Kokua Hospitality has extensive experience in hotel and resort management, purchasing, finance, and ever-evolving information technology. We spoke with Kokua Hospitality President Kirk Pederson about the constant balancing act of a management group and exceeding the expectations of both the owners and guests.
How do you stabilize the constant balancing act working within a management group?
- “It’s definitely is a balancing act,” said President of Kokua Hospitality, Kirk Pederson. “It depends on the owner. Some owners only care about cutting costs and maximizing the Net Operating Income,” said Pederson. “Every product is different, every market, and every owner is different. Sometimes cutting a few costs creates opportunities and sometimes it doesn’t and on the other hand, most owners are sensitive of guest’s feedback, it’s clear that’s important to them. You can’t completely ignore the guests even if the owner’s objective is to cut costs, because then it’s detrimental to the hotel.”
How have you found success exceeding the expectations of both your owners and your guests?
- “It’s a lot of work, but if you do a good job for owners, they will in turn hire you for other projects. So when you exceed expectations, you gain loyalty, which is how I’d rather operate rather than worrying about the brand that’s on the building.”
Do you have any tips for operators on how to achieve success while finding yourself in this delicate balance?
- “Transparency with your ownership group is the number one tip,” said Pederson. “As an operator, you’re paid to give bad and good news, but as we know most people don’t like to give bad news. My advice is to give the bad news first. I think being open and transparent with your ownership group goes a long way. Not everyone’s perfect, but if you can identify what you did and how to fix it, ownership will be understanding, and you’ll move on.”
Can you share any noteworthy examples of successes in this arena (or learning moments)?
- “When working with one specific hotel, we made assumptions on the room mix based on the consumer demographics and the business demographics, but we were wrong. We are noticing this error now while we’re operating the hotel. But we don’t really know if we were wrong in our assumptions until the consumer perceives it. Perception is everything. If you’re not providing the right product to the right consumer at the right time of year – they will notice. So we have a ton of king beds on the property that are not selling. People really want double queens to fit more people in rooms for wholesalers, families, etc. So we went to the ownership group and owned up to our error and now we’re in the process of adding more queen beds to the hotel. At the end of the day we identified the issue, analyzed it, and brought it to ownership team. Ultimately they agreed and appreciated that we brought them this point.”
Were you surprised at the beginning by anything in terms of juggling the needs of both owners and guests?
- “The biggest change for me is that owners are much more sophisticated and their access to information is endless, so as an operator we have to be all over them because they have access to all the same things (if not more). Most of the time owners own more than one hotel so they have all the data and subscriptions to things and Google analytics, Trip Advisor, etc. so they come armed to meetings. We feel like the best solution now is you really have to think of them as a partner and not ignore them, rather work with the owner and include them so as to operate the hotel to best possible way.”
What's the biggest misunderstanding guests have about hotels?
- “I think the biggest misunderstanding guests have is that every hotel that has Hilton on it is owned by Hilton and same for Marriott. People don’t realize that these hotel brands own other properties. Also, guests perceive that food & beverage concepts within hotels make a lot of money, but they don’t realize all the behind the scenes. Most hotel guests feel like they pay too much to eat at a hotel, but they don’t understand that providing that cost within a hotel is much higher than a standalone restaurant.”
What's the biggest misunderstanding owners sometimes have about guests?
“I think because owners have access to various tools, they think that just because you price your hotel at a certain price, the guest is going to pay that price – it doesn’t work that way. The consumer is smarter than the owner and they’re really good at choosing their accommodations. The consumer does their research and most of the time is smarter than the owner. We’re literally just trying to outsmart the consumer by providing the best service in the best hotel and we pay attention. There’s no secret sauce, we just pay attention with a good revenue manager.”
