The CEO challenges in the hospitality industry (GA 2011)

If the hotel General Manager is the “orchestra” conductor of the hotel, the company CEO is the conductor of the whole company and his primary responsibility is to assure that every member of the organization play his / her role in the success of the company.

If one has to define the top 10 challenges of the CEO, we could look at the following ranking:

CEO Top 10 Challenges:

  1. Sustained and steady top of the line growth.
  2. Finding qualified managerial talent & company’s culture.
  3. Excellence in execution in all areas.
  4. Customer loyalty, retention and customer acquisition.
  5. Profit Growth.
  6. Consistent execution of strategy by top management.
  7. Speed, flexibility, adaptability to change.
  8. Corporate / company reputation
  9. Stimulating innovation / creativity / enabling entrepreneurship.
  10. Speed to market and seizing of opportunities.

Of course the CEO has other challenges and responsibilities (especially when it comes to the board / shareholders and the stock exchange), however if the above 10 challenges / tasks are properly accomplished, the company will sail to “calm waters” and it will prosper.

 

If we are to list the job description / responsibilities of a CEO, this could go into several pages, following herewith are the most important topics for hotel CEOs to handle.

Brand:

  • Company Culture: regular updates and cascading process
  • Company organization structure & reporting process
  • Company performance & profitability
  • Strategic growth plan, development & expansions
  • Quality & Brand Management
  • Implementation of Owners / Board requests
  • Corporate Social Responsibilities (CSR)

Corporate Office:

  • Corporate office structure and annual budget
  • Corporate / Company policies & changes
  • Appointment & compensation of all Corporate Officers and termination
  • Salary, bonus and incentives & guidelines / structure
  • Loans / advances and donations
  • Expense claims approval of direct reports

Endorsement of Group-Wide Programs:

  • Customers & Employees Satisfaction Programs
  • Group fees / charges to hotels
  • Training programs & continuous education, concept and budget
  • Development & succession plan, GMs and Corporate Officers
  • Employee Benefits Plans guidelines
  • Quality standards
  • Strategic marketing initiatives
  • Image advertising campaign
  • Announcement & press releases: results, new hotels, crises, owners related
  • Major / alliances: purchasing, marketing etc…

Hotels:

  • Appointment & compensation of hotels’ General Managers and termination
  • Hotels’ annual financial plans & performance
  • Major renovations & change of concepts

 

Development & New Projects:

  • Management / Lease Agreements, financial terms and terminations
  • Design Standards
  • Appointment of major consultants
  • Hotel facilities & concepts

Controls:

  • Cash flow
  • Debt repayments / loans
  • Internal & external audits
  • Code of Conduct and Code of Ethics through the company
  • Bank signatories
  • Write-off of material receivables / recoverables
  • Major litigations / arbitrations
  • Safety in general

 

Of course the job description is to support the CEO top 10 challenges.

Hotel Organizational Structures:

One could look at four typical organizational structure models i.e.:

Regional                  (Most functional and brand specific)

Global / Functional   (High responsibility to key functions)

Brand-centric           (Many brands to manage)

Portfolio                   (Many companies to manage)

Traditionally, the regional models have been the most popular followed by global / functional and then by brand-centric (for very large chains).

Whatever structure is chosen, the key drivers remain the same:

  • Maximize value and challenge operations.
  • Gravitation towards brand as main objective for shareholders’ and customers’ value.
  • Maximize revenue potentials.
  • Opportunities for employees to grow.

Maximization of shared services, technology, efficiency.