How Flip a Distressed Hotel in 6 Months or Less? |Hotel Marketing
February 22, 2021|Hotel Marketing
Flipping hotels can be a very worthwhile venture. Although it comes with big risks and requires considerable investment, it proves to be a very lucrative trade if done right.
It all begins with identifying a poorly-performing hotel and getting on a mission to turn things around. Flipping a business is an opportunity to declutter, make the necessary changes, and go back to basics, with the goal of improving increasing revenue and improving its overall performance.
Since the risks can be high, and investments are at stake, there are some things that should be considered before making any changes.
First, you must learn about the current processes being implemented, how the business is being run, and how the staff is doing things. This is important because the only way you can come up with a valuable solution is by knowing and understanding the root of the problem. Why is the business not making money as it should?
One of the reasons why a hotel fails is when it has varying profit margins arising from multiple distribution channels and complicated sales processes which then cause difficulties in revenue management. This is why it is a must to evaluate the hotel sales data, determine its weaknesses, and plan a solution around it. Aside from making the most of all available information, this stage should also be used to check what other data are being gathered and whether they are relevant to what you are trying to do.
The hotel’s revenue per available room is one of the most important determinants of how well or poor the business is doing. This is an example of information worth looking at, before taking any steps in flipping the business. There are various metrics that can be used to monitor this variable, and this is just one of the many different areas that need to be assessed.
Another reason a hotel flop is poor cash flow. It is possible that a business has a great profit margin, and appears to be doing well, but due to overheads, it is in fact not bringing any money to the bank. A critical part of flipping a hotel is ensuring that there’s always more cash than what is required to cover day-to-day operations. To increase cash surplus, it should be a short-term goal to reduce all unnecessary expenses.
Another thing to consider carefully when flipping a hotel is managing human resources. To be able to successfully flip or transform a business, there is almost always some sort of cultural change required among employees. Because certainly, you cannot keep doing the same thing and expect different results.
It is a known fact that people have different responses to change. Some are quick to adapt, some take time, and some try their best to resist. Always consider what their current system is, and what they do before implementing any changes.
When it comes to managing hotel staff, it is vital for hotel owner-managers to make sure that they understand the why's and how's of the transformation. It is their responsibility to challenge the prevailing system and introduce a new one that will hopefully improve the business situation. It is important that they recognize their role and contribution to what the business can achieve. Employees that are well informed, respected, and with high morale are more likely to give outstanding service to customers, translating to better business. If you are looking to flip a hotel, or just looking for ways to increase your business revenue, we can be of help. You may contact us at Bezla.com or call 1 (888) 999 8086.
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