A practical guide for hotel chief executives to measure up

(GA, Nov. 2015)

Source: Industry Survey by G. Angelini including his own 10 years’ experience as CEO.

The Chief Executive is the highest position within a corporate hotel organisation and normally the role/title is given to a senior and experienced individual. This role can have various titles including; Chief Executive Officer (CEO), or President, or Managing Director (MD), or Chairman if they have direct operation responsibility. There are also cases when two titles are combined like CEO & MD.

A recent top 50-hotel-CEO’s study shows that the present median shelf-life of a Chief Executive in the industry is between 6-7 years, although there is a wide range with some not staying long and others lasting a lot longer. Average age is about 55, ranging from around 43 to 64 years old.

The role of the Chief Executive can vary from one company to another based on the organisation’s size and structure and also based on the direct involvement of the Board of Directors/major Shareholders if they are hands-on or are removed from the day to day.

Each company is different and no one-size fits all. Each company has its own internal politics…..

More than ever, the Board of Directors and Shareholders are maintaining a close eye on the Chief Executives performance and are becoming impatient with slower than expected growth and profits. Those who cannot deliver quickly enough will pay the price.

A very important question: Do Chief Executives know what their job should be and what are the expectations? This is very crucial as the hotel business is more complex than what it appears to be.

In this fast evolving business environment, such rate of change is clearly outpacing most leaders’ ability to learn and “unlearn”.

A successful Chief Executive needs to know how to measure their success and also know how to measure the success of the company growth, profitability and in particular, the shareholders expectations.

The Ultimate Objective of the Chief Executive is meeting the needs of employees, customers, investors, community, the law and positioning the company/brand at the forefront of the industry. And of course, improving organisational capabilities to drive better business results.

In addition to being a Leader who LEADS, the key attributes of a successful Chief Executive are; personality, passion, communication, delegation, effective listener, team player, honesty, achiever and be human….

Chief Executive’s Direct Responsibilities (Those that cannot be delegated);

·         Liaison and communication with the Board of Directors (upwards management).

·         Setting of company’s strategy, directions and culture.

·         Putting in place, and maintaining, an aligned and agile team of reliable professionals.

·         Availability of funds and financing.

·         Focus on company’s priorities and allocation of capital to it.

·         Define and put in place a clear delegation of authority and process improvements.

·         Brand equity and image. Product and quality standards.

·         YOY performance & profitability, IRR and ROI.

·         Sustainable growth and expansion, new destinations/locations and reliable partners.

The BreadAndButter of Hotel Business This is team work and accountability, (downwards management);

In addition to their own direct responsibility, the Chief Executive must be directly involved in the management of the hotel business, marketing and performance in particular and set clear measurable targets;

–          Efficiency of company’s systems and volume of business generated for the group/ company and for each individual property/unit.

–          Customers’ and employees loyalty and satisfaction.

–          Value-based management, pricing and services.

–          Source of business, segmentations, distribution channels, OTA’s etc.

–          Volume of repeat business, length of stay and customers’ acquisition.

–          RGI and market share/position for company and for each unit.

–          YOY RevPAR and GOP growth plus the accuracy of the short-medium-long term forecasting and foresee the future.

–          Innovations, technology, new processes, use of data, revenue management, consumer-buying behavior.

–          New Industry trends, competition, strengths, weakness and competitive edge.

–          Social media strategies and reviews.

–          Productivity and operational excellence in a labor intensive and perishable business.

–          Continuous product improvement and maintenance.

–          In particular, embrace the fact that employee engagement is the most powering force in this business.

And most important, accept that no one is immune to disruption and no other ways than trying new things, reimagining the business module.

Knowledge, Requirements and Practices. Here are some practical and behavioral tips;

Champion a common and accept vision that leads to victory.

Hold yourself to a higher standard of rigor, discipline, accountability and transparency in order to win.

Passion to lead and provide leadership. Avoid bureaucracy and silos.

Challenge everything and lead people from the front and don’t follow them from behind.

Mastering how a hotel company ensures sustainability and continues growth.

Embrace the fact that in the hotel business anything can be improved.

Hold the course, brave the winds of changes and the ups and the downs. Prepare well for low seasonality, slow periods and cycles.

Learn from past mistakes and do not repeat them. Those who repeat mistakes are accountable/disciplined.

Inspiring innovations, leading changes/improvements and encourage risks taking.

Don’t waste time and resources on refining initiatives but invest in reimagining the business and most important yourself.

What it takes to raise the organisation to next level?

Be big and bold. Accept that everything starts from dreams, big dreams that excites you.

Maintain good corporate governance at all times.

Practice balanced upward, downward and sideways management.

Be Prepared;

In addition of knowing your job, you have to know the jobs of those you lead.

Do your homework, understand the goals, priorities and the process of planning.

No guesswork allowed. Be aware of the subordinates attitude “Either you manage me or I manage you….”

Accept that real opportunities will always exist and it will take an aligned, agile and innovative organisation to seize them and improve results/performance.

Attract, train, retain top talent at all levels and develop the next generation of leaders.

Character Traits;

Honor your words and promises in order not to lose reputation and power.

Breaking barriers between yourself and employees.

Celebrate/share success and reflect on failures.

Accept own limitations and shortcomings (no one is perfect), do the right thing and not the things that feels right.

Pitfalls (Facts of life….);

Is the position of Chief Executive “Pity or Envy”?

How many people within the organisation are wanting the Chief Executive to falter and make dumb moves? This exists in most organisations.

Must remember that power tends to change and corrupt a person. Where do you stand?

Arrogance and overconfidence are major pitfalls. No one is going to follow someone who is arrogant. Have you become arrogant and can you measure it?

Easy to forget what is like to be a good employee and what is like having a demanding boss. Do you remember when you were a simple/junior employee?

False belief that all decisions/actions taken lead to success. Yes keep dreaming…… mistakes are made, as an average, 3-4 actions taken out of 10 are wrong. Can you measure how many mistakes are you making on average?

Failure to benchmark performance with the best in class. Extremely dangerous if this is done intentionally in order to avoid negative reactions from the Board/Shareholders.

Pointing fingers and not taking responsibility for poor decisions taken by you. Accept your own failures and make repairs.

Becoming a corporate “drone” or even worse…..a corporate “whore”….

(Nothing new here as many Chief Executives have those tendency, it comes with the job).


Highly recommended for Chief Executives to have a solid mentor. A person who does not have their own agenda…..for you to consult with and get advice. A person who can tell you where/when you “screwed-up” and if you have become a first class “jerk”….. Don’t be afraid to ask for the facts and reality. A role model person is not sufficient, get a mentor.

Expectations and Constant Reminders;

Is the Chief Executive pay and performance aligned?

From the EMPLOYEES; why should anyone be led by you?

From the CUSTOMERS; prove to us why we should stay in your hotels and what will you do to make our travels easier?

From the BOARD/SHAREHOLDERS; why should we allocate our capitals towards your company? And what would be our “total shareholders return?” (Capital gains and dividends).