WHY DO HOTELS FAIL

THE REASONS FOR A HOTEL TO FAIL ARE AS VOLUMINOUS AND VARIED AS THE EXCUSES THAT ARE GIVEN TO THE INVESTORS AND BANKERS.

Dead hotels do not always lie down. Sometimes they just sit there 'on the couch' glaring solemnly at their successful competitors, incapable of going back to the gym and getting into shape for a  comeback.

There are countless hotel hulks around the world that continue to operate under the radar of their local communities, skeletal remains of their former glory but plodding along or just treading water. Not actually admitting failure and doing something about it, but just wallowing in it!

Absentee owners, passive operators, lazy franchisors...solemn, unmotivated employees, asleep at the wheel department heads......all have a little part to play in the demise of a reputation, the tarnishing of an image and the gradual death of a successful hotel property. Even the clients have a part to play in this tragic, comedy of errors by the acceptance of some of the second grade standards we serve them.

Here are the Top Ten Reasons for a Hotel to fail that we see most commonly,

1. Milked-out. An owner that has vacuumed out the profits for an extended period without the slightest consideration for the future.
2. Idea drought. The point where there is no 'funny money' for the multitude of ideas, like lipstick, that need to be tested to show that the 'old lady' is till charming.
3. Community disconnect. The lack of local, regular community events be they Kiwanis meetings, Chamber of Commerce lunches of Spring weddings.
4. De-positioned. Nudged out from the market position of best to second-best by a new or renovated competitor.
5. Surf & Turf-itis. Boring old-world menus that do not test the creativity of the kitchen staff or create a magnet for the community.
6. Chain-ganged. Addition of a sister-brand in the same market area. The difference in occupancy is the difference between floating and drowning.
7. Straggleritis or Rainy day denial. Every hotel has rainy days. Days when there is a dip in business, only stragglers that are in fact treated like stragglers. Eventually everyone is treated like a straggler, it becomes the norm.
8. Deal mismatch. An owner with a 5-year exit strategy matched with a management contract for 20 years results in a stalemate. Two owners with disparate views, an onerous lease that needs investment in the final years of its lease.
9. Value leak. The profit dwindles, the rates are increased. Eventually the value declines and client resentment sets in.
10. Cost butchery. Too late now for lipstick & silk stockings! Cut everything out, tighten the belt, reduce or eliminate quality, maintenance and investment.

The tragedy is not so much that hotels fail, it is that we fail to see that they are in fact on the edge of failing from the day that they open. The sagging mattress, the worn carpet, the grimy air-intake, all are only a relative blink away from comparison with that new, bright, shiny one down the block.

For an honest appraisal of your hotel's potential for failure, contact [email protected]