This isn't new but is worth repeating. At the Asian American Hotel Owners Association's annual trade show and conference, Morse shared his insights on what it takes to be successful in the hotel industry. One key piece of advice he offered was to focus on profits rather than revenues.
As the chairman and CEO of MCR Development, Tyler Morse knows a thing or two about being a successful hotel owner-operator. With a $4 billion portfolio of 150 hotels and 22,000 guest rooms in 37 states and 100 cities, MCR is the fourth-largest hotel owner-operator in the U.S. and employs 5,000 people.
There are a few reasons why hotel owners should prioritize profits over revenues.
Profits are what allow a business to stay afloat and continue operating. Revenues are important, but they don't necessarily equate to profits. In fact, it's possible for a business to have high revenues but low profits if it's not managing its expenses effectively. By focusing on profits, hotel owners can ensure that their businesses are financially healthy and able to weather any storms that may come their way.
Focusing on profits allows hotel owners to make strategic investments in their businesses. This could include things like upgrading guest rooms, improving amenities, or investing in new technology. These investments can help to attract more guests and increase profits in the long run.
Morse also advises hotel owners to increase their rates and do so with confidence. This can be a tough decision, as hotel owners don't want to price themselves out of the market. However, if a hotel's rates are too low, it can be difficult to generate profits. By carefully considering the value that their hotels offer and the demand for rooms in their market, hotel owners can determine the right price point for their properties.
Another piece of advice from Morse is to stop wasting money. This means finding ways to streamline operations and eliminate unnecessary expenses. For example, hotel owners can negotiate better rates with suppliers, invest in energy-efficient appliances and lighting, and use smart technology to automate tasks and reduce labor costs.
Morse advises hotel owners to remember that "fancy" hotels are not necessarily better hotels. While luxury amenities may be appealing to some guests, they also come with a higher price tag. Hotel owners should focus on providing a comfortable and enjoyable experience for their guests, rather than trying to compete with high-end properties.
To ensure the financial health and long-term success of their businesses, hotel owners should focus on profits rather than revenues. By increasing rates with confidence, cutting unnecessary expenses, and investing in strategic improvements (like technology), hotel owners can boost their profits and create a better experience for their guests.