Tuesday, January 05, 2016

10 most common mistakes to avoid when planning and executing a hotel pre-opening and opening

A professional managed pre-opening process with extraordinary attention will likely lead to a smooth opening and this will help ensure a successful hotel operation for years to come; all my experience of 14 openings suggests that failure to direct and resource the pre-opening will have detrimental, sometime disastrous, effects for many years and in a managed hotel will certainly create tension between the owners and the operating company resulting in deteriorating relations and loss of confidence.

The hotel business, like any other business, is a business of detail evidence by the fact that the pre-opening check list prepared by Hotel Solutions Partnership shows 600 or more interdependent activities including the monitoring of the progress of the pre-opening.

The General Manager and each department head will each have check lists and all should be co-ordinated and monitored for progress by the General Manager as project manager. In a managed hotel there will also be teams contributing to the process from the head office teams of the operator as well as the office of the owner.

This is a critical phase in the life of the hotel and close attention must be given to it by the selected hotel team together with the head office in order to ensure the maximum return on the employed capital (ROEC) from day one.

Quite often, this task is not given adequate importance and deserved attention, especially by owners who are not familiar with the hotel business. Wrongly, some owners delegate full responsibility to the operator without regular control and accountability.

Based on my experience, here are the 10 most common mistakes to avoid when planning and executing a hotel pre-opening and opening:

1. The absence of adequate pre-opening offices furnished with basic equipment required for such a period such as office furniture, telephones, internet address, and a web site, etc.

2. The absence of detailed check lists for the General Manager and all other departments indicating the tasks to be completed and the timing. The development of the lists and their co-ordination must be done by the General Manager with close supervision from the operating company’s head office and regular follow up on the progress by the owner. It is highly advisable that owners have regular meetings with the General Manager, once a week or at least bi-weekly to monitor the progress on all activities and ensure timely compliance.

3. The absence of a detailed back of the house budget (B.O.T.H.) for all equipment needed to operate the hotel; this budget must include all items which are not included in general interior design of the hotel. The B.O.T.H. budget must include all specifications and details together with budgeted prices. This budget may include, all operating supplies such as (glass, silver, linen, kitchen utensils, bars utensils, china, uniforms, engineering tools and chemical supplies, some standard printed materials including menus, and all other rooms and food & beverage operating supplies), IT equipment, offices furniture, telephone system, computer terminals, photocopiers, and any other material not addressed by the interior design items. The B.O.T.H. budget should be completed at least 12 months before the opening to give enough time for obtaining quotations and placing the orders. All items in the B.O.T.H. must be received in the hotel at least one month before the estimated opening date to have the time to place the office furniture, price the operating equipment and store them, issue all operating supplies to the various operating departments in time for washing and training, etc.

4. The absence of a detailed, comprehensive, and realistic pre-opening budget. Gross estimates for the various activities such as advertising, manpower etc. are not adequate. Details of advertising campaigns and the targeted market must be indicated. Timing of hiring and the start date of all department heads and associates must be indicated by position. A complete budget for compensation and benefits in the pre-opening period is needed. General Manager expenses must be detailed by category, travel, office expense, other promotions, legal fees, recruitment fees, training fees and other operator expenses during the period, etc.

5. The absence of attention to legal matters such as licences required to operate in the country e.g. liquor licence, operating licence, etc. This also includes the preparation of various standard contracts such as employment contracts for local and expatriate employees, utilities, shop lease contracts, banquets, sales, special events, maintenance contracts, and other commercial contracts. Another legal matter that must be well understood is any legal requirements for maintaining the books of accounts and billing procedures, all statutory information on payroll preparation, payroll deductions, labour laws and regulations, social security rules by worker category, insurance for employees (workmen compensation) property insurance, third party insurance and all other insurances required by law.

6. The absence of a realistic time frame to enrol the required personnel in the payroll. This is a critical activity and by far the largest expense during the pre-opening phase and must be monitored very closely in order not to overrun the budget which can be easily done. The recommended time frame must be presented and discussed with the owners well in advance. In most pre-openings, and subject to the hotel’s size and facilities, the following time frame should be adequate in order to ensure a smooth opening:
The General Manager (12 to 14 months before the expected opening date)
Personal Assistant (PA) to the GM (10 to 12 months before the expected opening date)
Director of Engineering (10 to 12 months before the expected opening date)
Director of Finance (8 to 10 months before the expected opening date)
Director of Sales and Marketing (8 to10 months before the expected opening date)

6. The absence of awareness building in the local and international market, not just online but using every traditional channel to ensure that all those capable of influencing demand are aware of the unique aspects of the new facilities – and the desire of the management team to provide great hospitality experiences.

7. The absence of a professional website detailing the hotel’s facilities, prices and availability – and the opening date!

8. The absence of a sustained programme of contact with the financial institutions funding the hotel, directly or through the owners.

9. The absence of proper documented handover of the facility to the Director of Engineering (DoE). The DoE must take advantage of the presence of all the various technical professionals during the building to become fully acquainted with all technical aspects of the building and its equipment.

10. Finally, it will be an additional advantage if the General Manager and other members of the team have had prior experience in pre-openings and openings; if not, close and periodic tight control must be exercised by the head office and the owners. 

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