Lodging Unlimited performs newsworthy services
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Hotel Doctors On Call.
(Sunday, 01 April 2007)
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By Stan Luxenberg
With tourists pouring into the casinos of Biloxi, Miss., a local mid-price hotel faced a strange problem. Competitors in the market enjoyed 65% occupancy compared with 40% for the troubled property. When the hotel sank into receivership, the lender placed a call to hotel doctor Morris Lasky, CEO of Chicago-based Lodging Unlimited, a well-traveled consulting firm that occasionally buys hotels.
For three days, Lasky walked around the hotel's halls, studying the 217 rooms and cycling through his checklist of potential problems. But nothing seemed amiss. The hotel looked clean and up-to-date. The staff seemed polite to the customers, who included many families with children.
Then Lasky — who has advised more than 200 hotels in a career that spans four decades — studied a report showing the number of reservations that had been rejected. Every time an Internet customer requested a room with two double beds, the request was automatically declined. In January, the hotel had been full one night, and a clerk set the system to decline requests for rooms with two double beds. Then the manager forgot to change the order.
By August, the system had declined 27,000 requests. “I saw the problem and almost fell off my chair,” recalls Lasky, who fixed the mess with one phone call. “Within two weeks, the occupancy had climbed to 65%.” The Mississippi hotel's unusual problem was resolved, and the manager was soon replaced.
Lucrative opportunities exist for the consultants and investors that specialize in turning around troubled units. Often the doctors are called in by inexperienced owners — wealthy lawyers or office developers who have decided to snap up a hotel or two. The problems created by unskilled managers quickly become apparent on balance sheets.
PKF Consulting analyzes the financial statements of 4,500 hotels annually. Currently 10% of the properties could have trouble servicing their debt, says Scott Smith, a PKF vice president in Atlanta. “Those hotels need to consider bringing in new management or changing their marketing campaigns.”
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