Catalyst Strategic Consultants

Our intense TEC 217 retreat has just concluded.   Members left with a year of firm intent loaded into their guns.

We are at the Post Hotel in Lake Louise and readers will know what that means. Time for me to extoll the virtues of the Post – a beacon of superbness in the Rockies – and to tell a tale of what might have been.

In 2008, the Post and every one else up here, were on the ropes. Tourism plummetted and revenue was way off. But Andre and George Schwartz – the Swiss hoteliers who head up the Post – made a difficult and prescient decision. They would not drop their standards. The crisp linen on every table would remain. None of the extremely well trained and helpful staff – many from Switzerland – would be let go and staffing levels would hold. The exquisite food and extensive menu of exotica would be upheld. The coffee down the hall would be available at 6 am. The wine cellar would not be sold off but remain undiminished.

We kept coming every January and never regretted it for a second. Not one member of our superpowered group has ever suggested we move on. They love coming here. The annual Coupe Denmark is just too big a draw and the comfort of really being looked after makes our focus on the business of zeroing in on members’ intentions for the coming year and beyond easy to maintain.

I am reminded how often that gutsy decision was not made. Other properties are in the hands of the Money Guys. They come under a very different regime. How different?

Well first, they are not hoteliers, they are money guys. Many are real estate based. Hotels were bought before the crash some at staggering costs per door. So they handicapped themselves right out of the gate with a huge capital cost. The way they see it now, they have to feed that with operating profit. Lots of it!

So when 2008 hit, they followed a different course. Word came on high to the onsite management. Here’s what to do. You probably know the script. No decision to hold standards. Cut staff – hard. Skimp on extras. Look for bumps in all revenue streams. CUT CUT CUT.

So the story unfolds. And this happened in many hotels. In a few months, the strong domain management – the ones who know the industry and what has to be there – left. They just couldn’t stomach it. There went the last possibility for holding the line. The cuts took hold. You couldn’t raise them on the phone for 20 rings. When you arrived, you might as well have been alone. Other departures ensue and staff degrades. Of course, the best and most employable left first. As the bargains flowed they frequently managed to attract a different type of guest. Wear and tear and the incursions of yahoos made the experience of being in a first class hotel less special.

They are fully in the grip of the money guys. They run on their own protocol – a reflexive one that we are fully familiar with. Cut costs, enhance revenue with bumps at every turn, cash flow at all costs. There’s no thought to standards or what they might mean in the long term.

You have to have compassion for them. They serve different masters. Their mantra is an ever increasing [and predictable!] return. Their stakeholders demand that.

It’s how it gets translated that’s the problem. When you destroy the basis of the business by following a protocol that is inimical to the business, you can’t come back. A little patience, an eye to the long haul, would make an enormous difference. But I suspect anyone voicing that option would be shouted down in the halls of “sophisticated” commerce.   Maybe the short term returns hold – but the long term has been irrevocably compromised.

The Post is back. This is their last soft weekend, although the dining room was full of delighted patrons being superbly attended to by Vlad and his crew Saturday night. Next weekend they are full and the next and the next. Mostly Canadians, Andre tells me, people who know the Post and come to experience the best mountain hotel experience there is.

I can speak of other properties because we stay in many. How many lost ground due to their reaction to our recent “hard” times? I’ll bet most of us don’t stay there anymore. Despite world wide marketing and still considerable brands that probably carry them along, I’ll bet there was lasting damage. And downstream impacts on cash flow. Not fun.

“You can only lose your reputation once.” Andre speculated. I suspect he’s right. It takes courage to remaining true to that simple truth and what that requires of business owners. I hope it pays them dividends into the indefinite future.

Sincerely,
Doug Bouey
Catalyst Strategic Consultants Ltd.