Another business lesson from that hotel in Utah…
Yesterday, I mentioned the unnecessary discount. That discount was on top of a ridiculously low rate to begin with.
I paid about $60, including tax, to stay in a brand new hotel during the peak of tourist season.
Now here’s the interesting part: The hotel bistro was closed because the cooks and waitstaff were turning rooms.
Think about that. A profit center for the business was closed because they hotel was understaffed in the housekeeping department.
Why is the housekeeping department understaffed?
The manager told me it was because they weren’t able to find any people, and that students going back to school were draining their labor pool.
If he had been a consulting client, I would have told him that he didn’t have a staffing problem, he had a revenue problem.
The hotel was charging half the local going room for a night, on the misguided notion that it would bring in guests. But when you’re cutting revenue to the bone, you don’t have the money to maintain the most essential functions of the business.
If they were at least charging normal room rates, they would have the money to incentivize hiring. They could pay new hire bonuses, offer a higher hourly wage, provide some benefits.
Instead, they find themselves cannibalizing one profit center of the business just to support core functions of the business.
Asinine. Absolutely asinine.
I predict that within a year the major hotel brand that this location is part of will revoke their franchise license.
Key take away for you: Charging adequate fees is what gives you the money to hire quality staff, pay for the marketing that brings you better clients, and provide you the lifestyle to which you would like to become accustomed. If you set your fees too low, that’s YOUR fault, nobody else’s.
So if you know your fees are low, drop EVERYTHING else and FIX IT. This is priority #1 in *any* business.
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