Though the impact that COVID-19 has had on the hospitality industry has never been seen on this widespread scale, our leadership team at Valor Hospitality Partners have each experienced their fair share of ups and downs within the industry. Their tremendous amount of experience comes from multiple professional perspectives, each creating a unique but relatable narrative that we believe may help guide you through this distinctive time.
To get a better understanding of their thoughts, we asked a few of our executives to share their knowledge in dealing with distressed hotels by discussing strategies, quick-wins, and approaches that can be implemented into your business moving forward.
Read on to learn from their words of wisdom.
When first approaching a hotel in a distressed situation, is there a process that you use to evaluate its current state?
“The first thing is to evaluate the staff. Regardless of whether a hotel is distressed or not, the staff is the lifeblood and you must assess their strengths and where the opportunities lie… Let them know change is a good thing, and just because ‘things have always been done this way’ doesn’t make it the right way.” – Mike Bulgarelli, Director of Accounting
“In the first stages of evaluation, it’s important to review and evaluate as many performance metrics as possible. [However] It’s important to remember that metrics and data are only one piece of the larger puzzle. Resist the urge to jump to conclusions and make recommendations without the full picture!” – Wade Bryant, Director of Sales and Marketing
“Assessing the management leadership and culture is critical. We find that having a GM with the ability to view the business from guest, staff and ownership perspective is critical. Strong culture drives guest experience and in turn drives profitability… Getting that formula right, and understanding the missing elements in a distressed situation, is key to an effective turnaround strategy.” – Steve Cesinger, Global Co-Founder & Chief Investment Officer
As a leader, how do you re-stimulate a team and get motivation levels up?
“You have to ensure you go beyond just telling someone they are important. Focus needs to be on providing a place of trust and making sure that people know they are heard and are provided the required authority and power to do their job. And the best way to give this trust, voice and power is by actually listening and providing the autonomy to do so.”–Nathan Kivi, Chief Strategy Officer at Valor and Chief Executive Officer of HotelierCo
“It’s important for our team to model the leadership characteristics we expect from the property team, while providing tools, resources and support… Make sure team members understand their goals, help them achieve their goals, hold them accountable to their goals and then finally recognizing and rewarding them for achieving their goals!” –Wade Bryant, Director of Sales and Marketing
“I always encourage open lines of communication and let the team know that the only bad decisions are the decisions not made. Making mistakes is part of what makes us all grow as great leaders, and true and effective leaders learn from their mistakes and use it as a learning tool for the future.” – Mike Bulgarelli, Director of Accounting
What are some examples of “quick wins” that you have done/experienced in your careers that made a positive impact when first working with a hotel in a distressed situation?
“Every situation is different, but we find that immediately fostering open and honest communication with our team members and solicitation of ideas for near term improvements creates a collaborative approach where team members are invested in the outcomes. That does not mean that every idea gets implemented, but getting all of the problems on the table, while simultaneously asking for suggestions, gives team members confidence that their contributions are valued.” –Steve Cesinger, Global Co-Founder & Chief Investment Officer
“The first thing I say to people in a distressed situation is throw away the rear-view mirror. Yesterday is in the past and you can’t go back…regardless of how bad you want to. Use the past as a building block for the current and especially the future.” – Mike Bulgarelli, Director of Accounting
“Identify what processes or policies are stifling productivity or creating unnecessary work for the property teams. It’s critical to remove obstacles and barriers for the property team as soon as possible. Revamp or remove processes that don’t provide value.” – Wade Bryant, Director of Sales and Marketing
At Valor Hospitality Partners, our company elects a ‘White-Knight’ strategy, pursuing win-win situations rather than the traditional ‘vulture’ investor mindset. Compared with your past experiences in the hospitality industry, why do you believe this is the best way to approach helping a distressed hotel and why should distressed hotels utilize companies like Valor?
“Valor reminds me of ducks flying in a V pattern. Everyone knows what needs to be done, leadership inspires passion and admiration of staff and the staff are admired and inspire leadership. What Valor has created is truly a rarity in the hotel management industry. The belief in staff and ability to think differently is what sets Valor apart from other management companies, and not just the philosophy of looking for win-win situations.” – Nathan Kivi, Chief Strategy Officer at Valor and Chief Executive Officer of HotelierCo
“I think it’s easier to look at an underperforming or distressed property and blame the current team. It’s easy to bring in your own people and start over and sometimes that’s what has to be done. But taking the time to really work with the team and discover the diamonds in the rough, takes patience and effort. Getting in the trenches with the property team does two things. It provides invaluable insight into the people and the processes and begins to build a foundation of trust accountability.” – Wade Bryant, Director of Sales and Marketing
“I have had tremendous success in my 30+ years in the industry by being positive and acting as an agent of change. By doing this, you will be able to adapt, improvise and overcome any and all obstacles that you encounter. It’s cultural at Valor…change the culture and create the passion.” Mike Bulgarelli, Director of Accounting
Do you have any advice/words of encouragement for your fellow industry members during this time?
In these trying times, I feel it’s more important than ever to take moments of pause before acting rashly. Treat the people you work with and those who work for you as you like to be treated. The old adage “it’s easier to get stung by a bee with sugar rather than vinegar” is as true now as it’s ever been. Great hotelitarians know this. Great hotelitarians are a unique breed. Great hotelitarians can reimagine the world…one person and one hotel at a time.” – Mike Bulgarelli, Director of Accounting
“This quote has stuck with me for over 25 years… ‘Managers do things right…Leaders do the right things.’” – Wade Bryant, Director of Sales and Marketing
“Having been through many business cycles and economic downturns in my 30+ years, I think the most important advice I can offer is to stay calm and positive. The confidence you exude to your colleagues, customers and teammates and the determination to succeed in the face of adversity is critical. I think it is safe to say that we are all scared by the scale of the unprecedented challenge facing us, but these are exactly the times to bring out our best. I firmly believe that courage is not the absence of fear but rather the willingness to proceed in the face of fear, and courage is exactly what is called for right now.” – Steve Cesinger, Global Co-Founder & Chief Investment Officer
“We don’t know where this will end, but history shows a resilience and ability to bounce back swiftly in hospitality. In the short term we understand we are all going through the same difficulties, look out for one another, help each other and let’s all grow as individuals and a team to come out stronger on the other side.”- Nathan Kivi, Chief Strategy Officer at Valor and Chief Executive Officer of HotelierCo
Tell Us: Fellow hospitality professionals, do you have any more tips for hotels in distressed situations? Share with us in the comments below!