The Chesapeake Point of View

As seen in Hotel News Now: A bull market can lead to missed opportunities, is it as good as it gets?

As seen in Hotel News Now: A bull market can lead to missed opportunities, is it as good as it gets?

July 31, 2018

What happens when your hotel’s performance levels off? As any prudent owner or asset manager knows, “this is as good as it gets” rarely, if ever, is an acceptable response from your management team.

While the current economic cycle has presented real opportunity for the hotel industry, it has also masked the reality that there are a number of underperforming properties out there. If the trend line is going up, there is an (understandable) tendency to think everything is going great.

But the reality is, in hotel management, there is always room for improvement. Ironically, owners who are satisfied with their hotel’s results are at greatest risk: they might not know what they are missing.

As a company, we fundamentally believe that problems begin when you accept the status quo with regards to performance potential.

As good as it gets?
All hotel investors are programmed to look for opportunity. But a strong market can complicate that search. While a rising tide might lift all boats, it can also make it harder to spot that slow leak below the waterline.

Almost every hotel has its share of challenges—they often include dated exteriors, an uninspired staff, unfocused sales efforts or perhaps a mediocre online reputation. Sometimes it takes new leadership to overcome those challenges, to see things with a fresh eye and to aggressively seek out new opportunities to manage operational costs and improve hotel revenues. Once previous operating and sales assumptions are cast aside, a new strategy can be built from the ground up, reorganizing and optimizing departments when necessary. The results can be immediate and unequivocal, with potentially eye-popping increases in revenue, GOP and revenue per available room index.

Leadership and culture
Never underestimate the value of leadership and company culture from your hotel management team. Having the right property leadership is critical to executing an efficient takeover strategy. Nothing matters quite so much as culture, though—it goes deeper than camaraderie.

Culture isn’t abstract, it’s about efficiency, accountability, performance, setting expectations and achieving results—and that all starts with recognizing you can do better. In my experience, building a great culture is impossible if that culture isn’t focused on success, intensity and achieving results.

Plan of attack
Our takeover procedures begin with a comprehensive “health and wellness” checkup: a complete review of existing structures and operations that form the basis of a new action plan. Essentially, the goal is to rebuild the property from the ground up. Everything from culture and costs to operational and financial attention to detail should be up for review and revising.

Once you ask how you would build this property and product type in this market, big changes—and big results—become possible. We’ve discovered sales teams that weren’t sufficiently engaged with or pursuing markets they should have been; instead they were defaulting to a standard segmentation approach versus a market-specific focus for their hotel. We’ve shifted revenue management strategies. We’ve reorganized sales offices, changed marketing strategies and restructured operations entirely, focusing on efficiency, tracking and sharing metrics. Above all, we work to instill a culture of performance.

The big ones
Cultural shifts. Leadership changes. Staffing, sales and revenue management. E-commerce and digital marketing. Operational effectiveness and emphasis on service metrics. It’s all important, but there are certain key areas that are deserving of extra attention.

Metrics and motivation
Reorient your sales and operations teams to metrics that matter. Monitor those metrics and be transparent. In the push for more productivity and efficiency, incentivize and reward your team. If you are going to ask housekeeping personnel to clean more rooms per day, consider implementing new incentives to make it a positive change versus a new obligation.

Costs and consequences
New strategies and efficiencies are not necessarily about cutting costs, but investing resources that provide a better return on investment. If you make smart investments in your people, your sales efforts, and other aspects of your operation, returns will follow. Chesapeake isn’t afraid to spend more money than previous management teams in sales and marketing, but we can afford to do so because we reliably create a significant sales spike, making a modest uptick in spending inconsequential.

Granularity matters
The best hotel management professionals are extraordinarily granular in how they approach their craft. Our revenue management team analyzes general data on incoming reservations, but we also go through and verify every single SRP to make sure they are properly mapped to the right booking system. Is your hotel sufficiently visible online? Are you missing out on potentially lucrative government business? We have come into properties where one insight alone generated an exponential monthly boost in revenue from multiple sources.

In case you think our hotels might be immune (they are not), we implemented a bi-annual review takeover audit to keep each property focused on improvement. Fall victim to complacency—no way!

Remember, the moment when you think you can’t do any better is when it’s more important than ever to challenge your ingrained assumptions. If you have the courage to challenge yourself and set your expectations higher, costly mistakes can be avoided and valuable opportunities can be realized.

Chris Green is the COO of Chesapeake Hospitality. He brings more than a quarter century of successful hospitality operations experience to Chesapeake’s corporate team, including nearly a decade in the field at various Chesapeake-managed properties. For more information, visit

The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Columnists published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.