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Running a Restaurant or a Hotel? Driving a Car? – It’s All the Same

It occurred to me this past Saturday as we drove to Kensington Market here in Toronto that driving your car is similar to running a hotel or restaurant operation.

You take care to run your operations according to the law. You make sure that systems are all maintained and running smoothly, you insure against all events untoward. You pay on time and have a great culture and reputation, spend on training and market your property as it should be. In short, you operate a well-oiled machine.

It’s the same with your car. You service it regularly, keep it clean and running well. You have up to date insurance, and drive it according to all the laws. You have not received any parking tickets and keep within the speed limits at all times.

Yet we find ourselves being strangled in both scenarios, and I will explain what I mean.

More and more vehicles are hitting the roads every single day, driving up the costs and forcing you to spend more time on the roads, spending more on fuel and maintenance. Inevitable there are more accidents and that drives up your insurance costs, not that the companies would not increase your premiums anyway. More cars equals more pollution and you breathe it when driving or even when crossing the streets.

How about hotels and restaurants, you ask?

Every day you read about new hotels being opened everywhere across the globe, but also in your city and market. The same goes with restaurants. Payroll costs rise every year, and some more than others in the quest for the best staff in your operations. Utilities? They go up. Operational equipment? Up. Supplies for the operation such as linen, paper goods, cleaning supplies and more? Up. Food and beverages? You guessed it, up. City taxes? Up.

More hotels mean more hotels in your competitive set and that can drive rates down. You’re getting squeezed evermore by the OTA’s too.

Now back to our cars.

In almost every city the guys and girls that run them are looking for ways to empower cyclists. They are cutting car lanes completely along some roads in order to create bike lanes, and that creates heavy traffic on some of the busiest streets in town. They even cut down the number of parking spaces forcing you to pay higher rates in the parking garages. Take a look at the picture above I shot in Kensington that got me thinking.

So, more cars, less road and less parking. Remind you of the hotel and restaurant market?

What is an honest guy to do?

Similar to what the Waze app did for us in creating shorter routes with traffic input, we have to look for creative ways to keep turning a profit.

We have to get to know our streets a lot better and how to navigate them and during which period of the day. We have to get to know our cars better and explore ways to make them cheaper.

How does that translate to the hotel and restaurant industry?

You have to do an in depth review of ALL factors of your operations. You have to dig deep to see whether you can streamline your systems to save on energy. You have procure at the right prices and stock just what you need. You have to keep your reputation high to attract customers and you do this by treating your staff fairly to create a great in house culture. You train your staff to give consistently excellent service. You make sure that scheduling is exact and that staff numbers are spot on. You keep your house clean and well maintained.

And one more thing…………..you differentiate yourself from the competition. Every hotel in similar classes are very similar today. Create a unique identity for your establishment by using your location, history or community……..or invent a reason! Adopt green initiatives and support your local community. Make sure to purchase as much as you can locally to increase your reputation in the city.

Of course it is a tad more difficult to do this than running a well maintained car, but how many cars have you seen that could do with a lot more care and maintenance? How many cars do you see that do not obey the rules of the road?

So if it is easier to maintain a smooth running car and so many just do not do it, then how many hotels could do with an overhaul?

You cannot just sit idly while costs increase and your revenues do not keep up. You cannot blame the markets for new hotels or cars on the roads, whether old or new.

The best (and only) thing to do is to use the winter slow periods to explore how you can react to these new conditions and come out stronger in spring, ready to do battle with the competition, but with renewed identity and vigour!

If you take the attitude that “there are no such things as problems, only solutions” you will find the way to keep your establishment competitive and keep making a good profit.

It takes hard work and a lot of effort, but is so satisfying in the end when you reap your just rewards. Try it and see.

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