The Official Magazine of the Alberta Hotel and Lodging Association
Fall 2 0 1 1
increasing meeting & convention business • • • •
Forec ast ing Cont rolling Food Cost s M easured M arket ing S howc asing Art t o At t rac t Gu ests
Don’t get left out. ENMAX Energy Corporation and the AHLA are proud to offer the ENMAX Energy / AHLA Power Program. Over 390 AHLA members are participating in this program and taking advantage of competitive electricity rates.
Members benefit from: • Group power pricing • Cost certainty in a volatile energy market
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Sign up now to qualify for the December group power purchase!
1-888-436-6112 Contact the AHLA prior to October 31, 2011 to be included.
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this issue 6 INCREASING MEETING & CONVENTION BUSINESS
Glad to hear that business travel is on the rise? So are we. Alberta destinations offer beautiful surroundings, great value, and attractive venues for conventions and meetings of all sizes. Cover photo courtesy of the Shaw Conference Centre, Edmonton
in every issue 4 5 14 21 27
Chairman’s Report President & CEO’s Message Travel Alberta Member Value Program Review Names in the News
10 15 16
18 22 28
Let’s Talk Gambling Sawridge Inn & Conference Centre Slave Lake Showcasing Art to Attract Guests Controlling Food Costs
Official magazine of
INSPIRING SERVICE, GROWING VALUE
AHLA 2707 Ellwood Drive, Edmonton AB, T6X 0P7 Toll Free: 1.888.436.6112 www.ahla.ca CHAIR OF THE BOARD Mike Shymka FIRST VICE CHAIR Barry Zwueste VICE CHAIR Thomas Barknowitz VICE CHAIR Michael Sieger PAST CHAIR Doug Shandro PRESIDENT & CEO Dave Kaiser, CHA DIRECTORS NORTH Steven James Tony Verbisky Steven Watters DIRECTORS CENTRAL Perry Batke JoAnn Kirkland Tina Tobin DIRECTORS SOUTH Joseph Clohessy Mark Hope Perry Wilford DIRECTOR, CAMPGROUNDS Chris Eklof Alberta Hospitality is published quarterly by:
T 604-574-4577 1-800-667-0955 F 604-574-2196 firstname.lastname@example.org www.emcmarketing.com Publisher & Editor - Joyce Hayne Copy Editor - Debbie Minke Design & Layout - Krysta Furioso
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by Mike Shymka
Tourism is improving, but it is still vulnerable to consumer sentiment as well as persistent stock market volatility. Interest rates are likely to remain low for the short to medium term, but cash will still be restricted. Given these circumstances, the hotel sector will have difficulty finding additional financial capital. Any new hotel construction will require larger equity positions. As a result, major hotel renovations will be difficult to achieve over this period. We may simply have to get by without major upgrades to our physical plants. Conversely, we are going to have to pay a lot more attention to our human capital – perhaps our most valuable asset! We must create great workplaces for our employees and offer careers that are rewarding and meaningful. As employers, we need to determine what drives our people to succeed, and tap into this to increase their satisfaction and desire to serve our guests. In our hotels, we need to build a culture that is service oriented, as quality of service is still the most important factor in a consumer’s choice of hotel. I recently read a newsletter from “Humour at Work” guru Michael Kerr, where he shared his impressions of a recent trip to Ireland: “The inns and restaurants that impressed us did so by charming the socks off us. So much so, that it occurred to me that the elusive quality known as charm could and should be seen as a huge competitive advantage. Charm, we soon discovered, often helped us overlook the odd service lapse or other minor faults that a customer might not put up with. We all know individuals who amass goodwill capital simply because they’re so darned charming. The same
principle applies to business. So look for opportunities to charm the socks off of your customers.” Kerr’s comments gave me a “light bulb” moment - an old fashioned attribute like charm makes customers feel welcome and increases sales. Charm guests not just by providing good service, but by going that extra mile and letting your personality come through to provide a great experience. That is what our industry is all about. When your staff understand that both guests and employers value them personally, morale will improve in addition to a heightened level of engagement and purpose. It may seem overly simple, but in an environment where we cannot pour money into our properties, we can launch a charm offensive to attract and keep our customers. Fortunately, it doesn’t cost a thing. At our past conventions, the Disney Institute and the Hard Rock Cafe have shown AHLA members how the little extras can delight our customers. This starts with a mission, values, and creating a culture that appeals to guests and staff alike. The AHLA’s Human Resource Development team can help you to create this environment at your property. The AHLA’s Annual Trade Show & Convention returns to Jasper April 15-17, 2012. The convention is a great opportunity for the association to charm you, our members, by providing great speakers and sessions, superb entertainment, and a wonderful place to mix with peers and discuss the state of our industry. Come and let us charm the socks off you!
PRESIDENT & CEO’S MESSAGE
Our Industry Voice in Ottawa This summer the Hotel Association of Canada (HAC) collaborated with its provincial hotel association and corporate members on a grassroots campaign aimed at communicating the critical issues of our industry to every Member of Parliament. As part of this effort, the AHLA identified industry leaders in all federal ridings in Alberta, and encouraged them to meet with their MP and to provide a brief follow-up report to the HAC. Following is a summary of the key messages that were developed for MPs in Alberta:
Putting Canada back in the Top 10 would bring 5.7 million more visitors, $5.2 billion more in revenue and 46,900 more jobs. It would generate $1.5 billion in new taxes. To achieve this, our industry needs: 1. An improved visa system and more competitive air access; and 2. Sustained funding for the Canadian Tourism Commission. Alberta’s Tourism Industry As of May 2011, in Alberta:
Canada’s Tourism Industry
• The provincial unemployment rate is 5.4%.
• While the global tourism pie is getting bigger, Canada’s share is shrinking.
• The unemployment rate for the accom modation and foodservice industry is 4.4% vs. 7.1% in May 2010.
In 2000, Canada was the 7th most popular destination in the world, with a travel deficit of just over $1 billion. Today we are in 15th place and the travel deficit is $13 billion.
• From 2002 - 2009, almost all countries posted international tourist arrival gains. Canada did not.
• The unemployment rate for Banff, Jasper, and the mountain parks is 3.2% vs. 5.4% May 2010. • The most acute shortages for the hotel and lodging industry are for semi-skilled occupations such as housekeeping room attendants, front desk agents, and food & beverage servers.
by Dave Kaiser
As economic activity in Alberta returns to pre-2008 levels and the provincial labour market tightens, access to foreign labour is critical. To address immediate concerns, we recommend: 1. Reinstating the Expedited Labour Market Opinion (E-LMO) process for Alberta; 2. Reinstating the 2-year Temporary Foreign Worker work permit; 3. Using the AHLA’s annual wage survey as a more accurate guide for determining prevailing wage rates of LMOs; and 4. Increasing the number of provincial nominee (PN) certificates allocated to our industry in Alberta, creating a permanent solution that will reduce the structural labour gap for semi-skilled occupations. We are optimistic that our industry voice in Ottawa will be strengthened when federal MPs across the country receive a clear and consistent message in their home ridings. We look forward to serving you!
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INCREASING MEETING & CONVENTION BUSINESS Making Your Property a Destination of Choice by Alex Van Tol
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Photo courtesy of the Calgary TELUS Convention Centre
INCREASING MEETING & CONVENTION BUSINESS
Photo courtesy of the Shaw Conference Centre, Edmonton
lad to hear that business travel is on the rise? So are we. Alberta destinations offer beautiful surroundings, great value, and attractive venues for conventions and meetings of all sizes.
Calgary’s TELUS Convention Centre saw its annual number of events dip by 13% from 2009 to 2010 and its number of attendees decrease from 250,000 to 211,000 for the same period. However, business looks good for next year “We have extremely strong advance bookings in 2012 and trending the same in 2013,” notes TELUS Convention Centre Executive Director Dave Sclanders, “so we are encouraged.” Farther north, Edmonton’s meeting and convention industry expects modest growth in 2011 following recent years’ challenging conditions. “Based on 2010 results, we are starting to see momentum coming back into future bookings. The industry is projecting modest growth in 2011,” says Ken Fiske, vice president of tourism and special events for the Edmonton Economic Development Corporation. The Shaw Conference Centre’s bookings have been operating close to maximum for a number of months, which is a good sign. Going forward, Edmonton wants to increase the number of delegates who choose to explore the city before and after a conference. The industry continues to work with local institutions and professional associations to target event planners in marketing Edmonton as the ideal event destination. According to Fiske, “major Edmonton employers, as well as national and international professional associations, contribute to the success of the city’s meetings and events industry.” This is all the more reason for you to examine your strategies for attracting meeting and convention business.
The Hustle Begins Everyone’s still looking at the bottom line, which includes guestroom rates and F&B costs. “Incentives for site visits also play a huge role for meeting planners who conduct mandatory site inspections,” explains Leanne Calderwood, director of global accounts for HelmsBriscoe. “If the hotel creates a very welcoming site inspection experience, that carries a lot of weight in the final decision making.” Consider comping accommodations and/or flights to the region. Greg Moon, general manager of the Lethbridge Lodge Hotel & Conference Centre describes: “We do a meetand-greet, tour the city with them, show them our facilities, and show how we can get their conference done most expeditiously.” Be sure to take care of the little details, advises Calderwood. “If the meeting planner can get a good sense of how well their delegates are going to be treated once onsite, they are more likely to sign on with that property.”
If the hotel creates a very welcoming site inspection experience, that carries a lot of weight in the final decision making.
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INCREASING MEETING & CONVENTION BUSINESS
Once the planners are in your space, face-to-face interaction is vital. “You can do all the work you want over the phone, but face-to-face [communication] is what converts your lead into business,” notes Moon. Vito Curalli, Hilton’s managing director of sales for Canada, Latin America & International, agrees that while email is good for staying in touch, it’s essential to make personal contact. “What we’re saying is - let’s get back out there, sit down, explain who we are, explain what we’ve got to offer, and how we can make their business better,” he elaborates. Lastly, task your sales force to get a handle on the client’s overall corporate incentive and corporate travel spending so they can provide competitive pricing for the entire business - not just a one-off meeting, recommends Tanya Racz, president - Canada, of the Global Business Travel Association. Mind Your Markets We’ve all watched the bottom fall out of the North American market and we realize it’s time to focus on attracting convention and meeting business from offshore as well as nationally. “Business has come back after the recession,” observes Curalli. “People are starting to meet more and more. I look at the airlines as being a benchmark,” he explains. “Their load factors are going up. Our customers are out travelling because they’re out there seeing their customers. The more they get out, the more activity they generate in terms of regional meetings and sales calls.” An increasing number of meeting planners are coming in from overseas. Hyatt, being a worldwide chain, maintains a worldwide sales fleet. But even at its Vancouver location, the company has a sales manager who travels to Asia regularly to attend trade shows and woo accounts in China, Japan, and increasingly, India.
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INCREASING MEETING & CONVENTION BUSINESS
Don’t have someone to fly over? Pound the pavement and create those rich relationships that will lead to repeat business. Have your sales team work hard to nurture repeat business, but save some energy for drumming up new accounts too. Get your reps out to the trade shows to show their faces so the sales team and your property become recognizable. “One part of it is relationship building,” states Reto Nigg, director of sales and marketing at the Delta Bow Valley in Calgary, “and Calgary is a relationship market. The other part is being out there and…being top of mind.” Monitor your digital community too. Be aware of ratings for group and business travel; savvy travellers are always comparing you to your competition. Keep track of your rankings, because that’s an increasingly important part of the decision-making process. Work With Your Local Tourism Board The first step in attracting more convention and meeting business is to get the group to decide on the destination which is why it’s essential that you work with your tourism association to flaunt your region’s assets. “Hotels are not only competing with other hotels; they are competing with other destinations for incentive and corporate business, especially from Canada,” explains Calderwood. “Working with their local CVB to create incentives and education around the destination is very important, especially when looking at flight accessibility, taxes, and other hidden costs.” All-inclusive packages and incentives can also draw meetings to the area.
“We work closely with the Chinook Country Tourist Association,” notes Moon, who’s also plugged into a group that works with Tourism Calgary. Moon and his sales team stay on top of events and economic development bids in Lethbridge, so they can put themselves front and centre as a meeting destination. After a convention has decided to make your hometown its destination, it’s up to you to offer a favourable room rate, and if needed and appropriate, upgrades and complimentary stays for meeting organizers during the site visit. It’s time to tap into convention and meeting travel and improve your bottom line. Know your clients, listen to and accommodate their wishes, and endeavour to make their stay memorable and glitch-free. Then step back and let your city and property take care of the rest.
Sweat the Small Stuff >>> Sell the things that set you apart from the crowd, such as an incredible location, an onsite nightclub, or a focus on sustainability. Hyatt Calgary’s “Meet and Be Green” program offers local foods, non-bottled water, and recycling at every turn - plus a 3% savings on the client’s master bill. >>> Emphasize the safety of your property. >>> Make the conference experience a memorable one for your guests. Remember the value of service because it’s what sets you head and shoulders apart from the rest of the crowd. >>> A simple welcome gift will go a long way. >>> Provide excellent audiovisual equipment so your clients’ meetings will go smoothly. Consider outsourcing this to a trusted expert instead of trying to handle it all yourself.
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FORECASTING Its Uses and Abuses by Tom Walker
I read an article this week that used a colour coded matrix to identify good vs. bad forecasts. The industry in question was not hospitality, but the message could apply to nearly any business. Still, when I reviewed the underlying numbers, I was struck by the limited data used to assign good to some and bad to others.
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ithout question I have seen bad forecasts. Just as certainly I have produced bad forecasts. I have also produced remarkable forecasts one year as a hotel front office manager I put together a budget forecast that missed the year’s actual occupied rooms by fewer than five occupied rooms. If I were a stock picker I’d have been giving money.cnn.com interviews on the strength of that result. Forecasting is essential in lodging and related businesses. It is also an uncertain enterprise. As anyone who has heard me speak on the subject knows, that is my polite way of saying forecasts are always wrong. Get over it - forecast as if it doesn’t matter that your most careful analysis will miss the mark. Because it doesn’t matter that you’ll be wrong. What matters is that in the long run you will be a good deal less wrong than you would be otherwise. If you choose not to diligently forecast, your error might be great enough to scuttle your business, which might lead to such professional recitations as “You want fries with that?” This article might not inoculate you from the ravages of our business doldrums, but it could help preserve you from being viewed as expendable jetsam. Forecasting matters, even though forecasting is, I’ll say it again, uncertain. Another aspect of forecasting in the lodging/ hospitality world is timing. In many cases, forecasting is done repeatedly over the same dates. So a relevant question when assessing forecast accuracy is “which forecast are we talking about?” I might have produced a forecast for tomorrow a week ago, a month ago, and three months ago. A better question than
“How accurate was my forecast?” might be “How effective were my forecasts for helping to maximize potential revenue?” Among other things, an assessment of regrets (a potential customer checks availability and doesn’t buy) and denials (the hotel declines to accept a potential booking) is useful for evaluating the extent to which control actions - length of stay and or price restrictions - maximized potential revenue. More on that would be the subject of a different article, but gathering the associated data is useful as well for forecasting purposes, as will be discussed shortly. Forecasting should be done with brutal realism. Too often, forecasts reflect what one hopes will happen rather than what is most likely to happen. Unrealistic expectations lead to inappropriate inventory controls, which in turn compromise revenue and profit potential. Overly rosy longterm forecasts produce excessive regrets and result in unnecessarily aggressive discounting as approaching dates fail to achieve the demand once anticipated. Specific Forecasting Considerations and Techniques An underlying assumption I make going forward is that you are not using one of the commercially available forecasting and optimization packages. Such tools employ sophisticated algorithms that generate forecasts dispassionately and on a regular basis. For many reasons, a significant proportion of people in lodging/hospitality must rely on their own, home-grown methods, using spreadsheets and other tools. The following is intended for that audience.
The Naïve Forecast The naïve forecast is both simple, and in many cases, as accurate as other approaches. A naïve forecast takes as its expected values the actual results from equivalent historical dates. If the first week in February last year produced x volume of realized demand by market segment and day of week, then those are the numbers to expect for the first week in February this year. Ideally, the historical demand record includes “unconstraining” data, which means regrets and denials in addition to actual consumed demand. To illustrate why, imagine a series of dates in the past whose consumed demand was comparatively weak. Perhaps the equivalent dates this year will also be weak, but suppose that a large group booking over last year’s dates either canceled or performed very poorly. Depending on the group’s size and remaining available inventory, large numbers of non-group reservation requests might have been turned away due to what at the time appeared to be a booked-to-capacity situation. Had the property not turned away so much business, consumed demand would certainly have been a good deal more robust. Another useful application of the naïve forecast is to test the value of any other method that might be employed. If I forecast using some other technique, I can measure whether my results were better or worse than if I’d simply gone with a naïve forecast.
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Moving Average A moving average forecast is another simple method and can often provide significant value. A moving average has the advantage of smoothing out unusual spikes and troughs, but by the same token it masks the real world dynamism that demand usually exhibits. Just as in the case of a naĂŻve forecast, a moving average should utilize unconstrained demand numbers to the greatest extent possible. Also, when employing a moving average, it is important to take account of such recurring patterns as seasonal shifts. When transitioning from a low or shoulder season to high season, for example, a moving average will at first understate demand. See the example on the next page for an illustration of how a moving average might work: Moving Average Forecast
...a moving average should utilize unconstrained demand numbers to the greatest extent possible.
The user selects the number of observations to be used based on experimentation. Each time a new observation is added, an old one falls away - hence the name â€œmoving averageâ€?. The result is produced by summing the observations and dividing by the number of observations. Statistical Modeling Operations research scientists would probably be displeased with the simplicity of this example, but it illustrates a technique that can deliver good results and is comparatively easy to develop. In order for the model to produce its best results, dates that were not constrained must be used. In other words, the selected dates should not have produced any denials and minimal regrets. In the example below, demand for a selected day of arrival, October 7, is measured as of a series of weeks in advance of the arrival date. Given that all demand for the date was accepted, an understanding of expected demand as of particular advance periods can be developed, then used to assess analogous future dates. Suppose a future arrival date that I expect to be similar to October 7 shows the property 65% committed as of 5 weeks in advance. The model suggests I should only have 41% already booked, so the date is 24 points higher than expected in terms of booking pace. As a forecaster I would look for reasons that the pace is so far ahead and, based on that analysis, adjust my forecast and take appropriate control actions in response.
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Bookings as of
% of Total
These options are not exhaustive. People with more advanced statistical skills might, for example, assign carefully selected numerical values to different days of the week and use regression analysis for forecasting. The approaches here, however, lend themselves to anyone with a responsibility to forecast. None of them is perfect, but perfection is virtually impossible where uncertainty is an inherent element of the exercise. Despite a forecasterâ€™s best efforts, error will always figure in the results. But in this case especially, allowing perfection to become the enemy of the good would be a grave mistake. Try different approaches to see which work best in your circumstances, then throw yourself into the process as if your success depends on it. After all, it does.
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Boosting Travel Alberta’s Support to Industry-Led Marketing Co-operative marketing support of industryled marketing projects is one of the most important and valued services provided to Alberta tourism operators and regional marketers by Travel Alberta. This year, that support totals more than $7 million of the tourism levy that accommodation providers collect on behalf of the Government of Alberta. The funding is delivered to industry through six Tourism Destination Regions (TDRs) under contract with Travel Alberta. In 2010-11, the six TDRs invested more than $4.5 million in 693 marketing projects that were leveraged with industry investments of $5.8 million. The balance of the budget was spent on administration or was not drawn upon by industry during the year. At the end of the year, we calculated that industry exceeded our goal of one-to-one leveraging of Travel Alberta co-operative marketing investments by 23%, boosting the total product marketing budget to $10.3 million. With more communities now charging destination marketing fees, Alberta’s tourism industry, led by the hospitality sector, has more resources to market and to leverage Travel Alberta’s co-operative marketing funding. That is creating pressure on Travel Alberta to meet this growing demand as well as to protect co-operative marketing funding to independent regional operators that generally have smaller marketing budgets. That is the principal reason why Travel Alberta has accepted the unanimous recommendation of the Strategic Tourism Marketing Council (STMC) to consolidate co-operative marketing programs within Travel Alberta, effective April 1, 2012. The STMC made its recommendation after conducting an extensive, independent
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four-month consultation with operators across the province.
by Bruce Okabe
The message from industry, both through the consultation process as well as directly to the STMC, was consistent: Alberta’s tourism industry needs more co-operative marketing support from Travel Alberta and an easier way of accessing funding to be competitive in today’s marketplace. Indeed, Travel Alberta’s ongoing business strategy is to simplify and maximize how it delivers tourism services to Alberta’s industry stakeholders. Cost efficiencies realized by removing redundant marketing programs and administrative costs will be reinvested into co-operative marketing support in no less than the current total allocation in each region. That will increase Travel Alberta’s total direct marketing support to industry in Alberta by as much as $1 million annually, when the program is fully implemented. We are committed to maintaining regional funding allocations. We will also be open and transparent on the regional co-operative funding investments that are made by reporting regularly to our Board of Directors, the STMC, and to industry at large. This initiative is a natural extension of the amalgamation of Travel Alberta International and the Travel Alberta Secretariat to the new Crown corporation. Travel Alberta successfully transitioned regional marketing and industry relations programs, outsourced to Parcom Marketing Inc, into the Corporation last April. We also established our first Edmonton office and a team led by Richard Wong as Executive Director, Industry Relations. Richard and his team are leading the transition to a consolidated co-operative marketing program
and will manage the program going forward. He and his industry relations team are now working with the TDR boards and their managing directors on a comprehensive operations plan. This will facilitate an orderly wind-down of the organizations and a smooth transition of the co-operative marketing program, ensuring no interruption of service to industry. All costs associated with the wind down of the TDRs will be covered from non-marketing funds already budgeted by the TDRs and by Travel Alberta. We are also collaborating with the TDRs and seeking input from the STMC on new and improved co-operative marketing guidelines that will be consistent across the province. These guidelines will be simpler and easier to access. We are confident that the new co-operative marketing funding guidelines will better meet the needs of industry marketers which are quite different today than they were 15 years ago when the current structure was designed. The benefits to Alberta’s tourism sector with this new model for delivering funding support for industry marketing programs are being well received by tourism operators here and across the province. I am looking forward to reporting how the new program is providing Alberta’s growing industry with a bigger, more effective voice in a more competitive marketplace. Bruce Okabe is Chief Executive Officer of Travel Alberta.
Let’s Talk Gambling by Kent Verlik During the 5th annual Responsible Gambling Awareness Week (RGAW), set for October 17-23, the Alberta Gaming and Liquor Commission (AGLC) and its partners will again be reminding gambling patrons and staff in casinos, racing entertainment centres, VLT venues, and bingo halls that gambling is a form of entertainment and not a way to make money. With the theme “Play Smart. Gamble Responsibly.”, the campaign will be promoting responsible gambling as well as access to prevention and treatment programs if gambling becomes a problem. To help staff in gambling venues engage in the “responsible gambling talk” with their customers, the AGLC provides various materials, including posters, brochures and self-test cards that can be useful in starting conversations. The AGLC also provides a number of mandatory responsible gambling awareness courses, including Deal Us In (casinos/ RECs), Reel Facts (VLT retailers), and A Good Call (bingo). This training helps gambling venue staff identify the signs of excessive gambling and educate them about the most effective ways to approach the customers and begin the discussion about responsible and problem gambling. With special events such as the RGAW, the gambling industry aims to generate public awareness and increase knowledge of responsible gambling. These events are also an opportunity to recognize the important role the staff in gambling venues play, when it comes to helping their customers gamble responsibly. RGAW is supported by AGLC, Alberta Health Services, the Alberta Hotel & Lodging Association, the Alberta Charitable Casino Operators Association, the Canadian Restaurant and Foodservices Association, and Bingo Alberta. For more information on the week and its events as well as responsible and problem gambling resources, visit www.setalimitalberta.ca. Kent Verlik is Executive Director Corporate Strategy & Social Responsibility, AGLC.
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SAWRIDGE INN & CONFERENCE CENTRE SLAVE LAKE Committed to Community by Alex Van Tol
our HAC green keys. An award-winning banquet manager and executive chef. Community fundraisers. Sounds like salt-of-the-earth stuff, doesn’t it?
It is. “We’re First Nations-owned, so environmental stewardship is important to us,” explains Gloria LeForte, general manager. ���We’re striving towards improving our company all the time in that area.” The Sawridge Inn and Conference Centre Slave Lake is just one of five properties owned by the Sawridge Cree Indian Band. The others are located in Edmonton, Peace River, Fort McMurray, and Jasper. A constantly innovating company, Sawridge’s newest push is in mentoring young First Nations’ students in the hospitality industry by giving them opportunities to work in various departments of the different properties.
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With 173 guest rooms, the Hearthstone Grille, a videogaming entertainment room, Fairways Lounge, the Ridge TapHouse, and banquet/catering facilities, the Sawridge Inn and Conference Centre is the largest hotel in Slave Lake, hosting most of the city’s major events. A strong theme running through the Sawridge brand is a commitment to community. “Each year we participate in the Children’s Make a Wish ‘Sweet Dreams Dessert Day,’” LeForte describes. In 2011, the five properties donated a total of $25,000 to the charity. Giving back to the community is a central part of LeForte’s own life as well. “The guest services manager and I are part of the Rotary Club of Slave Lake,” she explains, “so we do lots of sports celebrity events.” An example is the Sports Celebrity Dinner held on September 9th that featured Canadian women’s hockey champ Hayley Wickenheiser as well as Edmonton Oiler Jordan Eberly. “We
sell out the ballroom upstairs and do a dinner,” reports LeForte. Events like this as well as Rotary’s version of “Deal or No Deal”, generate thousands of dollars for community projects. In previous years, Sawridge’s work with Rotary has led to donations for building a new arena field house, an exercise facility for seniors, and animal rescue initiatives, in addition to support for victims’ services, Scouts, and local schools. Another $400,000 was donated to rebuild the Slave Lake library, which burned in last spring’s devastating fire. In the aftermath of that same fire, the Sawridge Inn and Conference Centre - which was unaffected by the blaze - stepped in to lend a helping hand. “During the whole evacuation, the Sawridge opened its Gloria LeForte, General Manager doors to fire relief emergency crews,” explains LeForte. “From day one, we were feeding over a thousand relief workers every day: breakfast, lunch, and dinner.” And great fare it would have been too. Slave Lake’s Sawridge won two Gold Key awards at the AHLA conference this year for its banquet manager and executive chef. The new executive chef, Edmund Liew-On, “puts a nice spin on things,” boasts LeForte. “He’s just a great personality and people love to work with him. Clients love his ideas, and he’s contributed lots to our company.” The banquet program, while not the Sawridge’s number one revenue source, is “a major contributor,” concedes LeForte. “Sales have grown drastically since we got Richard van Roon on board as banquet manager. The marketing is a collective effort between him and our sales and marketing team in Edmonton,” she notes. “Here in town, in this industry, it’s repeat business and word-of-mouth of our good service that does a lot for us.” With repeat business being its bread and butter, the Sawridge works to keep those contracts coming. “We host sports teams, although this year will probably be different because of the fires,” admits LeForte. “The town is trying to get back to normal. There’s a major pipeline going through this year, and the town doesn’t have enough rooms for the reconstruction of Slave Lake, so we’ll be extra busy.” Winter is usually the Sawridge’s busy season, with the property working with Lesser Slave Lake Regional Tourism to draw crowds. “We try to do anything that is outside normal to attract business,” LeForte continues. “In winter, the ice fishing packages, and in summer, the guided fishing packages have gone well and have grown a lot.” (Unfortunately, like so much of the town, the owner of Adventure Alberta lost his home and boats in the fires, so the fishing trips have been put on hold for the season.) A number of visitors land every year for the bear hunt and walleye tournament, and there’s the odd hunting or fishing show that’s filmed in the area too. LeForte started working at the hotel shortly after she and her husband relocated to Slave Lake in 1995. “I started out as a housekeeper and moved my way up to supervisor,” LeForte reflects. From there, she became housekeeping manager, then rooms division manager and guest services manager…until finally landing in the GM position. “I never foresaw it!” LeForte exclaims. “You just strive to do the best you can in your position. That’s the key to success. It’s giving 100% and being flexible and willing to learn new things.” Sounds like it’s working for the Sawridge Inn and Conference Centre Slave Lake. alberta alberta hospitality hospitality || 17 17
MEASURED MARKETING Now There’s a Concept by Bruce Hayne
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John Wanamaker, considered by many to be the founder of modern advertising, once said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” This may have been quite true in his day, but times have changed. The demand for increased marketing effectiveness coupled with tighter and tighter marketing budgets means hotel chains and individual properties alike must justify every dollar spent. In order to do that, they must have the ability to analyze campaigns quickly and accurately and make adjustments where necessary to increase ROI. Of course, agreeing where to spend those resources is another matter. With accurate information, you will be better equipped to make those decisions. If you are struggling to measure your marketing activities, you are certainly not alone. According to an Accenture study, nearly three quarters of senior business executives in North America and the UK say that their company is unable to accurately measure their campaign ROI. Part of the difficulty lies in clearly determining what data to track and what defined outcomes are expected from various forms of advertising. In
the hotel industry, responsibility for different areas of the marketing process can often be split between head office (of branded chains) and individual properties. For instance, brand recognition (awareness) is a key factor in building customer loyalty, increasing marketing effectiveness and generating first time guest stays. Much of the responsibility for creating brand awareness lies with the corporate office and not so much with each specific property. So when we talk about measuring marketing effectiveness, are we talking about occupancy rates, customer satisfaction, loyalty, average room rate, or all of the above? For the sake of argument, let’s assume that your branding and awareness marketing efforts are managed by corporate, and we will concentrate on your direct marketing activities to put heads in beds. With the soaring Loonie and continued stagnation in the US market, simply looking at occupancy rates year over year may be misleading in terms of how well a campaign works. However, this information will provide an indication of whether a particular market is worth advertising to or not. Inbound inquiries to your property may provide a better indication of
the effectiveness of a campaign. To begin to measure your marketing activities, you must first start with a baseline. This may be statistics from a year ago, or it may be statistics from just prior to a campaign launch. First, determine what is expected from the campaign and what specific action you want potential guests to take. For example, if you want to generate leads and inquiries from event planners and corporate conference organizers, first determine what you want those prospective clients to do: call an 800 number, visit your website, fill out an online form, etc. By determining a specific course of action, you can now accurately track the effect of the various campaign components. What will often occur in a given campaign is that multiple media ads will be used to attract a response. Each of these should be given a unique identifier to track response rates. For example, unique 800 numbers can be used and tracked for various publications. If the goal is to drive traffic to the web, then tracking is much, much easier than with traditional media options. Your website should have an integrated statistics package such as Google Analytics. If
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With direct mail and print ads, you can use QR codes (those small square maze-looking ink blots) to send guests to a specific, unique web page not published in your website navigation. This means that any traffic to that specific page could only have gotten there through your print or direct mail campaign. The real beauty of this method is that you can track, in real time, how your campaign is working. If it’s not meeting your stated goals, you can quickly change various aspects of the campaign (offer, price, media, etc.) before you’ve spent your entire budget only to find out it didn’t resonate with your guests. you’re buying banner advertising and sending electronic ads (newsletters, etc.), your statistics package can track exactly where each click is coming from. Not only that, it can also track exactly what happens when these inbound visits occur (e.g. what pages were viewed, how long they stayed on the site, what forms were filled out, etc.). With a comprehensive banner ad campaign, you can send visitors to unique pages of content that clearly identify (through Google Analytics) where each visitor came from. This then allows you to shift marketing dollars from ineffective ads and sites to the more
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effective ones, thereby reducing your overall cost of lead generation. As consumers spend an increasing amount of time online searching for information before making a purchase, more and more of your marketing activities (read dollars) will be spent in this medium. This is particularly true for the hospitality/tourism industry. That’s not to say that traditional media is not effective. However, your traditional marketing efforts (print ads, direct mail, print coupons, etc.) should leverage your online presence. In this way, you can measure a traditional ad or direct mail campaign by the traffic you generate online.
Regardless of what outcome you want to achieve - whether it’s increased occupancy, loyalty, guest satisfaction, or average rate, setting campaign targets and then tracking your progress will result in provide you with the knowledge needed to make adjustments and refinements. These, in turn, will ultimately reduce your marketing expenditures and will pay dividends to your bottom line. Now there’s a concept everyone can agree on! Bruce Hayne is a partner at ThornleyHAYNE Creative Communications and can be reached at 604581-2827 or firstname.lastname@example.org.
MEMBER VALUE PROGRAM REVIEW
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You can interact with Johnson in a variety of ways: in person through their branch network, via telephone, online, or on a secure Members-Only website. As Johnson Inc. has grown, it has continually examined how it can improve its products and services. Johnson has also considered how it is positioned in the Canadian marketplace, and as a result, has taken a close look at its corporate identity and developed a new Johnson logo. The excellent customer service that AHLA members and their employees have come to know and appreciate will remain unchanged. The new logo captures how Johnson Inc. is a company that continues to move its business forward to provide outstanding customer service. For information on the group program, please contact Nicole Nyenhuis at 1.800.732.6850 or email her at email@example.com. To find out more about Johnson’s industry-leading products and services, please contact the company directly at 1.800.563.0677, or visit www.johnson.ca/ahla.
The AHLA’s 2012 Annual Buyers’ Guide In January the AHLA’s Annual Buyers’ Guide will be published. This reference guide is mailed out to 2,500 buyers in January and is given to new AHLA members when they sign up. It lists all associate members and provides an opportunity for you to highlight your products and services in a display ad. Members prefer to deal with members, so build trust and confidence in your company by showcasing your products to the industry. See rates online at www.emcmarketing. com/abh. For only $100, you can enhance your basic listing with a 50-word description and focus readers’ attention with a box around your listing. The deadline to book space in the 2012 Buyers’ Guide is November 18. Call Joyce at 800-667-0955 for more information.
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SHOWCASING ART TO ATTRACT GUESTS by Chris McBeath
Art is the most intense mode of individualism that the world has known. ~ Oscar Wilde
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Photo courtesy of the Juniper Hotel
SHOWCASING ART TO ATTRACT GUESTS
Photo courtesy of the Matrix Hotel
ver since the boutique movement started to morph mainstream hotels into providing more customized experiences, concepts of originality have edged to the forefront. Whether in architectural features, dynamic design, or complex textures, originality also dominates a hotel’s cultural aspect, especially if it also includes an indigenous or local perspective. Hotel “galleries” - be they a showcase of art or music - are fast becoming the hottest new and experiential hotel amenity. When the Hotel Arts Group opened Hotel Arts in Calgary, its use of art infused both the property and the neighbourhood as a unique and happening destination. “Both the Hotel Arts and the Kensington Riverside Inn are independent properties with a need to differentiate themselves in the market,” says Fraser Abbott, Director of
Business Development for the Hotels Arts Group. “Art has a way or creating personality because it appeals to the senses, imagination, and evokes an emotional response that sets us apart. I often joke that we’re the only hotel where guests push every button of the elevator so they can see the different art installations on every floor!” Social Connections In addition to an extensive investment in original pieces, Hotel Arts actively promotes individual artists, musicians, and writers through a comprehensive social media program. For example, a recent e-news article featured their guest Harley Brown, artist of the Calgary Stampede’s Centennial poster, while another tied the hotel’s dance-club heritage to today’s music
scene. Of the existing art placements within the property, plans are underway to profile each piece on the hotel’s website with background information, hyperlinks, and news so that guests can connect directly with the artists themselves. Design Hotels plays the art card by establishing a brand where the depth of its hotel art experience tells a compelling story. In a justlaunched website, www.MadebyOriginals.com, Design Hotels pays tribute to the driving forces and innovative spirits behind its member hotels. Through image galleries, films, and stories, the online magazine journeys into the world of an “Original” someone - hoteliers, architects, designers, and other artists who make up the chain’s creative community. It frames and elevates guest expectations, and also offers personal recommendations from the “Originals” on the hot places to visit in their home cities. alberta hospitality | 23
SHOWCASING ART TO ATTRACT GUESTS
Community Connections At the Matrix Hotel, where the design esthetic has edginess, art pieces were hand-picked and/or custom-designed to accentuate that vibe. Even the music supports the concept by adding an electric trip-hop rhythm to the hotel’s hip ambiance. It’s a dynamic that fuels the hotel’s community partnerships too. “There’s a lot more emphasis on promoting the cultural experience these days, so we’re particularly pleased to be associated with two of Edmonton’s key art festivals, although our involvement is not so much about generating extra revenue as it is building and maintaining our distinct profile,” says Nicholas Wilson, general manager. “Being an exhibition site for the Works Arts & Design Festival, puts us on the walking-tour-map of all display venues, and that really keeps us top of mind for visitors and locals alike. We also host events for the Fringe Festival, although this year we added to the fun.” The Matrix became the stage for a play that takes place in a hotel, so that guests could actually become a part of the cast.
Photo courtesy of the Matrix Hotel
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Art, dance, and music are very much a part of the Chateau Louis Hotel & Conference Centre, largely because as home base to Vinok Worldance, it is able to tap into those resources to stage three revenue-generating productions: an annual “Christmas Around the World” show, now in its 12th year; a “Klondike Kapers” summer event, and a new “Mardi Gras” extravaganza in early spring. “The real story is the talent of our staff,” explains George Marine, general manager. “For example, one of our bartenders is also an accomplished dancer and percussionist, and is often cast in these shows. Our night auditor enjoys a weekly piano gig in our lounge. And William Chow, a member of our maintenance crew, is such an extraordinary artist that we showcase several of his paintings in the hotel.“
SHOWCASING ART TO ATTRACT GUESTS
William Chow and his painting in the Chateau Louis Hotel Experiential Culture For properties without this kind of on-site talent, connecting with local artists and musicians can really provide a cultural sense of place. Passenger areas at Vancouver International Airport exude a west coast feel with coastal dioramas and significant First Nations art, the most memorable being Bill Reid’s jade sculpture, “The Spirit of Haida Gwai”. The expansion at Edmonton International Airport, slated to open in 2012, also includes a significant contribution by local artists, which authorities hope will build on its
already successful music program. Last year, more than 20 up-and-coming musicians shared their talents, and honed their performance skills by playing in passenger lounges. As art entrenches itself into the hotel amenity package, it is morphing into a more interactive cultural experience. When The Fairmont Jasper Lodge upgraded several areas, the 2,700 sq ft expansion of its Mountain Galleries incorporated a learning library and video centre for watercolour experiments as well as a permanent Artist-in-Residence program. The hotel also offers guests morning yoga amidst its gallery collections. Outdoor sculpture gardens are equally popular. First Nation’sowned Spirit Ridge Vineyard Resort & Spa in Osoyoos uses metallic sculptures to tell the
Grand Hotel artwor k by the Michelber ger Ho tel
Art Imitates Life
Just as hotels are embracing art, so the Vancouver Art Gallery has adopted an interactive online presence named, “Grand Hotel”. This innovative program is a prequel to the physical exhibition opening in 2013, charting the evolution of the hotel from its humble origins as an isolate and utilitarian structure to a cultural phenomenon that figures prominently within the global landscape. projects.vanartgallery.bc.ca/publications/Hotel/home/
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SHOWCASING ART TO ATTRACT GUESTS
aboriginal story; Roche Harbour Resort in Washington State has transformed a disused hayfield into a San Juan visitor destination, and at Crystal Mountain Resort in Michigan, hiking/cross-country ski trails weave through a densely wooded preserve past over 40 sculptures and poetry stones. Each piece interprets a piece of Michigan’s history that not only generates traffic independent of hotel guests, but also procures donations which are reinvested into the park and an annual Summer Sounds Concert Series. One of the most intriguing programs for outdoor art could be to copy a Vancouver Parks Board initiative for Stanley Park. Artists were invited to suspend all manner of eco-creations from trees along a designated forest trail. Made from 100% biodegradable materials, each piece is slowly disintegrating, changing its shape and form through the seasons as the years progress. Art as Eco Decor Coined by a Banff-based design firm, “art eco design” is an emerging term that describes the purposeful artistic transformation of recycled, reclaimed, and re-used goods, not so much as individual art pieces but as intrinsic design elements that embody a historical story, a green ethos, and an art esthetic. Although many hotels have adopted art eco elements, the renovated Juniper Hotel claims to be one of the first where design is driven by art eco principles. Earth friendly options such as green roofs and electricity are as important as these features: fir wood salvaged from a World War II Vintage Air Hangar in Fort MacLeod was repurposed into a hand-crafted bar, end tables, and bench seating. And slate originally used for the roof of an old staff house was repurposed into stylish hotel room numbers, signage, and serving plates. Art Stars For high-end properties, original art can make a stellar difference between four and five-star rankings. Rome’s newest 5-star property, The Grand Hotel via Veneto, has celebrated its fabled locale by re-introducing an impressive art collection of oils and lithographs by artists such as Picasso, Miro, Nespolo, and DeChirico. In BC, when Rosewood recently unveiled the “new” Hotel Georgia in Vancouver, it revealed one of the largest curated, private hotel collections of contemporary Canadian art in the country, all staged to emphasize the hotel’s heritage and the city’s youthful vitality. If nothing else, tune in to the overhead music. In a nod to when the original Hotel Georgia closed its door for renovations, Michael Bublé’s rendition of “Georgia on my Mind” plays twice daily, at 11:08. It’s a nice touch, which personifies the power of art, music, and story.
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Ideas at Work >>> The Inn at Christmas Place, Tennessee, celebrates the festive season all year long with décor, Singing Santa entertainment, family friendly Christmas movie rentals, cookies and milk at turndown, and much more. With a toll free number that spells HOLY-NIGHT, it’s little wonder that this inn is a TripAdvisor Travelers’ top choice. >>> The Standard, in downtown Los Angeles, stages monthly performance pieces on its rooftop terrace, where guests are cast as voyeurs to everything from a scripted lovers’ quarrel over a blue-haze martini to a choreographed dance in the pool. >>> The Ace Hotel, in New York City, offers one-month residencies to on-the-cusp indie rock bands in return for Sunday night performances in the lobby. The gigs have generated standing-room only audiences as well as lucrative dinner-show packages. >>> The Phoenician, Scottsdale, is home to a $25 million art collection featuring European antiques as well as Native American works. The hotel offers a complimentary self-guided audio art tour; guests who take this tour receive admission tickets to the Phoenix Art Museum. >>> The Merrion Hotel, Ireland, which has the largest private collection of art outside of Dublin’s National Gallery, offers a sumptuous Art Tea program where the pastry chefs provide tea time pastries that imitate works of art hung throughout the hotel. >>> The Sorrento Hotel, in Seattle, draws an intellectually curious crowd to “Night School”, a series of lounge-based events that might pitch rock acts into conversation with classical musicians, or feature actors performing scenes from celebrated plays. >>> Following the success of individual Fairmont properties in Toronto and Boston, Fairmont Hotels is developing a relationship with Eye Buy Art, a sister organization to the Magenta Foundation, which works with key organizations to promote Canadian artists and photographers worldwide.
NAMES IN THE NEWS
Fall 2011 Congratulations to the new general managers at the following properties: Maher Ahmed, Prince of Wales Hotel, Waterton Park; Wanda Allen, Super 8 High River; David Bailey, Banff Voyager Inn, Spruce Grove Inn, Banff; Ted Bailey, Holiday Inn Canmore; Ed & Rose Bartsch, Wetaskiwin Lions RV Campground; Manish Bindal, EconoLodge Inn & Suites, Drumheller; Bonnie Blatz, Daysland Golf & Country Club; Richard Boustad, Ramada Hotel & Conference Centre, Edmonton; Walter Bradley, Quality Hotel & Conference Centre Grande Prairie; Tony Britton, Fort Ethier Lodge, Wetaskiwin; Ryan Browning, BCMInns and RV Park, Hinton; Richard Buckle, Ramada Drayton Valley; Bernadette Butwilofski, Riverside Motel, Sangudo; Jon Clarke, Super 8 Taber; Heidi Collins, Hommy Park, Clairmont; Glen Dagley, Travelodge Red Deer; Brent Davidson, Banff Boundary Lodge, Harvie Heights; Amanda Davis, Sedgewick Lake Park Campground; Steven Davis, Quality Hotel & Conference Centre Fort McMurray; Monique Dutchin, MainStay Suites Sherwood Park; Gary Farstad, BCMInns Blairmore; Lisa Gaumont, Ramada Inn & Suites Camrose; Sandeep Ghosh, Best Western Cedar Park Inn, Edmonton; Dean Gillingham, Happy Trails Campground & Cabins, Grande Prairie; Rashan Gupta, Peavine Inn & Suites, High Prairie; Cory Haggar, Falcon Crest Lodge, Canmore; Susan Harper, Sandman Hotel Calgary City Centre; Sylvia Hollands, Pih-to-kwe Campground, Drayton Valley; Brian Holmberg, BCMInns Peace River; John Jennings, Stonebridge Hotel Grande Prairie; Amir Kahn, Comfort Inn & Suites - Airport, Calgary; Daniel Kim, Travellers Inn Camrose; Martin Kim, Whitecourt Inn & Suites, Whitecourt; Brad Kozun, King’s Court Motel, Cold Lake; Pat Kucey, The Lodge Motel, Taber; Ashu Kumar, Hampton Inn by Hilton Edmonton South; Cindy Lefsrud, Caledonia Motor
by Debbie Minke
Inn, Viking; Dianne & David Lee, Dinosaur Trail RV Resort, Drumheller; and Didier Luneau, The Westin Calgary. More new general managers include: Andrew MacKinnon, Best Western PLUS The Inn at St. Albert; Kayla MacKinnon, Comfort Inn & Suites Airdrie; Gail Matlock, Gold Springs Park, Milk River; Tom McKee, Stop Inn Motel, Coleman; Tyrel McLelland, Heritage Inn Hotel & Convention Centre, Taber; Marcus Nellen, Best Western Strathmore Inn; Marlene Neumann, West Harvest Express, Lloydminster; Tiffany Osbourn, Holiday Inn Express Hotel & Suites, Slave Lake; Ryan Osmond, Jasper House Bungalows, Jasper; Brett & Ivy Poff, Western Budget Motels, Whitecourt; Jimmy Pollard, Canalta Hotel Provost; Herb Rackliff, Hyatt Regency Calgary; Megan Ramsay, Willey West Campground, Buck Lake; Bill Rheaume, Grande Prairie Inn; Jana Rowe, Musgrave Agencies Hospitality Inns & Suites, Fort Saskatchewan; Barbara Scott, Silver Creek Lodge, Canmore; Melissa Smith, Bow Rivers Edge Campground, Cochrane; Matt Squires, Holiday Inn Express Red Deer; Amber Vogstad, Super 8 Stettler; Brian & Nancy Wilde, Pincher Creek Veterans Memorial Park & Campground; Randy Woods, Ramada Cold Lake Inn & Suites; and Kevin Yates, Service Plus Inns & Suites Calgary. Baker Creek Chalets is now Baker Creek Mountain Resort, and the Highwayman Motor Inn is now the Super 8 Innisfail. The High Prairie Inn is now Days Inn - High Prairie, and the Holiday Inn Express Hotel & Suites has become the Days Inn & Suites Strathmore. Sunwapta Falls Resort has been renamed as Sunwapta Falls Rocky Mountain Lodge. Jim Greenwood is retiring from his post as vicepresident of broadline divisions for Gordon Food Service Canada after 43 years in the foodservice
industry, 15 of them with GFS. After serving as general manager of many hotel properties in Alberta, Ben Mejia has been named the new general manager for Inland Audio Visual’s Edmonton location. Congratulations to Kim Caron and the team from Executive Mat Services for becoming the first textile rental company in Canada to become ISO 14001 certified. Three Peaks Conference Centre & Aurora Theatre at Solara Resort & Spa in Canmore are now open for business, offering 5,000 sq ft of meeting rooms, multi-use spaces, and a theatre, fully-equipped with the latest audio-visual technology. Vantage Hospitality Group, the parent company of Americas Best Value Inn®, Canadas Best Value Inn®, and the Lexington Collection® of hotels, inns and suites has hit the 1,000 property milestone in just 11 years of operation. Delta Hotels and Resorts has become the first national hotel chain to commit its Canadian portfolio of properties to the new Green Key Meetings program developed by the Hotel Association of Canada and MPI Foundation Canada. In addition to being Green Key Certified, all 46 Delta Hotels and Resorts have been given the Green Key Meetings Certification, which provides meeting planners an unbiased guarantee of Delta’s commitment to environmental stewardship. World Class Certification Services™ (WCCS) has announced a global search is now underway for the first World Class Certified™ hotel or resort. This prestigious certification is awarded to hospitality establishments that provide an uncompromising, engaging and top-tier experience with flawless execution and passion.
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CONTROLLING FOOD COSTS by David Swanston
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CONTROLLING FOOD COSTS
odging operators are placing greater focus on controlling their food programs and lowering costs. With greater media exposure, consumers are more educated and interested in food and regional cuisine. This has created marketing opportunities for hospitality businesses to promote culinary tourism, providing additional incentives to attract guests. The industry has used food and beverage offerings as a way of adding value, but it is becoming difficult to use this as a differentiating factor. It is common for guests to be offered complimentary breakfast, welcome packages, and meal certificates as part of their booking. Facilities that do not have a significant emphasis on food are also finding that guestsâ€™ expectations of availability, selection, and quality have changed. As managers try to build traffic and drive revenue with their food programs, it is becoming increasingly important that they also attend to their food costs. Small inefficiencies can have a significant impact on the bottom line as food volumes increase. This challenge is greater for lodging providers than for typical foodservice operators, due to the complexity of their services.
Multiple operations including restaurants, lounges, self-service hospitality centres, room service, banquets, meeting support, and catering require different approaches to the design and maintenance of their food programs. Managers must utilize tools that provide separate business unit performance tracking while aggregating information into a unified control system. The scope and depth of these systems are greatly influenced by the strategic role that the food program plays in helping achieve broader corporate objectives. Regardless, greater control is required to minimize costs and generate greater culinary contributions. Within the current operations, there are many initiatives that can be utilized to reduce food costs and enhance management information and control. The application may vary for each foodservice unit, but they all must be part of a broader coordinated program. Menu Planning Committing the appropriate amount of time to menu development will help prevent many problems later on. Too often, accommodation providers limit their menus, making them unappealing and losing potential revenue
opportunities. Alternatively, some operators provide an extensive menu that becomes inefficient and costly to deliver. When determining an appropriate menu size, consider a Pareto approach, where roughly 70% of revenue will be driven by 30% of the menu items. For example, if approximately 70% of revenue results from nine best-selling items, then the overall menu should include about 30 items. Menus that differ greatly from this ratio often compromise selection or cost efficiency. Menu offerings should be designed to reflect the brandâ€™s competitive position, but must also consider their impact on food control systems. Providing complex, high quality, made-fromscratch dishes may be desirable but require experienced and trained staff. Without the proper commitment of resources, quality may suffer, waste will increase, and the companyâ€™s reputation will be tarnished. Consumers appreciate simple yet wellprepared dishes using quality ingredients. Creative recipe development will explore opportunities to utilize the same ingredient in many dishes, thereby reducing inventory levels and waste. Extending the use of key ingredients will allow purchasing managers to
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CONTROLLING FOOD COSTS
negotiate discounts based on volume, and food operation units to offer greater selection during non-peak periods. Marinated chicken breast can be served to a banquet, as part of a Santa Fe sandwich in the lounge, topping a Caesar salad on the room service menu one evening, and then also included in a breakfast omelette the following morning. Increasingly popular local sourcing strategies can complicate this approach to recipe planning if there is not significant and consistent product supply available. Buffet service is of particular concern when trying to control costs. Consumption fluctuates, making preparation more difficult, and minimizing waste almost impossible. Some tips to reduce buffet service costs include replenishing small quantities of items more frequently, increasing guest consumption of lower cost items by positioning them at the beginning of the food display, and utilizing smaller plates that require guests to take less and return more frequently. Product Sourcing Developing a strong relationship with a primary foodservice product distributor is critical to reducing costs. As a strategic partner, these suppliers can offer lower prices based on aggregate volumes, can ensure a stable supply, and can assist with ingredient and product sourcing. Key supplier partners can also help improve operational efficiency through electronic billing, delivery scheduling, storage facility sharing, and new product offerings. Many large distributors now have the ability to offer contract production and customized meat cuts for large and loyal customers as well. Products such as produce that experience price instability should be tendered regularly, based on a standard order bundle. As long as quality standards are not compromised, this approach will ensure that prices are competitive and products are available during the tender duration. Many food manufacturers are now offering high quality semi, and fully prepared items at reasonable costs. Although product differentiation may be compromised, many of these items can be used as a base ingredient to be modified for a final dish. Unlike the frozen prepared meals of the past, many of these new items benefit from current technology that can maintain flavour, freshness, and texture. Further advantages are reduced waste, reduced storage requirements, and more efficient and consistent meal production. Operating Procedures Many organizations utilize a commissary to consolidate and reduce inventories. This can present challenges when several service units draw from the same stock. When food costs are high, it becomes difficult to target the problem areas because actual unit product usage is not known. A simple solution is to create virtual inventory tracking systems for each business unit, using the commissary as a supplier. Transfers from the
commissary are tracked and treated as purchases by each business unit. Unit cost of sales can be established by comparing on-hand inventory and product draws to its revenues, allowing managers to identify inefficiencies. Products can also be shared between service units using the same standardized transfer protocols. Calculating and tracking the value of product waste is also an effective means of targeting problem areas. All waste should be recorded including the date, time, item, quantity, and reason for the waste. Attaching a value helps staff understand the significance of these often hidden costs, and can help determine appropriate strategies for reduction. The food prep levels should be adjusted to reflect anticipated consumption, based upon past volumes and upcoming scheduled events. Often preparation levels are subjectively determined and do not reflect actual needs, resulting in stock-outs and excess waste. Determining required stock levels can be made easier with detailed menu planning and recipe specifications. Finally, pre-portioning menu items can reduce the likelihood of excess product being served during final production and service, allowing for cost stabilization. Mistakes are more likely to occur during peak production periods. Reducing production steps by bringing products closer to their final state during preparation is desirable, as long as quality is not compromised. Every operation faces unique challenges when trying to reduce costs and maintain control over their food program. Managementâ€™s job can be made easier by developing a coordinated foodservice plan, and by utilizing these practical strategies for improvement. In addition to earning higher margins, improved quality and consistency will result in increased food revenue and greater guest satisfaction from the enhanced culinary experiences delivered. David Swanston is a Hospitality and Foodservice Consultant, Principal of Focused Industry Training Seminars, and is an instructor at major Canadian university business schools. To learn more about how he can help you improve your sales, profits and performance, contact him directly at 905.331.611 or firstname.lastname@example.org.
Alberta Hotel & Lodging Association Alberta Hotel Safety Association Alberta Laundry Systems
Developing a strong relationship with a primary foodservice product distributor is critical to reducing costs.
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