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When Disaster Strikes - Hoteliers Loose Their Jobs.
By René J.M. Schillings
Wednesday, 23rd July 2014
 
Interesting Feature by TOP Hoteliers: Whenever major calamities occur in the world and they hit the headlines of the news, tourists and business travelers may change their travel plans and avoid the destination;

As a result, hotels may suffer from an immediate drop in occupancy, and that can sometimes be for a prolonged or uncertain amount of time. 

Often it is so that only a small part of a country is affected by an event, but the general media brings the story so hyped and big that it may affect a whole region.

A terrorist bomb in Jakarta may cause hotels in Bali to be empty for months, river floods in Hainan that take place around Haikou made Sanya loose occupancy, a civil war in Syria put investment in hotels and the general business in Lebanon slowed down, and the recent Coup d’Etat in Thailand did not only affect Bangkok but all the resorts in various locations.

When these things happen, it is not that tourists or business travelers are in real danger but they stay away and the real victims can be the hotel employees who have to face staff cuts, unpaid leaves, termination- or non-renewal of contracts.

As a recruitment agency we quite often see the effects of such event in the days & weeks as the event unfolds. We can be flooded within a short period of time with resumes from a certain location, often from the Expatriate Hoteliers there, who if not already outright having lost their jobs, fearing they will so soon.

The cost-saving measures a hotel would take when occupancy drops dramatically and unexpectedly are in itself a normal reaction to a real threat to the business.

The typical reaction by hotels is the close of certain outlets, implement energy saving measures (closing complete floors or wings, switch of colorful neon-signs that mark the building) and looking at the labour force to see where savings can be made. Assuming that a lower occupancy requires less manpower on the floor, the first measures would be to let staff take up outstanding leave, or even unpaid leave.

Those who have just joined the hotel and still under probation are not confirmed and let go, and a hiring stop is implemented. Unfortunately, such events are also used to cut cost not only for the time-being, but for a longer time, or indefinitely.

Reducing the number of expatriates by advising them to move on to other properties (worldwide) often leads them being replaced by local management, who is not going to step back when the crisis is over, and combining certain manager & department head roles into 1 person, like replacing the Executive Chef and Director of Food & Beverage by a  “Chef & B’, or having Room Service being taken care by the general Telephone Center and serviced by the all-day-dining restaurant are examples of measures that are once implemented, but then not turned back, when business is back in full-swing.

This puts of course an ever increasing work load on management, and the efficiency credits earned during a crisis are lost later by loss of efficiency and ability to maximize revenues when business is back as normal.

But a greater concern is perhaps the loss of talents when employees are facing an end to their contract, and the hotel company can not assist them to move to another hotel property with the same group, in different locations. Even if that would be a temporary measure.

Unfortunately, most hotel companies work with management contracts, therefore the staff of the hotel is the owners’ responsibility and cost. If the job ceases to be at 1 property or location, the hotel management company has no financial means to absorb the salaries of their valuable managers to cover even a 1-6 months period, when there maybe a temporary lack of business.

When it comes to relocating managers to other countries, it is totally dependent on the available budgets by the hotels there, if managers from other properties can be absorbed. And that is just according to the normal vacancies that may be available there, as usual and not in a spirit of solidarity among a group of hotels to (temporarily) accommodate their ‘colleagues’ till the crisis or slow business passes over. 

For an expatriate it can mean that when termination of contract follows due to low business as result of some recent event, the hotel company can not deliver the promise to seek a placement elsewhere, even when that hotel company is in general expanding fast, in general always hiring new talents, and internally and externally always would want to promote the internal transfer and promotion of their own employees.

Such events and crisis do not only ring home the volatile business Tourism & Travel can be, as prone to ups- and downs as per where travelers choose to go and stay in hotels, or chose to stay away, but it also brings to the surface the weakness of being employed by a ‘worldwide’ company that in fact is dependant on local owners to pay the salaries of almost all the employees.

As recruiters we are often faced with this dilemma. We are being contacted by hoteliers who had good employment, a good career and principle loyal to the hotel company they work for. Now they are faced with a lay-off and sometimes faced with a move to a place they totally do not want to go to.

We also believe that there is no point to relocate somebody with a certain experience in 1 region to a totally different location, just for the sake of them having a job.

Especially when that move is deemed to be long-term, i.e. for a next 1-2 year contract. Often these applicants contact us for a job in the same country / location they are in, which is of course wishful thinking because at that moment no hotel there is hiring, and there are more people available on the market, due to the effects of cost-cutting measures.

We may have jobs for them elsewhere which they could technically fit the role for, and the salaries are in line with the previous earned income but in all other aspects this move would normally not be made, if there would not be this situation.

And as a recruiter, as well as for the hiring hotel, that would be a risky choice of employee. Hotel companies do loose valuable people this way, who find that their loyalty to the hotel company is not lived up to, now that cash counts and not their ability and former contribution to the success of the hotel management company.

Perhaps hotel management companies should have a disaster & crisis fund that allows them to temporarily top up the loss in salaries of some of their key managers to stay either in the places where the business is low, but the situation not unsafe, or to temporary move them to other properties, or even a Regional Head Office where the salary budget would otherwise not be sufficient to accommodate this manager.

Hotel companies have to realize that most hotel managers apart from their loyalty to the company and their love for the hotel industry also have responsibilities for families / dependants, and for the love of them can not always just be moved wherever there is work, with that same company.

If such move it temporary, with a prospect to return to where they were when business is back, hoteliers and their families could bridge a period of several months, up-to-1 year perhaps. The prospect of uncertainty or an undesired move for longer than 1 year often leads to the loss of that employee.

In the overall situation where all hotel companies in Asia in general struggle to have long-term committed talents to stay with them, so they can continue to staff their own hotels and manage the expansion with their own people, the laying off, of key managers when disaster strikes is an unfortunate timely measure that is penny-wise but pound-foolish.

As a recruitment agency we have also often witnessed cases where at some point all key managers, especially the expatriates had to leave, where replaced by local management, and than within 1-2 years the hotels were back to hiring new (expatriate) managers again, when the business is back in full-force, competition for the customer is fierce again, but the hotels have suffered a set-back in quality and service, and often in profitability as well, due to the sending away of the key managers that were needed at all times, but could temporarily not be afforded by the level of occupancy the hotel suffered from during a crisis.

René J.M. Schillings, a Dutch National, is the Managing Director of TOP Hoteliers, the first specialized hospitality recruitment agency to open offices in the People’s Republic of China (in 2004). Based in Hong Kong he devotes most of his time managing the 3 offices in Hong Kong, Shenzhen and Beijing, where his team of consultants recruit hotel managers for all major international and some local hotel companies in China. His company was very early to recognize the need for local talent, Mandarin speaking expatriates and China experienced expatriates. His knowledge of the China Hotel Industry stems from his career as Hotelier in China that began in 1997. He has a BA in Hotel Management from Stenden University, a.k.a Hotel Management School Leeuwarden, The Netherlands and an MA in International Tourism & Leisure Studies from Metropolitan University in London, England. He is a keen observer of industry trends and has published numerous articles on HR issues in hospitality in China & Asia. Working in China, Hong Kong & Korea since the late 1990’s, René has lived in Hong Kong from 2005 to 2012 and resides since 2013 in Thailand with his wife and 2 children.

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