COPING WITH ECONOMIC MELTDOWN

COPING WITH ECONOMIC MELTDOWN

Economic global meltdown has severe trickled down effects even on small scale enterprises and has come to stay; in the face of government helplessness at protecting the private sector, entrepreneurs must therefore look beyond government fiscal policies in ameliorating the negative impact on their business. The hospitality industry is not an exemption and must start looking at ingenious way of staying afloat in this financial downpour.

The availability of ready cash from daily revenue tends to give a false sense of financial security in the hotels. Recurrent and fixed expenditures are easily swallowed by income from the rooms and food and beverage outlets as soon as they appear thereby giving owners the impetus to dip hand into the account for private reasons. The hotels need to make provision for depreciation of assets that wear out without notice.

This is the way it works. The first two years of hotel inception are tricky, errors strewn and unpredictable. If one does not take advantage of the newness and cut a deep slice of the market, you may never recover to tell the story. After the second year, your expenditure graph starts taking an upward ascent while your revenue drive may either assume a lateral position or a steady descent depending on your knowledge of the industry, internal management expertise and the quality of your human resources.
On the balance of probability, to stay afloat in a sinking economy you ought to put the followings in proper perspective.

Communicating to all the team members about the financial position of the hotel viz z viz the prevalent micro economy of the country is vital in the face of the fact that they are likely to bear the full brunt of a policy burnt out. Again, getting your staff involved in a sincere strategy session may bring forward innovative ideas that may just be the catalyst for your survival.

It will or may come down to cost cutting and everybody must be prepared for a showdown. Sales and marketing must be everyone’s bit, effective service delivery will eliminate waste, quality service delivery will guarantee patronage, management staff must be ready to take pay cut and the general staff must agree to a pact no matter how unsavory.

Not too many people will connect with this article, I actually expect a backlash! It is too gory to contemplate but the earlier you prepare for the harsh realities of today’s economy and its stinging effects the better.

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