesses are being run for many years to come. Nothing new here. However, what is new is how we go about responding to existing and future challenges.

Stakeholder relationship engagement is our prime goal in the form of a formal (as opposed to informal) operations asset management model based on the five principles mentioned earlier, to forge closer more effective relationships. I wish to stress here, once again, that we ideally seek to engage stakeholders and not to manage them per se. There is a difference. By ‘engaging,’ we involve them in the process of performing at their level best; by ‘managing,’ we are in a sense, attempting to coerce or control them to follow a certain path as alluded to earlier. We bring about meaningful changes by involving people in the process of moving an organization forward in new directions. Keeping abreast of change and new developments is an imperative for strategy. Being aware of and recognizing real trends as opposed to aberrations or ‘fads,’ for example, also provides competitive advantage. Advantage also comes from being proactive and relevant in the marketplace. ‘Always fresh and new’ is a favorite mantra of mine. Blindly adopting last year’s solution is not an option. Fresh and new responses and ideas must always be sought to keep the enterprise moving upwards and forwards in every way.

Some years back whilst attending a summer course in food and beverage management at Cornell University, a very popular professor, Vance Christian, asked his audience of some 200-plus professionals and students assembled in a vast auditorium from all corners of the globe, “What makes your business special?” No one in the audience gave him the answer he expected: BETTER IDEAS. Good bankable ideas have no borders. To wit: Airbnb, Uber, and others. I’m usually fascinated by the inspiration, or what was the thinking behind an idea, or what were the circumstances, or the trigger that produced the clever idea? Here is a story related to improvement and the development of new ideas.

The founder of Holiday Inn Hotels, Charles Kemmons Wilson, lost his father when he was nine months old and his mother took a job as a dental nurse. However, during the Great Depression, she lost her job and young Charles had to leave high school to find work. One day, he decided to borrow $50 from a friend, bought himself a popcorn machine and put it in the lobby of a movie theatre. This was the beginning of what would be a series of successful entrepreneurial ventures. In time, he managed to save $2,000 from this small business and bought a house for himself and his mother. He then decided to raise some capital and mortgaged the house to invest in a Wurlitzer jukebox franchise. However, his real genius lay in innovating the way that hotels could charge for a room. Hotels generally charge by the room and/or by the number of persons in a room. In Japan, for instance, it is common practice to charge by the number of persons in a room, thus enabling people to share rooms and save money whilst hotels realize extra revenue on a per room basis. However, while vacationing in Washington, D.C., disturbed by the soaring prices, families had to pay to stay in hotels. Wilson got the idea of creating a hotel chain where children could stay for free, and where additional beds for children were not charged. He built the first four Holiday Inns in Memphis on this basis. The rest is history.

Another successful company that merits mention is Marriott, a formidable leader in hospitality management all over the world, as witnessed by their phenomenal growth in recent years in terms of growing their number of hotels around the world and their ability to deliver exceptional and consistent profits for their partner hotel owners. According to this company’s research, the future for hotels will depend on three imperatives: how well they continue to understand demographics, innovate, and leverage technology. In this new, fourth industrial revolution world and post-electronic ‘applications’ economy, hotel companies must re-position themselves. Marriott believes that everything will be managed by phone in the future. With this in mind, they are looking to develop messaging services as brand strategy to target more Gen Y/Z customers (people today in their 20s and early 30s) and to continue to address competition from online booking platforms that threaten their direct relationship with their customers.

The rise of ‘room-sharing’ companies such as Airbnb is of concern, which the company intends to combat with new innovations and technology – or alternatively, if you can’t beat them, why not join them? At the time of writing, Marriott has started offering short-term home rentals in London on its website, through a partnership with a local company called Hostmaker. If this pilot goes well, they will offer it in other cities, leveraging its loyalty program and expertise in branding to stand out in a rather crowded field.

According to their research, their future (as with other hotel companies facing similar threats) will be in digital-electronic communications. Marriott is not the first company to expand into this area. Accor S.A. owns the luxury home-sharing website, Onefinestay. Hyatt Hotels Corp. has invested in another home-sharing startup, Oasis, and recently incorporated its offerings into the Hyatt loyalty program. Hilton, Marriott’s largest competitor, is staying out of this segment for now, it seems. So, we will stay tuned.

Another rather aggressive player in the field making the internet indispensable is The Standard hotel chain, known for its boutique properties in major cities. They are seeking to break the dominance of online-booking platforms with the launch of a recommendations-based app that it describes as ‘the first social travel agency.’ According to Amar Lalvani, Standard International’s chief executive, the app – called Benny (from the phrase ‘friends with benefits’) – would allow people to recommend rooms to friends at the best rate, earnin...

Table of contents

• Symbiosis in Hospitality Management
• About the Author
• Dedication
• Copyright Information ©
• Praise for the Book
• Foreword
• Introduction
• Understanding Common Terms Used in This Book
• Parting Words: In a Nutshell – Tips for the New G.M.
• Bibliography
• Index