The hotel business plan – why it must die (and soon)

Bill Barnett, managing director of C9 Hotelworks Company, explains why hotel managers should “kill the annual business plan”.

As I madly type away on the keyboard of my MacBook Pro, thousands of dumbstruck hoteliers across the world are slaving away in a blurring succession of days and nights in the mindless pursuit of completing an ignominious document known as The Hotel Business Plan. It’s Friday and I’m over-caffeinated, so hang on tight. Wait, I can hear my heart beating fast… or is that a gang of unruly wild cats on the roof of my office? Never mind. 

Every great religion in the world has a voluminous written tome aimed at spelling out in truly arcane, absurd, and most often monotonous overtones why they are the true one and only el supremo. These are fanatical spiritual guidebooks that expect unquestioning followers to simply take instructions and question nothing. They are in essence literary lobotomies. 

Global hotel chains over the past few decades of meteoric growth have taken on a similar game plan, recruiting unquestioning disciples, racking up bureaucratic organisational charts, and enslaving hotel owners under as doctrine of utilitarian standardisation. The entire process has become one of abject objectification (nice eh?). 

Perhaps one of the leading examples of this dumbing-down process to the lowest-common denominator is the tortuous exercise of compiling an annual business plan. Essentially, as much of 25 per cent (or in many cases more), of each year is spent creating a plan for the next year based on past events. It’s the equivalent of trying to make your shiny car go faster, as you take your belt to the nearest horse and awkwardly bludgeon them into a doomed forward sprint. 

In days past you could peek way up high onto a general manager’s top bookshelf and there somewhere at the back, gathering dust would be an enormous brick-like book that was of no practical use whatsoever. Today, we have things like The Cloud, and if there is such a thing as digital dust, baby this is where you’d find it’s cosmic twin. 

I am not a total idiot and understand the need for standing in line, order, and rules. Yet, at the end of the day, these cannot be unquestioned or in many cases better ideas sought. And yet, year in and year out, the massive waste of time spent on business plans remains an industry obsession by the messianic cult of hoteldom. 

In perhaps the most bizarre circumstances amidst the catastrophic backdrop of Covid-19 and a global pandemic, dutiful hoteliers are shifting into zombie-mode and creating a 2021 yearbook that they, their executive teams and almost everyone knows is entirely meaningless. It’s a bit like preparing for the breakfast buffet the night before, as the Titanic sinks rapidly into those icy waters of oblivion. 

Today the epidemic tasks that remove hotel managers from their immediate tasks of survival are representative of a tragically flawed and broken system that is a day late and a dollar short. For general managers, the time spent on group generated meetings, reports, countless forecasts, and ultimately the doomed business plan whilst the hotel owner is fighting for survival is pure and simple nonsense. 

What I’d advocate is the time has come to tear the house down and kill the annual business plan. Create strategic rolling cash flow forecasts as lead documents. Forget the typical STR comp set of hotels that are only intended as a self-congratulatory pat on the back for those at the top. Sadly this mentality ignores the multiple non-STR hotels that lay a stone’s throw away. Or what about those restaurants, bars, and other businesses that compete with you? 

The tragic reality is that hotel owners build and invest in properties that extend way beyond rooms, but the only true measurement of success is a pre-determined set of indicative rooms in chain hotels. It’s a rigged system that supports the notion that managers lack the brains or skill to manage a business and all that’s left on the table are enablers. We’ve lost our entrepreneurship willpower and ingenuity. What happened to DIY? Or have the hotel brand police imprisoned our collective soul? 

My thoughts down the raging river of 2020 refocuses on the need for absolute disruption of hospitality’s broken infrastructure. One that places the ineffectual bureaucracy where it belongs – into the nearest dumpster. Hotel chains have to learn to act as ongoing business concerns, to live up to their promises to serve hotel owners’ interests and to foster and promote managers who touch, feel, and act as business leaders, day in and day out. 

Someday in the very far future after our civilisation has faded – as new generations wander about the world finding vacuous empty hotels in not unlike the way explorers landed on Easter Island and questioned those massive stone image – they will come upon these large dusty copious volumes of useless information that proudly tout a headline title The Hotel Business Plan and wonder why? I know I do, what about you?

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