"The Hoteliers Art of War" - Chapter One "Making of Plans"

"The Art of War" by Sun-tzu adapted to the competitive Hotel business where these days almost anything goes. Richard B Evans CHA, CHAE, CRME created an adaptation "for fun" for his staff comparing the original writing to the serious business of running a hotel in todays market.

"The Hoteliers Art of War"
Practical Applications of Sun-tzu's "The Art of War' to the Hotel and Resort Business.

Tuesday, September 1, 2009
Chapter ONE - Making of Plans

War is a grave affair of state;
It is a place of life and death,
A road to survival and extinction,
A matter to be pondered carefully.

If you're in the Hotel business theirs no denying it; you're in a constant state of warfare;
Engaging your advisary is necessary in order to provide for your family,
But without profit, the hotel can not survive.
Leaders must have time to "ponder" in order to provide careful tactical assessment on when and how to engage.
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There are Five Fundamentals for this deliberation,
For the making of comparisons and assessing of conditions,
The Way (the DOA or the Reason), Heaven (Seasons), Earth (the Hotel), Command (Controls) and Discipline (Control Procedures).

"The Strategic Plan" provides the five fundamentals.
It is derived from the "S.W.O.T. Analysis" (Strengths, Weaknesses, Opportunities & Threats of the Hotel). If one follows the "Strategic
Plan" he is following the road to success. The goals are profit, enhancement of value and reputation.
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1). The Way (the DOA or the Reason) causes men to be of one mind,
With their rulers, to live or die with them, and never waiver.

The Hotel as an entity must take on a higher importance to its staff.
Through training, interaction, respect, task force involvement,
recognition, mentor programs, performance review and consistency in enforcing all written rules & regulations leaders create "the Way" (the DOA) with their staff.
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2). Heaven is Yin & Yang, Cold & Hot, The cycle of the seasons.

The Hotel must adapt to the seasons and be prepared in advance. Yang - represents summer which enables staff to rejuvenate through training and encouragement; while Yin - represents Winter and requires an optimal effort from all; with salaried managers leading the way through example (6 day work week) staff equally will contribute through efficiency and effectiveness. (training)
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3). Earth is height and depth, distance and proximity, ease and danger, open and confined ground, life and death.

THE HOTEL represents "earth." Use it's strengths to your advantage and eliminate weaknesses quickly. The Hotel is a stage on which our staff "performs". Use the depth and strength of hotel amenities to secure business. Staff must perform consistently and be devoted to service. These are the underlying reasons guests will return to the property. Know the terrain, know the facilities strengths but also know the weaknesses.
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4). Command is Wisdom, Integrity, Compassion, Courage, Severity.

The General Manager (hereafter the GM) leads through quiet confidence, respect and knowledge; but sets the bar high for those in his command to perform. Wisdom is gained only through the study of historical trends, data and life experiences. Through integrity and respect the GM will command effectively.

It sometimes takes a combination of Wisdom and Courage for the GM and Revenue Manager (hereafter referred to as the RM) to make decisions that will optimize revenues. Through calculated risk taking you will increase market share and the hotel will prosper. These are tactics that must be undertaken.

The wise GM also must recognize change and adapt to it. He seizes opportunities without procrastination and thereby achieves victory. (i.e. - social marketing)
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5). Discipline is organization, chain of command, control of expenditures.

"Control Procedures" and the "Employee Manual" must be updated and observed at and through all levels.

The "Chain of Command" should never be broken and an "Organizational Chart" showing the "Chain" should be drawn, posted and adhered too.

All managers are responsible for their budgets and that information must be available and furnished on a timely basis. If the departmental budget will not be met it must be reported at the earliest possible date to the appropriate authority (GM or CFO).

Anticipate cash needs weekly through "Cash Flow Projection".

Condominium / Hotels provide an additional Profit Center in their Maintenance Departments. As such, the Chief Engineer (hereafter refereed to as the CE) must create a "Work Order" in advance of each and every project undertaken showing the complete profit calculated on each job.

Every commander is aware of these Five Fundamentals,
He who grasps them Wins, He who fails to grasp them Losses.
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For this deliberation,
For the making of comparisons, and the assessing of conditions, Discover:
Which ruler, has "the way" (the DOA)?

The Owner - the owner has every right to request that the hotel be run "his" way and at his discretion.
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Which General has the Ability?



The General Manager - as chosen by the Owner

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Which side has heaven (season) and earth (the Hotel)?

Which markets are exploited to fill the properties "need periods" and at what time of the year? Is the property turning potential suppliers away that can deliver rooms in both need and non need periods without using "displacement analysis tools" for justification?

The condition of the hotel facility must be analysed and compared to its Competitive Set. Is the property loosing business because of a flaw that can be overcome?
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On which side Is discipline (employee manual) more effective?

Advantage is obtained through the periodic review of the "Employee Manual" and the strict adherence to all rules and regulations; fairly, honorably and consistently applied.

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Which army is stronger?

Time must be devoted to the training of staff. Only than can one be assured of an advantage over Competitive Set.

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Who's officers and men are better trained?

Managers and supervisors who adhere to the wishes and desires of the GM and allow he/she to dictate the course of action are superior officers.
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In which army are rewards and punishments clearest?

All changes to the "Employee Manual" must be dispersed and understood by all. All punishments, suspensions, demotions and/or dismissals must be done free from discrimination and consistently applied.
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From these
Can be known, Victory and defeat
Heed my plan, employ me, and victory is surely yours; I will stay

A adherence to current "action plans".
An adherence to the "Strategic Plan".
A comparative analysis of competitive set.
An analysis of budget and projections,
A continual analysis of customer critique and survey
A comparative analysis of Profit & Loss to Industry Averages.
Through such analysis Profit can be assured.
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Do not heed my plan, and even if you did employ me, you would surely be defeated; I will depart.

Deviate from plans, actions, comparisons and analysis and you stand a greater chance of operating at a loss. (defeat)
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Settle on the best plan. Exploit the dynamic within, Develop it without

The "Strategic Plan" should be developed with a contribution from all department heads. The Executive Team should "own" the Strategic Plan and it should be their quest to monitor and administer the same.

Exploit the dynamics of rate optimization through daily review of all rates, packages and plans available. Establish "Dynamic Rate" plans and control adherence to rate changes and restrictions placed.
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Follow the advantage,
And master opportunity:
This is the dynamic.

Control "Supply & Demand" through restriction and rate adjustment. Learn from the history of demand. Learn from history of compression (or overflow rooms) from properties selling out in advance. Train Managers On Duty to react at any hour to emergency news of opportunity. Empower them to take action but not to act in haste.

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The way of war is a way of deception

Know all hotels in your competitive set well; know their SWOT analysis. Observe a strict code of silence at the executive level and control rumor and leaks outside the team.

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When able, feign inability;

Obtain as much information about potential customers that may be commandeered to your property as you can. Do not broadcast any accomplishments in advance. Adhere to the Code of Silence; as stated.

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When deploying troops, appear not to be;

Assign responsibilities to all managers and supervisors to seek out information on groups and events occurring on properties that they are assigned. (i.e. - Visitors Bureau, Chamber of Commerce, Newspapers)

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When near, appear far;

A Code of Silence must be established at all properties and information about perspective inroads to groups should only shared with the appropriate executives.

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When far; appear near;

Keep your competitor off balance.

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Lure with bait;

Lure new clients from competitors by "keeping your ear to the wall". Exploit relationships for information. Learn of unhappiness or mishandling that creates opportunity. Invite decision makers to stay at the property (but if that is done than it is critical that every interaction and every detail is assigned and overseen!).

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Strike with chaos.

When opportunity knocks seize it. "Seize the moment" and move in quickly! You may only have one chance. Don't allow it to escape you. Engage the GM and RM for guidance.

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If the enemy is full, be prepared. If strong, avoid him.

If a hotel in your competitive set is "strong" and if they provide you with overflow you may wish to avoid engaging him directly. But always be on guard in protecting your own market share.

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If he is angry, disconcert him.

At times it is more effective to put a competing hotel in a defensive mode. Cause them to defend their inefficiencies and short falls. Do not engage in destructive criticism of any specific staff member at any competing property for any reason.

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If he is weak, stir him with pride.

The skillful tactician plays with his advisory as a cat plays with a mouse, pitting his wisdom against the inferior property. When the inferior property is stirred to pride he is often acting in anger and becomes irrational and non thinking. He is than at a distinct disadvantage.

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If he is relaxed, Harry him;

Keep your own strength in tact and let your opposition wear himself out. Offer a number of incentives such as upgrades or value added items, perhaps even complimentary rooms to decision makers. Consult the GM, RM and Sales Director (hereafter referred to as the SD).

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If his men are harmonious, split them.

Ambitious hoteliers have been known to be quite cunning! Hire from competitors if and when worthwhile. Obtain information in interviews when opportunity provides. Call the night auditor to seek information! Sure their is most certainly a line not to be crossed! But let us not pretend that all of us wouldn't do our utmost in landing a large account. Often it is the persistent clever salesperson that can deliver.

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Attack where he is unprepared; Appear where you are unexpected.

Attack your adversary hotel where he is weakest. It could be guest service or it could be known dinning inefficiencies. Send out someone on your sales force to discretely investigate and engage. Have a drink at the bar during cocktail hour! But be invisible and subtle! Find the weakest point; and than attack it.

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This is Victory in warfare; It cannot be Divulged in advance.

Your greatest strength is your ability to have a sales force that can quickly adapt to changing circumstances. Not all sales opportunities can be taken back to the office, studied, brain stormed and than acted upon. Sometimes you are confronted with an opportunity and you have to seize the moment. Learn from and adhere to what your GM, SD and RM's wishes and desires are and bring in business that fits those parameters.

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Victory belongs to the side that scores most. In the temple calculations before battle.

The "temple" is the weekly Sales or Staff meeting. Engage the group so that you may use all the assets at your disposal in securing the "victory". Come to the meeting prepared and with all relevant data for decision making and to set an "action plan" into place.

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Defeat belongs to the side that scores least. In the temple calculations before battle.

Do not spend needless time analysing potential business without sharing your opportunity with the Executive Team. Often opportunities are missed when communication takes a second seat. Have confidence in your Team.

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Most spells victory; least spell defeat; Non, surer defeat.

Provide as much detail to you peers as you can collect. Seek them out to assist you. Prepare a SWOT to present as to the needs of a specific group and attack you strengths and address weaknesses or threats.

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I see it in this way and the outcome is apparent.



Victory can be won before the battle is undertaken.

Through use of tools discussed in Chapter One - ("Making of Plans") you are able to analyse, budget, determine and and seize opportunities. By following "the Action Plan" that has been laid you are on the road to success. By being adaptable to change you are on the cutting edge of change (but in my 30 years of experience I have had few surprises!). Through this analysis my hotels have always pummeled rival hotels in the same region, of the same size, of the same caliber and of the same service level that are reflected in Smith Travels annual report of data and statistics. This was never a surprise because by following "the plan" we knew exactly where we were and how well our "Strategic Plan" was performing against all odds.

Use the tools that are available in "The Host Study" and/or "Star Report" (by Smith Travel Research) and the "Uniform System of Accounts" in creating financial statements (Hospitality Financial and Technology Professionals) all of which enables executives to measure their performance directly against competing properties and in a format consistent throughout the industry.
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Hope this different outlook on our business was beneficial. I have found sun-tzu's the Art of War inspiring and very adaptable to what we do and will finish all 13 chapters as it relates to the hotel industry.

Capter Two - "Waging War on Your Competitor -- will follow.















Posted by Richard B Evans, CHA, CHAE, CRME at 7:56 PM 0 comments
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Chapter ONE - Making of Plans
About Me

Richard B Evans, CHA, CHAE, CRME
North Miami Beach, FL, United States
30+ years in the hotel business on Miami Beach and in Fort Lauderdale as GM and CFO. Expertise in Revenue Management and guarantees 20% increase in gross room revenues to any ocean front property. Also motorcycle enthusiest
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