Saturday, July 4, 2009

Lodging Establishments against Economic Crisis

I feel quite like a smarty
reading what i've written
about lodging establishments
coping with recessions

The key to surviving an economic recession is to remain positive to not jump into hectic cost cutting measures;
Which is both unhealthy for the staff, the customers and image of the company (revealing its lacking in sustainability).

Common actions taken by hotels during economic recessions will be retrenchment, to maintain a healthy level of staff-guests ratio.
We also see adjustments of working hours, such as fixing to 8-hours shifts.
This action enables the lodging establishment to save on paying its employees over-time allowances, additional meal or transport allowances.
Monetary wise, we observed removal of year end bonus. This would usually cause turn-over, however during an economic recession it is a safe bet.

An increasingly popular new hotel trend reveals the introduction of multi-tasking for employees and combining of departments.
An example is the development of the MARCOM department which is made up of the Marketing and Communication Department.
Very often, the MARCOM department also and again combines with the Publication Department.
Staff inside the department are required to do all general tasks shared among each other.
At the front-of-house, we see wait staff performing multiple tasks such as serving guests, cashiering and lobbying.
As PM Lee Hsien Loong state that there is a strong need to improve the skills of staff to improve the efficiency, effectiveness and productivity of work done.
Apart from increasing part-time labour, employing interns and trainees are also a popular action to cope with economic crisis.
This is because interns need to strive to get good grades hence will not compromise their effort and performance, more importantly they are not costly to employ and are in better physical condition to work compared to older employees.
Very often, interns are also more creative and equipped with updated industrial knowledge from their institutions.
Also, young staff are more attractive and appealing to guests, moulding a friendly, young and vibrant work environment.

We could also see lodging establishments having short-termed promotions which sells rooms at rock-bottom prices.
Genting Highlands for example, sells its rooms at RM1 per night-stay.
This is often done, with the removal of certain facilities and privilleges such as having a smaller range of toileteries, no free access to swimming pools and gym facilities, no complimentary breakfast. The hotel actually regain its profits from other areas which the guests uses.
This brings us to the next point - Diversification.
Hotels and Resorts that have popular and renowned Food-and-Beverage Departments usually has better sustainability during an economic recession. An example will be the Swiss Hotel; Evidenced when their rooms are not selling very well, it promotes and advertises massively on its Singapore Sling cocktail that customers can bring home the glass. Mandarin Hotel uses the same strategy with its famous $26+++ Hainanese Chicken Rice while Goodwood Park Hotel flares with their durian delicacies.

Hotels will also need to stand out from its competitors to make the edge. As we already know from now, that business travelers are not affected by economic recession. However, their employers will want to maximize its value-for-money. For example if Hotel A and Hotel B has the same rack rates, but Hotel A has a more elaborated Business Center with cut edge technology; Hotel A will have a bigger market share during the recession. This is the reason to hotels going high-tech at the moment.

The bottom-line is to remain positive and flexible.


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