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Hotels Can Raise Sales In Soft Economy

Hotels Can Raise Sales In Soft Economy
Friday, October 11, 2002

By: Danny Yap

Despite a soft economy, hotels can expect a 10% to 20% increase in sales by adopting better management, said Value Hospitality Management Sdn Bhd (VHM) group managing director Dennis Tan.

The hotel turnaround specialist has successfully managed several ailing hotels to profitability within a period of six months and all hotels managed by the group have not only made profits, but have surpassed industry average figures.

"We can improve the profits of a 4-star 200 room hotel by RM1mil in a year with proper management," he said in an interview with Star Business in Kuala Lumpur.

Citing an example, Tan said: "We took over a hotel in Sabah in May 2000 and within six months profits had improved by RM150,000 per month before the VHM group took over its management.

Tan said that in a slow economy many hotels struggled and had 50% to 55% occupancy rate but there were ways to improve sales and improve service by right-sizing staff numbers through multi-tasking and training to reduce operational costs.

"In some hotels, we have managed to reduce the number of staff by almost 50% while improving on service," he said, adding that quality of service was very important in the service industry and required the management and staffs to be hands on irrespective of their positions.

Tan also said it was necessary to dissect each section of the hotel's business to look at ways to improve sales, adding that the banquet hall, the restaurants in the hotel and pub were all profit centres.

As the country's sole hotel turnaround speacilist, Tan said VHM employed over 500 personnel in six properties.

Established in 1990, the group now manages Beverly Hotel in Bintulu, Beverly Hotel in Kota Kinabalu, Value Inn Klang in Selangor, Value Inn in Kuala Lumpur, Prescott Hotel in Bongawan, Sabah, and Prescott Hotel in Bukit Mertajam.

"We have outperformed the market due to our pragmatic approach in managing hotels," Tan said.

 
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