Is the wolf scratching at the door? Lessons learned so far from the COVID era...
— 10 experts shared their view
The past six months of the COVID-19 pandemic has forced companies and individuals to reconsider not only what they do, where they do it, and how they do it, but also why they do what they do (or don't do what they don't do). In other words, it has forced executives to reflect more intensely on both the external environment in which their firms compete and the ways in which they do so. Strategic thinking, management, and implementation have never been more important than now in the hospitality industry as countless firms across the world are fighting for their survival. As Professor Richard Rumelt once wrote, successful companies may not actually engage in strategy work until the "wolf is at the door." In today's COVID-19 world, not only is the wolf at the door, but he is scratching to get in, ready to blow the house (or hotel) down. The question, therefore, is what have you and/or your firm learned most about your business strategy, and what are you doing about it?
Senior Director, Head of Planning & Development and Valuation at Horwath HTL
“Planning is Everything; the Plan is Nothing.”
This quotation is usually attributed to former US President Dwight Eisenhower. He meant it in a military context. When the wolves at the door are soldiers (or even heavily-armed and bizarrely-dressed “Republicans”), your plan may have to change rapidly and radically, but you must have one, and you must be clear about where your plan is taking you. This means strategy.
Strategy and planning provide the link between the current and the future direction of a business.
Strategy isn't vision or mission.
A vision without a strategy is a dream.
A mission without a strategy is a hope.
It is therefore important to separate the process of strategic thinking from the management of current operations. Riding a bicycle and changing a wheel at the same time is a difficult trick to pull off at the best of times, but this is what having and implementing strategy means for the hotel business; a business that has to deal with glacial real estate development lead times, combined with rapid changes in consumer habits and behaviors. Just because it is difficult doesn't mean you can avoid it without negative consequences.
What have we learned after nearly a year of stop/start lockdown caused by a health crisis that has brought into question the very existence of the hospitality business?
We have learned that we humans love making plans and that the removal of this privilege causes confusion, frustration, and short-term decision-making.
That when things are going exceptionally well, we forget about cycles (economic ones, not two-wheeled ones).
That making a plan is not just a question of taking last year's results and adding 10%.
That profit-taking in the hotel operating business should take second place to investing in the future of that business.
That sound asset management is often the difference between life and death for a hotel.
That hotel assets must either be future-proofed or recyclable.
That the privileged few depend upon the low-paid many to provide the hospitality services that we all took for granted.
That the world probably has too many bars.
That the traditional conference business model is broken and something should be done to mend it.
That EBITDA per square meter is the only truly comparable measure of management success and profitability.
That renting out hotel rooms during the day is no longer a suspicious activity, and that chairs in rooms are for sitting on and working, and not decoration.
That people value their health and wellness above almost everything else.
That, in any business, cash is still King.
We have also learned that a forced timeout helps us to re-examine, re-think, and adjust our plans; something we should all be doing, all the time. Best not to wait for the next crisis.Related article by Philip