What in the Hell are we going to do??? Part Two

I, first hand, have seen the local hotel market plummet and I live in an area with booming commerce. I can't even begin to imagine worse off areas of the country. Rack rates with local hotels have dropped nearly 40%. For those that do not know about Rack Rate, it is the dollar rate that hotels will charge for non LNR or group affiliated guest. Some people call it the "Walk Rate."

Speaking about LNRs (Locally Negotiated Rates) ,or corporate accounts that will bring business to your hotel for a discounted rate, have dropped nearly 30%. The hotel I work for brought one of its LNR rates down to $79.

Key positions have been eliminated. Starwood Hotles have eliminated most of its room directors as also John Q Hammons Hotles have eliminated most of this Assistant General Managers usually on the rooms division side. Several assistant manager positions were eliminated during the recession. This drastically shapes department and hotel operations. Less management coverage could mean severe service quality reduction and follow-up. With AGM or Room Directors now gone GM's cant keep up with the work and will put it on to their food and beverage directors or AGM F&B who are already busy. With less staff working events or at the front desk guest experience can be damaging and business would be lost much quicker than just that particular person. The Hotel industry greatly relies on word of mouth marketing and bad word of mouth is very damaging!

To sum up everything, sometimes it would be more beneficial to make a smaller profit margin, rather then to lose more money when the recession is over because you lost most of your patrons and future guest, because of the bad service you provided, because you laid off all your managers and staff.