Turning Around a Distressed Hotel Asset in 6 Months

Reviving a rundown hotel that’s bleeding money is a challenging yet achievable goal. It won’t be easy, but armed with grit, imagination, and some proven turnaround tactics, can resuscitate this distressed asset. Insufficient planning and unqualified management makes hotel asset management a common issue for many hoteliers. Stick with me, and you’ll learn how to bring back a dying hospitality business to life, increase revenue, minimize costs, rebrand the name and put it in the path of prosperity. 

Assessing the Property: Identifying the Root Causes of Underperformance

Reviewing Financial and Operational Data

First and foremost, analyzing the property’s financials and key performance indicators over the last 12-24 months is a start. Any downward trends in revenues, occupancy or rate per room that are observed should be noted. To what extent market conditions versus operational issues have been responsible for underperformance can be measured by comparing these figures with those obtained from other local competitors and regional averages.

Conducting an Operational Audit

Walk through the entire property, evaluating everything through the eyes of a guest. Look for any issues with maintenance, housekeeping, or décor that could negatively impact the experience. Meet with department heads to assess morale, get their take on challenges, and evaluate if they have the skills and tools to drive improvements. Feel free to check all your reviews for the last 12 – 24 months and elaborate on them. 

Developing an Action Plan

You will have a clear picture of what problems are affecting sales and profits most, after carrying out a full operational audit and analysis. Now you need to create a 6-month action plan that encompasses an array of revenue management strategies, cost-cutting measures, capital improvements, staff training programs as well as marketing efforts. The trick is to deal with high impact changes first to create momentum and build morale. 

Executing the Turnaround Plan: Our 6-Month Strategy to Drive Revenue and Cut Costs

Empower Your Team 

Lead by example by fix the problems on hand and showing passion. Get to know your team and the problems they face while on the job. This will not only provide insight to roots of the problems but will also motivate your team. Remember, happy guests come from happy staff. The cornerstone of success is people in our industry. Thus, reviving the workforce and providing guest service and standards training might not be a terrible idea.

Driving Occupancy and RevPAR

To turn things around, focus on driving occupancy and revenue per available room (RevPAR). Lower the room rates by 15% – 20% to attract more guests and ran special promotions offering extra amenities or experiences. However, do not go overboard with the discount offers and promotions. Do not jump on every promotion offer that distributors propose. Just keep it simple and put out only one offer at a time, this makes it easier to manage and control. 

Increase Online Visibility

Nowadays, every business – hotels especially – need to have an online presence. Potential clients will always look for you on the internet. Check if the property has an active social media presence, and if posts are frequent, engaging, and aligned with the desired brand image. Lack of online reputation management and poor social media engagement are easy fixes that can have a big impact. Also, optimize online travel agency (OTA) listings and social media ads to target travelers.

Optimize Operations

Optimize your operations, make them as simple as possible. Reorganize housekeeping routes, updated cleaning checklists, and implement key performance indicators to improve productivity. Simplify the menu in the kitchen; this will improve staff management and proficiency.  Analyze employee performance and staffing numbers. Put in place training initiatives to raise the effectiveness and caliber of services. Employee cross-training could help them become more flexible.

Cost Management

Cost management has to be the most important and somewhat most challenging thing to handle in any business. It is crucial for you to determine and cut out unnecessary expenses when reviving a hotel. You cannot afford any extra expense at this stage. In order to ensure effective use of resources, renegotiate contracts with your suppliers, reduce energy consumption through sustainable practices and improve inventory management. Enhancing profitability and guaranteeing the hotel’s financial stability require effective cost control.

Conclusion

So there you have it – the strategies of how to take a distressed hotel from the brink of foreclosure to a profitable and popular destination in just six months. It takes hustle, teamwork, creativity, and some calculated risks, but the payoff is huge. The hotel industry moves fast, and we’ve proven we can move fast too. If you have a struggling property, we’d love to chat about how we can help. With the right vision and effort, any hotel can be turned around. Just ask us how.