As a successful hospitality business owner, you are the CEO responsible for daily operations and for long-term results. It’s tough to stay focused on the longer term while providing for and enjoying your guests and providing guidance and encouragement to your staff. The key to accomplishing it all is to follow a few principles and an evolving plan that provides for today’s success and insures a profitable future exit.
3 Key Principles to Optimize your ROI (Return on Investment:
#1 – Ideally you begin “selling” your property the day you purchase it! Maximizing ROI is a mindset you employ whether you plan to sell your property, transition it to the next generation, or stay right where you are.
#2 – Your business is an asset that can grow and change over time to meet your needs and those of your guests. Thinking of it as a resource, as your playing field, gives you maximum flexibility as your guests’ needs and the travel market constantly change.
#3 – Change Is Good, if you have a plan. Not everything that will affect your business is in your control. Understanding your assets and your value allows you to change with the unexpected and to make the most of every challenge.
Challenges and Opportunities
- World events that affect market demand
- A Buyer appears on your doorstep (and you’re not for sale, or are you?)
- Your personal circumstances change – let us count the ways!
- The next generation of traveler wants and needs something new
What Can You Do?
- Create a strategy that is based on the best available information
- Change your plan as the parameters change, regardless of who changes them
- Own the end results and change them when needed – It’s Your Job!
- Develop your “fantasy board of directors”, no smart CEO does it alone
Know Your Assets
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Money
- A plan for future growth based on knowing your market will tell you where to invest and when. Remember a healthy business plan changes as the parameters change and evolve.
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Stakeholders
- Your “fantasy board of directors” are the people who support your business like your lender, attorney, CPA, investors, association leaders, marketing partners and smart successful hospitality business owners like you.
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Location and Local Network
- Creating a network with businesses that serve your guests creates the experience guests want and the reputation you need to attract new guests. It also grows your community’s stature as a destination and in turn enhances your business even further. This is a complete and often overlooked win-win opportunity.
Real Property
- Maintaining your buildings, guest rooms and grounds has obvious benefits day to day. Deferred maintenance and capital improvements are costly to your reputation which drives your business growth both in ADR and occupancy. Guests see everything and make decisions about future stays based on the quality of their stay.
As the unexpected happens keeping your property in great shape all the time is key to ROI. In a negotiation, buyers assess deferred maintenance at a much higher cost and assume what they see reflects even greater issues they cannot see.
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Staff
- Hiring, compensating, training and maintaining the best staff is a critical management task. If you are not treating your staff at least as well as your guests, then you don’t understand the hospitality business and the power of paying it forward.
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Guests
- Marketing to attract “your” guests, those travelers who will most enjoy and repeat the experience, is among the most important things you must do. Unless this is your professional background, to truly succeed you must hire a hospitality marketing partner whose focus is entirely on reaching your guests.
Once you have a guest in-house your job is to deliver on the promise you made in your marketing. Learning to listen to guests to learn how best to meet, anticipate and exceed their expectations is your most powerful tool.
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Brand / Reputation
- Your brand is established through both professional marketing and the experience you deliver when guests are in-house. Reaching today’s traveler through your web presence, social media and well placed reviews on hospitality search engines is key. In addition, you will establish and nourish your local, regional and even your national hospitality network through participation in associations and industry groups.
Your Exit Plan
It’s never too soon to explore your exit plan, to understand your property’s value, and to think about what your next chapter will be. Not only have we helped several clients to successfully sell and exit their businesses, we’ve done it ourselves with our former lodging properties.
Contact us if you’d like to learn more about how Inn Advisors may help you with your exit strategy.