Operations

Manoeuvring operations

Every hotel identifies different operational hiccups in its lifecycle. The uniqueness lies in the way they encounter the issues and tackle them in the best way possible. By Sanjeev Bhar

The puzzle of hotel operations is quite tough to crack. It is owing to the decision one has to resort to and match its effectiveness with the measurement of hotel's success - achieving bottom lines, graph of profit index, or productivity level or GOPs and so on.

Thus, the options could be vast and the task of fitting them together in a manner so that the final outcome of decisions appears perfect is a tedious one. It is particularly difficult when India is reeling under shortage of room supply. The way to smoothening the hiccups in hotel operations therefore lies in identifying the various issues and dealing with them individually to attain operational sync.

Hotel operations, nevertheless, are constantly changing and professionals are tackling the issues head on. A new hotel company takes on a different approach of offering service by giving the best it can whereas established companies constantly keep a check on various barometers of success to identify the level of competency they would like to achieve. Yet, the essence is in the way a set of critical issues are identified and are tackled in a fashion that works best for each organisation, not to mention keeping its unique attributes alive.

Operational issues

The distinguishing feature of each and every operation varies according to the need of a company. For a new company, the issues can be different from that of an established brand. Pravir Hazra, director of operations at Sayaji Hotels, says, "For a new group like ours, the key challenge is service and the brand positioning. Customers are knowledgeable these days and they assert their demands. Promoting their interest and offering them comfort is a key issue for us."

On the other hand, for an established company like Bharat Hotels, the issues are more refined. Farhat Jamal, president & COO of the group, says, "The operational issues within a group vary according to the property - where the hotel is located, is it in a business districts, tariffs are competitive, facilities provided by the hotel matching guests perception, whether rates and facilities are in sync and so on. These lead to identification of operational difficulties."

On questioning whether he meant that hotels need to be cost-conscious and should put a tab on cost-cutting, he explained, "It is not about cutting costs but about knowing guest requirements in a precise manner. Taking an example of a business hotel, it is not possible in the competitive scenario today to cut down on levels of services and elements of luxury. The only thing that differentiates the hotel is the quality of service and that should be given the utmost importance."

At another level, the operational issue appears vast. It could also be linked to the performance of a hotel, which is attributed to different parameters identified by the business but can't be unfolded department-wise. The Mapple Group, for example, feels that service and manpower are two major operational issues that could swing the luck of an establishment. Upendra Singh Jamwal, the group's vice president (Business Development & Operations), says, "Services provided by the hotel should be value for money for customers. That depends on the manpower quality. For a growing company like ours, lack of skilled manpower is a big hurdle in the operational flow."

This means that those entering the business must understand their audience. Not knowing that can lead to either overdoing things or under-perform as far as service is concerned. This can also add to sharpening operational imbalance. Further, any last moment control is no guarantee that the course of action can be rectified because opportunity cost, in any way, would be lost for that period.

The common thread

Service is the only factor that differentiates hotels and is bound to be a key operational issue as well. The fulcrum of hotel operation is services irrespective of any particular department. The service actually pinpoints the standard of comfort a hotel offers to its customers. The urgency could be sensed by the steps taken by managements to go beyond conventional service in making the experience unforgettable. Hazra explains, "Services are seen as steps to the success ladder. In-between comes the capital issue of financing the services. The services, for the Sayaji Group, are critical and therefore, at our operational property in Indore, in-house guests are allowed to use all facilities available in hotel's club for free. It is worth mentioning here that we offer complimentary airport pick-up and drop facility to our resident guests and do not charge for Wi-Fi services."

The facilities provided by hotels become key consideration to operational measures as this leads to high variable costs. "The mission of the hotel is to attain high occupancy levels, and believe in high sales turnovers and not margin," adds Hazra. Going for elaborate services leads to requirement of service personnel as well. How do we analyse this scenario at a time when most hotels are fighting to attain greater operational efficiency by cutting costs (via negating labour costs)? If efficiency of hotel operation is directly proportional to human resource, then Hazra's perspective is right. If the same issue is dealt otherwise, then manpower becomes the most critical issue. Therefore, services needs to be seen in perspective of human resource.

Further, selling hotel rooms at a feasible cost, maintaining a non-fluctuating rack rate are some routine challenges for hotels these days. Companies, as per their policy, follow tariff where costs could be recovered. Now, costs are expenses. But Hazra differs. He says, "We see opportunity in offering services that might lead to revenue crunch but that does not deter us from claiming our loyal customers again and again, which actually keep our aim of sales turnover floating."

On the other hand, Jamwal remarks, "Every hotel is looking at bottom lines of 12-20 per cent. The crux of all deliberations for a smoother hotel operation is all about strengthening bottom lines by saving operating costs substantially and minimising the cost of acquiring and retaining a customer." Hospitality is said to be the industry of dealing with people. Jamal agrees that the emphasis on manpower in this industry is higher owing to the high degree of people interaction involved. "A customer perception is held high; customer satisfaction, employee perception and the level of services rendered and so on impacts the business directly. Therefore, human interactions at all levels, internal or external, should be given importance," says Jamal.

Consolidation steps

Irrespective of established or newly formed brands, the concerns purely revolve around manpower and the crunch they are facing right now. The way people are tackling this issue gives the best glimpse of a company and its ultimate vision that may not get reflected in the vision/mission statements.

Jamwal feels, "The cost of employees has risen owing to the number of other avenues opening up and paying considerably higher than the hospitality sector. This is a difficult proposition for groups that are looking at expanding their horizon. Becoming self reliant is therefore key and promoting spirited individuals can help a group function better."

On the other hand, Jamal has a different thought on manpower. "It is certainly the most critical issue in the operation of a hotel. The problem creeps from the sour relationship of a subordinate with his immediate superior. If that can be dealt properly, most issues could be resolved without much fuss," he exclaims.

It is because of this reason that almost all hotels in India are very conscious about the way HR is developed and nurtured to enable smooth flow of all operations. Being a sensitive issue, training and retaining of employees have taken centrestage in the hospitality. According to Jamal, in this industry the greatest reason for employees leaving an organisation is the relationship with the immediate supervisor; it is neither the company nor money. "It is up to the boss how he or she handles situations. Work involves long hours with physical labour and constant pressure. Therefore, a lot of care and affection should be there for the employees to comfort them. One needs to treat them with respect, with concern and empathy," he explains.

On another level, employee empowerment is claimed to offer all operational answers. It is even deemed as a critical issue that can go a long way in creating operational benchmark. "I feel that employees should be empowered at the lower level with a definite guideline in place to be followed by one and all. The code of conduct should by in sync with the vision of the company for well-managed hotel operation system," Jamal adds.

Voicing similar sentiments is Hazra who says, "We ensure that no guest is ever refused any demand. If a lower level staff takes a decision, seniors respect that to show guests that the company cares about them. This also brings about a sense of belonging and confidence among the lower rung staff and boosts company's image."

ESOPs have been hailed as one of the best way to prevent high employee turnover. Hazra says that our policy is simple. Every six months, 25 per cent of the profit is distributed among staff members. "This not only keeps their hopes high but also gives them reason to consider various operational hindrances as their own. It has been a wonderful tool that the group is implementing and leveraging outstanding operational standard," he claims. Thus individualistic approach is used to study the grammar of each situation and different approaches are resorted to, to achieve the optimum level of operational efficiency a hotel can expect to bring about.