Hospitality Paradigm

The other day in our town hall meeting our VP-Sales announced that henceforth all sales folks are to work from home. I have been in the sales profession for the last fifteen years, and with this company for the last five. I could see most of my colleagues clapping with their emojis during the zoom meeting. And the thought process started working… Why did I join Sales as a profession in the first place?

Being a B.Sc 2nd class graduate from a mofussil town in North Karnataka, I had no option of pursuing further studies due to my precarious financial position and my mediocre academic background.

My first job was as a sales executive in a weighing scale company in Bangalore. The pressure on numbers was part and parcel of my sales job. Incidentally, a few of my colleagues left the sales profession within a year. Those with a better academic record decided to opt for a full-time MBA while others opted for a factory job. I still remember one of them, Ganesh, who told me on his last day, “Ravi, I have decided never to get into the sales profession again in my life. Travelling daily on a bike on traffic-congested roads, customers reluctant to meet you, and if this is not enough, my manager screaming down through my throat asking for the numbers is more than I can bear.”

Somehow or the other, I had started enjoying the profession very much. Within the first month, I was able to close a major order and there was no looking back, thereafter. All these years I have been reaching or surpassing the targets. Even in my company, only I would turn up to the office on Saturdays, and my colleagues from production, design, and QC were envious of me. Their tone would express their envy that salespeople have all the freedom in life, they come and leave the office whenever they want, etc. Bhaskar from the accounts department, while clearing my conveyance and outstation claims, once commented, “you lucky guys, you travel by taxi, live in five-star hotels, dine in the best of the restaurants; and all this at company expense.”

I could not explain to my colleagues doing their desk jobs in an air-conditioned and predictable environment that I was in the field most of the time, working in ‘unpredictable enemy territory,’ where even getting a glass of water, leave aside a cup of tea, was a luxury.

But then, how did I survive and grow in this sales profession? Was it the salary and incentives? It was much more than that. As a salesman, I was not perturbed with rejections. Even though seven out of ten prospects did not show interest in my products, it was the sheer thrill of meeting new people every day. Was meeting these prospects easy in the first place? A friendly conversation with a security guard or complimenting the receptionist to get the decision maker’s name was more of a fun game than a chore.

Quite often a client would be reluctant to share competition details. Going out of factory premises for a cup of coffee or a cigarette, discussing office politics, and sympathising with him on his personal challenges would help break and melt the ice.

Talking with security guards with key phrases in their mother tongue also revealed crucial information about competition activities, which was not only fun but also adrenaline-boosting. However one needs to have a considerate manager to encourage you. My first manager, Mr. Inamdar recognised my passion for sales and the results I was generating. He once said, “Ravi, I do not care what time you come to the office, or how many calls you make. You have been given targets in terms of the number of units, value, and profitability. You know the company guidelines and policies. Within that framework, please get the results. If you need any help, please let me know. However, keep me updated on important developments.” He turned a Nelson’s eye if I crossed company limits on my daily expenses. Once in a while, he would say “I trust that you have spent money from your pocket during this outstation call. The company rules do not allow me to pass your travel expenses, and I have to follow company rules. You may cover this amount in your local travel.”

Mark Twain once said, “I did not prevent my school from getting me educated.” On similar lines, my manager, Inamdar was never an obstacle between me and my targets. He was an exception. Most of my subsequent managers were sadly, otherwise.

Pradip, one such manager used to always hanker about reports. I once told him, “I have surpassed my targets, why then do you insist on daily activity reports?” He said, “In our company, we get orders even otherwise. What I need are reports.”

The town hall meeting on Zoom was in progress. I was drawn out of my reverie. The people who were clapping for WFH sales, did they ever have a passion for sales, I wondered? Both the stakeholders, the management as well as the salespeople were gung-ho about WFH selling, but what might be the real issue?

Harsh Goenka-led RPG enterprises have announced that the sales force henceforth shall work from home. The group has companies like CEAT Tyres, Zensar Technologies with a Global employee strength of 30,000. The office-bound staff is to work 50% from the office. ( WFH: Home will Always be an office for RPG Staff ) . WFH has the following advantages for management:

• Lower office procurement costs in terms of rentals or purchase
• Lower operating overheads in terms of electricity, house-keeping, tea/coffee, cafeteria, etc.
• Lower sales expenses in terms of local and outstation travel, lodging, and boarding expenses. The company also claims that for the salespeople it also amounts to the following: Lesser fatigue, lesser travel & quicker TAT (turnaround time)

In the above article, it was claimed that this would lead to higher employee efficacy and business output with an improved work-life balance.

WFH may be the need of the day. But will the management ever realize that there is another side to the story? For a few star performers, Selling is more of fun, passion, and a personal adventure on a daily basis, which distinguishes them from the crowd. Will WFH and its related efficacy claim, ever address this passion?

And, how will star sales performers differentiate from the crowd?

For details: Contextual Selling – A New Sales Paradigm for the 21st Century

“The tragedy of our age is salary”… writes Sunday Adelaja in ‘No one is better than you.’

My fellow working hoteliers are mostly receiving their salaries in part and the extremely fortunate few, in full by now. One’s reaction to a truncated salary receipt, while not initially positive, must compel ourselves to look at our half-filled glass and consider that ‘I have a salary,’ if even in part; for there are many who have not been fortunate to have retained their employment in these trying times. Thus the need to look at Salary from a philosophical & aphoristic perspective.

Those of us who have a passion for hospitality have chosen our own area of calling and purpose and we are working and converting our life into that area of calling. If you are such a passionate employee, you will realize that if you genuinely believe you are not being compensated with salary, it is then that you become the boss over your own life, for you have not allowed money to rule your life.

Mokhonoana in his aphoristic style writes “The reason that man is seldom satisfied with his salary is that when it increases, he increases his expenses.” For those who have received a 50% deduction, a positive way of approaching the current salary crisis is to remember how one lived when one’s salary was half what it is now. The answer perhaps may startle us – we were equally happy and experienced the same level of wants, needs, and satiation at that time. It is only then, that we began to view our Salary from a philosophical & aphoristic perspective!

This tells us that money is a means to an end and not an end to a means.

There’s no money in poetry, but then there’s no poetry in money, either,” said Robert Graves, the Poet; while Voltaire, the writer said, “Don’t think money does everything or you are going to end up doing everything for money.” Profound statements, both eviscerating the ideal stance in the prevailing scenario.

At the pandemic’s outset many months ago, most international & domestic hotel chains in India took policy decisions to cut salaries as per grades and retrench employees in order to stay afloat. These chains are mostly managed or franchised where individual owners come into play. Those employees who were, and still are blessed to receive any salary, need to maintain an aphoristic perspective, to retain their philosophical sanity. On the other hand, some of the larger Indian chains with self-owned properties did not withhold salaries (barring performance bonus), making their employees amongst the fortunate few in the industry – these few and rare instances display the company’s courage to pay complete salaries during these stressful times and it clearly reflects the importance they give to their human capital.

On the other end of the spectrum, there are some hotels which have retrenched and cut salaries quite ruthlessly. A luxury chain has rationalized all salaries above Rs. 50000 p.m. to the base amount (a Manager earning 60k p.m. will get 50k, and a GM earning 500k p.m. will also earn 50k) while several luxury chains have asked its people either to leave or to sit out until further notice. Dickson G. Watts, Author states “Not to have the courage to accept a loss, is fatal. It is the ruin of many.”

Such are the vagaries of business that in order to survive, a business has to reengineer expenses in tune with market trends. Frederic Bastiat, a French economist of the 19th century once famously said “Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone.”

Airbnb Chairman, Brian Chesky released a note a few months ago, announcing layoffs and the surmise behind it. In the note to his employees, he writes:

“We don’t know exactly when travel will return. When travel does return, it will look different. While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived. Because of this, we need to make more fundamental changes to Airbnb by reducing the size of our workforce. It was important that we had a clear set of principles, guided by our core values, for how we would approach reductions in our workforce. These were our guiding principles:

• Map all reductions to our future business strategy and the capabilities we will need.
• Do as much as we can for those who are impacted. 
• Be unwavering in our commitment to diversity. 
• Optimize for 1:1 communication for those impacted. 
• Wait to communicate any decisions until all details are landed — transparency of only partial information can make matters worse. 

The result is that we will have to part with teammates that we love and value. We have great people leaving Airbnb, and other companies will be lucky to have them. To take care of those that are leaving, we have looked across severance, equity, healthcare, and job support and done our best to treat everyone in a compassionate and thoughtful way.”

This seems to be an empathetic manner of approaching severance and salary cuts.

In the book To Kill a Mocking Bird, by Harper Lee, Atticus Finch tells her daughter: “You never really understand a person until you consider things from his point of view – until you climb into his skin and walk around in it.”

I sincerely commiserate with all my industry colleagues going through this current crisis and do pray that we all live through this period with grace, equanimity, and a strong belief in the Almighty and faith in recovery to better times ahead. It is not easy to have to receive wages less than what has been contracted for and I trust owners will empathize with their employees’ pain whilst implementing such measures.

At the end of it all, we must remember that there is that which is in one’s hands and then, that which is not… As an employee, the quantum of salary pay-out may not be in your hands. However, accepting the inevitable that salary is transient, would be a philosophical way of looking at this aphorism.

In the meantime, it is highly recommended that we invest this time in upgrading ourselves in various areas. You are the best judge for what you need to upskill on, professionally or otherwise. “Better capital in a man’s head than capital in a bank.” – Dickson G. Watts

So keep your thoughts positive. To quote John Assaraf, “Keep your chin up. No one expected you to save the world, otherwise, you would have been born wearing a cape and tights. Just do the best you can.”

Circa 1988, I was chosen for the Management Trainee Program of the fabled Oberoi Centre for Learning & Development aka OCLD, then known as Oberoi School of Hotel Management (OSHM).

Interestingly, the path to this successful selection involved a lot of drive, humility, diligence, and industriousness.

I had always aspired to join the hotel industry. In the 1980s, there were very few people who wished to truck with this industry, unlike now. I learned of the OSHM during this time and read whatever magazines I could on the industry and Oberoi Hotels.

Gen Z (students and new industry workers) may have heard of such ‘prehistoric times – the non-internet age’ from their parents but may find it difficult to comprehend; nowadays any thirst for knowledge is easily quenched online.

A distant relative worked at Oberoi Hotels, Bombay and I requested to be connected with him. I met him for the first time and went to his home to try and understand something about an industry I knew practically nothing about. He was most helpful and supplied me with magazines, newsletters, and brochures, etc., apart from tutelage on the Oberoi way.

IHM Bombay had a professor who was a family friend and I connected with her, to understand what the hotel industry was about. She was very kind to allow me to use the institution’s library to study books on the industry. Lillicrap’s Food & Beverage Service – a reference used even today, was one such book. I poured over all this reading with keen interest, making notes along the way.

All this preparation began a year earlier while in my second year of graduation, and I used this time to also prepare for GMAT and GRE as I was told this would be useful in the OSHM selection process. I simultaneously worked hard to develop my General Knowledge using library time effectively.

Come D-Day, I was all fired up and floated through my college selection (I was the only one selected from at least 100 students). The next stage was at The Hotel Oberoi Towers where I got through the Group Discussion, the written test, and the pre-final interview.

Having got through four stages, 3 months later I was called for my final interview with PRS (Biki) Oberoi and the board of directors at The Oberoi New Delhi. Of all the hundred-odd selectees called in for the final interview, I found myself in the final 18.

Imagine my dismay, when this final 18 were assembled at the end of the interview selection process and told that 15 of them had made the grade. I was among the rejected 3 candidates, who after seemingly getting through the 5th and final stage of selection, had to now fly back home downcast and woebegone and take fresh stock of my life.

I analysed the reason for my rejection and figured that the uncertainty amongst the interview panel, of my passion and sincerity for the hotel industry, probably weighed heavily against me. Being an Economics graduate, my seriousness for this service industry was probably in question. I realised that to show my seriousness for the OSHM, I would have to prove my passion for this industry, the next time I came up before the Oberoi Panel.

I joined a two-year course in Hotel Administration and Food Technology at Sophia Polytechnic, Bombay. During this time did my industrial training at Oberoi Towers, Nariman Point, and then at Sea Rock Bandra.

A year later, when the OSHM selection began, I requested my graduation college to allow me to attend the 1st stage of selection. The rest is history. I sailed through all five stages successfully. In Delhi, at the final interview, I was quite startled when Biki Oberoi told me I had put on some weight since my previous attempt a year ago!

And, that is how I joined the OSHM batch of 1988-90.

Well, the learnings I would encourage here are:

Failures happen… They must encourage and exhort you to do better. Look at ways to convert failures into success. Many of us may achieve success without going through the failure stage and this is dangerous as it does not prepare us for the real world. Popular belief says that ‘failure is bad.’ You need to redefine this for your situation.

Analyse failure. Do not simply disregard it, as it could happen again in a different form unless you are able to fathom the reason for it.

Hard work, hard work, hard work. There is no better formula for success.

Focus on what you want to achieve. Keep your focus constant. Do not say ‘I will try this and if it works – well and good, else I will do something else.’

Without passion for what you want to achieve, you are like an empty vessel. Aspire for something by design and not by default.

For Gen Z who has passed out this year from their catering schools, it is indeed a trying time. Many of you are waiting for the appointment letters you were promised during hotel selections done pre Covid-19, and many are still sitting out waiting for employment.

This is not your personal failure… it is the environment that has played a trick on you. Instead of rueing your luck, look at how you could use this time to upskill yourself or possibly join an organisation as a trainee instead of an employee – for the experience.

Create your future instead of waiting for the future to create you.

Covid-19 has busted hotel pricing myths even as we are in the worst performing year for hotels in a century. This pandemic is nothing like 9-11 or the 2008 global financial crisis – Nor even India’s demonetization or GST implementation!

As a result, corporate travel, leisure (inbound, outbound, domestic), heritage, adventure, MICE, religious, spiritual events are all smitten. Also, the same holds for upcoming high-value niche tourism products. Culinary, Wellness, Sea & River Cruises, Glamping, Rafting, Sports, Wildlife, Agritourism, and many more are all affected.

The harsh reality of Covid-19 has busted a few hotel pricing myths:

1. “Our brand image will take a beating if we offer lower rates.”

   We (the industry) are now on a survival mode. Your guest will not necessarily perceive lower rates to equate with a lower quality. Consequently, market perception during such extreme times will not necessarily define rates. Aspiring travellers are looking for a deal right now and hence being cautious with their money. This is even more relevant for independent and boutique hotels that have spent millions building a brand and a following. Therefore, give guests a chance to experience your product for the first time or as returning guests. Besides, their money will help your cash flow. That is how global recovery starts… one room at a time!

2. “Sub-optimal rates will adversely affect the quality of our guests.”

   Millions have lost their jobs in 2020, thanks to the pandemic. Since mid-March, the impact on organised and unorganised tourism has been severe. The result is a very high unemployment rate in the industry. These are numbers not seen since the Great Depression (1929-33). There is a very good chance the same people who paid a high rate at your hotel pre-pandemic are now under or unemployed. So, are the same people now undesirable because they are financially stressed and clawing their way back up? Why would you not want to get them back at a lower rate for now? After all, they are the same demographic, but with a reduced propensity to spend.

3. “Lower rates will lead to a decline in product quality.”

   In today’s times, this is a misnomer. Without yielding on quality, hotels are now learning to trim costs more effectively. Hence, there is no need to sacrifice quality to match the drop in ARR.

4. “If we lower rates now, it will take years to rebuild our ARR.” 

   In light of the current life-changing pandemic, this does not apply. The world economy has come apart this year. Also, people are still severely travel-restricted. As hoteliers, we must reflect this in our dynamic pricing. Concentrate on occupancy over ARR from the RevPAR perspective for the nonce and therein fill your rooms. You may subsequently pull up your rates when the pent-up demand returns. The same applies to RFP rates – hence a proactive approach to negotiated rates during tough times is the need of the hour.

Based on market conditions, airlines have always relied on massively varying rates. So why shouldn’t hotels do it too?

This article has appeared in TravelDailyMedia.com September 2020