Industry Update
Opinion Article 9 June 2021

Strategy Before Tactics: A Lesson For Hoteliers

By Bill Scanlon, President and Chief Executive Officer of Strategic Solution Partners

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Scanlon

We must be more strategic!

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You’re not strategic enough!

Get out of the tactics and think strategically!

Sound familiar?

Let’s take a minute and ground ourselves first.

Strategy = a plan of action or policy designed to achieve a major or overall aim.

Tactics = individual actions carefully planned to achieve a specific end.

Though the clarity between the two is self-evident in the context of their definitions, they are often used interchangeably and are the most confused when applied in a business environment.

What is Strategy?

Strategy is what you do when you are starting out. Whether it is business positioning for a startup, a new product design, or the launch of a campaign, strategy is taking the time to think through, to question and to align the overarching focus.

Setting strategic direction is the single most important thing you can do for your team, your business, and yourself. However, it is often interpreted as too time-consuming, too esoteric, and too uncomfortable. Why? Because it is not an area of strength for all and can be intimidating.

By spending the time upfront to outline your strategy, you are improving productivity, accelerating your growth curve, expediting your decision-making, and clarifying your process definition, talent requirements, and communication. It is also the best way to avoid wholesale reworks or write-offs.

What are Tactics?

Meanwhile, tactics are the practical execution of the strategy. Strategy is the rudder by which you facilitate your tactics. Tactics are how you bring form and function to your strategy. Unfortunately, strategy gets shorted, and everyone gravitates to the tactics. Why? Tactics are tangible and measurable.

The “Tactic Trap” is one of the greatest pitfalls in operating your business. The problem is that you are not only potentially wasting your time by putting tactics first, but you are also likely going to waste the productivity and wages of your team. You can avoid the regret of realizing down the road that you needed better strategy, better planning and potentially different talent and resources.

How Hotels Can be Strategic: A Hotel Example

A portfolio of branded, extended-stay hotels expanded by building a new upscale property. While the existing group of hotels were two- and three-star quality, this new property would easily rate four stars. The problem was that, while they aspired to that more elevated rating, their hotel company had a clientele who preferred to pay two- or three-star rates. They wanted to appeal to a different customer, but the new hotel was linked to their legacy operations.

The strategy was to bridge that gap and target the right customer for their new, four-star hotel without alienating their existing clientele.

Step 1: Understand their Customers

The first order of business was to identify the qualities of their target customer and isolate that profile within their existing customer base. They needed to identify the competitors for this new hotel, and then work to attract customers from those competitors by messaging only this new product. In the meantime, they needed to bridge the financial performance and debt service of the asset.

Step 2: Optimize their Mix

Tactically, they devised a mixed-use approach, dividing the inventory into a certain percentage as rental/long term stay, a certain percentage on their core of extended stay, and a certain percentage for transient inventory. This allowed them to build optimal occupancy, yield rate by segment, and be flexible with their inventory to shift the mix as the market and margin required.

Step 3: Combining Strategy & Tactics

Understanding the difference between strategy and tactics, both the value they bring collectively, and the importance of investing in both equally, will allow you emerge stronger and more focused than ever. Now is the time to create new operating behaviors and cultural norms/expectations. If you are good at strategy and not at tactics, surround yourself with people who compliment you. Balance your team to get the best of both. If you do not have that balance internally, bring in an outside hotel consultant who can facilitate what is needed to set the path.

Bill Scanlon

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