There is no FREE hotel booking

There is no FREE hotel booking

This story explains the marketing economics behind how a hotel guest finds and books your hotel.

Many years ago, when I managed a large front desk and reservation department at a 400-key hotel, I became fascinated by hotel distribution.

I wanted to understand how a guest somewhere in the world eventually found a particular hotel, which intermediaries stood between the hotel and that guest, what each participant actually did, and how everybody earned their money along the way.

At the time, much of the leisure business in the hotel where I worked came through wholesalers and tour operators.
Corporate business was sourced locally only, or occasionally through GDS.
All at static pricing; dynamic pricing was just starting to develop, and back then I embraced it fully, which caused some friction with the sales team.
Revenue Management was still developing as a discipline, technology was considerably less sophisticated than it is today, and much of my learning involved spreadsheets, experimentation, and asking people questions until I understood how the mechanism worked.

It taught me an important lesson: Distribution is a trade in itself.

Many years later, I sometimes wonder whether all the technology and sophistication we have added since then has made us understand that trade better or merely given us considerably more numbers with which to discuss it.

One of those numbers is the percentage of direct bookings.
There is nothing wrong with direct business. On the contrary, a hotel should have an excellent website, an efficient booking engine, a sensible CRM strategy, and the ability to develop relationships with returning guests.
What I have never quite understood is the assumption that a “direct” booking is, by definition, a “better” booking.

Somewhere along the way, our industry became rather obsessed with eliminating intermediaries.

Hoteliers labeled travel agents as expensive and tour operators as taking too much margin. Wholesalers and OTAs were even worse.
The general belief has been, and still is, that technology would eventually allow hotels to reach customers themselves, that commissions would disappear, that guests would book directly, and that everybody would presumably live happily ever after with a beautifully designed booking engine.

There was only one small problem.
The intermediaries ignored the hotels’ thesis and continued to produce customers.
Rather well, and sustainably.
Perhaps we should therefore remind ourselves what they actually do.

  • A travel agent or travel advisor has a relationship with the customer and generally earns a commission for booking the customer at the hotel.
    Depending on the market and agreement, we might typically be talking about 8–12% of a commissionable rate.
  • A tour operator performs a different function.
    It contracts hotel accommodation and combines or distributes it as part of a travel product.
    It commonly works from a net hotel rate, upon which we might see a markup of approximately 24%.
  • A wholesaler or bedbank operates further into the distribution chain, contracting inventory for onward B2B distribution.
    Here we might see something closer to a 32% markup on the hotel’s contracted net rate.

These percentages are illustrative rather than universal.
Markets, contracts, seasons, volumes, and bargaining power differ considerably.
The important point is something else: They are not the same business.

A travel agent is not a tour operator, and a tour operator is not a wholesaler.
They perform different functions, have different relationships with the customer and hotel, carry different responsibilities, and are remunerated differently.
Yet I have attended enough hotel meetings where all of them were casually grouped together as “agents” or “partners” to suspect that the distinction is not always as obvious as it should be.

Nor should their cost be regarded as a problem automatically.
Imagine that our hotel receives a reservation worth €1,000 through its own website.
No commission. Everybody in the hotel is happy.
Somewhere in the commercial department, a small victory has been recorded for the direct-booking strategy.

Now imagine that a luxury travel advisor sends us another guest whose reservation is worth €1,500.
We pay a €150 commission.
The guest books a better room, stays a little longer, enjoys dinner in the restaurant, spends money at the spa, and, if we do our job properly, may return next year.

For some strange reason, our industry has trained itself to look suspiciously at the €150 rather than enthusiastically at the €1,350.
And that is before we ask what the supposedly free €1,000 direct booking actually cost us.
Because it was not for free.

Before somebody can book directly, we need a website, which comes with costs:

  • The website requires design, photography, content, hosting, and maintenance
  • We need a booking engine and connectivity
  • We may have a CRM platform, loyalty programme and member rates
  • We employ people to manage digital marketing, social media, campaigns, and databases
  • We spend money on search engine optimisation, paid search, and metasearch
  • We may employ an agency to help us spend some of it

Google has also, rather disappointingly, declined to market our hotel for free out of love and affection for the hospitality industry.
Instead, they charge large sums of money for this service.
All of this is the cost of customer acquisition.
More importantly, much of it is paid before we know whether the customer will book at all.

That is economically rather different from an 8–12% travel-agent commission.
The travel advisor has to produce the customer first.
No customer, no booking. No booking, no commission.
There is something rather attractive about an acquisition cost that becomes payable because somebody has actually acquired a customer.

The expensive wholesaler

The comparison becomes even more interesting when we move further down the distribution chain.
At first sight, the wholesaler is perhaps the easiest intermediary to dislike.
If the hotel provides a net rate and something approaching 32% is subsequently added before the accommodation reaches the market, the obvious reaction is to wonder why we do not simply sell directly and keep the difference ourselves.

Sometimes we should. Really.
But before doing so, it is worth asking what the wholesaler actually does.
A wholesaler may distribute our hotel through hundreds, sometimes thousands, of smaller travel companies, which the hotel could never economically contract, service, and maintain individually. Many of those agents have excellent relationships with customers in their home markets but no local presence whatsoever at the destination.

And the guest requires rather more than a bed.
Somebody may need to arrange the airport transfer, local transportation, excursions, guides, and other ground services.
Somebody needs to understand the destination, assemble those components, and make them accessible to an agent sitting several thousand kilometers away.

The hotel provides accommodation.
The wholesaler, often together with destination partners, can help provide the rest of the journey.
Suddenly the 32% looks rather less like somebody simply helping themselves to our room rate.
For a small travel agency without people on the ground, that infrastructure can make a wholesaler an extremely attractive counterpart.
Instead of negotiating separately with hotels, transport companies, guides, and activity providers in a destination it may barely know, the agency can access much of the travel product through one established commercial relationship.

Tour operators add another dimension.

They assemble travel products and, in many jurisdictions, may also carry significant legal responsibility towards the traveller for the proper performance of services included in the package.
That has value too.
A risk-conscious traveller booking an unfamiliar destination may quite reasonably prefer dealing with a tour operator standing behind the complete journey rather than independently purchasing a hotel room, flight, transfer, and various local services from several unrelated companies.

The hotel room is important.
We hoteliers are understandably rather attached to it.
But it remains only one component of somebody’s travel experience.

Currency

Currency is another function hidden within some distribution margins that is easily overlooked.
International tourism has the inconvenient characteristic that the hotel, the intermediary, and the traveller do not necessarily think in the same currency.
A hotel may set its rates in euros, while an intermediary distributes them to markets where customers buy their holidays in pounds, dollars, yen, or other currencies.
Rates may have been contracted many months before the guest actually travels, during which time currencies can move considerably.

Some wholesalers have therefore developed business models that are, in part, remarkably similar to operating a bureau de change.
They contract accommodation in one currency, distribute and sell it in another, manage the exchange-rate exposure between the two, and build that risk into their commercial margin.
If currencies move in their favour, there can be money to be made.
If they move in the opposite direction, there can also be a rather expensive lesson in international finance.

The hotel, meanwhile, may simply receive the contracted net amount in the agreed currency.
That matters when looking at a wholesaler’s 32% markup and concluding that somebody between the guest and us is making an extraordinarily comfortable living.
Part of that margin may indeed be profit.
But part of it may be paying for access to hundreds of smaller agents, destination infrastructure and ground services, technology and connectivity, administration, credit and collection risk, and currency exposure.

The wholesaler is not necessarily taking 32% for passing our room from one computer to another.
It may be performing functions and carrying risks that the hotel has consciously or otherwise decided not to carry out itself.
That does not automatically make 32% good value.
It simply means that before declaring it expensive, we should understand what we are actually paying for.

The OTA miracle

The OTA deserves separate consideration because its commission is perhaps the most misunderstood acquisition cost.
A commission of 15–18% can seem expensive when compared with a reservation made through the hotel’s own website.
But once again, we need to ask what we are actually buying.

The major OTAs have achieved something approaching a miracle in distribution.
They have built global marketplaces capable of placing a small independent hotel in front of a customer almost anywhere in the world, in the customer’s own language, displaying prices in the customer’s own currency, supported by technology, payment solutions, reviews, customer service, and an enormous body of knowledge about how travellers search, compare, and eventually book.

Booking.com and its competitors are not merely fancy websites with a great deal of hotel inventory attached.
Behind the website lies state-of-the-art technology, enormous amounts of data, and distribution expertise that very few individual hotels could hope to replicate.
They know how customers in different markets search.
They know when they search, what they compare, which information influences conversion, and how demand behaves across destinations, dates, devices, and markets.

A Revenue Manager at a single hotel can be exceptionally good at managing that hotel’s revenue.
It would be slightly ambitious to expect that person to possess the global consumer data, technology, marketing infrastructure, and distribution intelligence accumulated by a platform that processes millions of searches and transactions worldwide.

The OTAs also market. A great deal.
They invest their own capital in search engines, metasearch, apps, technology, content, loyalty programmes, conversion, and consumer recognition.
Their reach extends beyond their own websites through affiliate and distribution relationships, including airlines, loyalty programmes and other travel platforms.

For an independent hotel, reproducing even part of that network would be extraordinarily difficult.
Some distribution relationships may become accessible through a hotel brand or representation company, but that route is hardly free either.
There are joining and implementation costs, technology requirements, recurring fees, and often additional charges related to the revenue generated through the system.

The OTA offers something fundamentally different.
It builds the infrastructure, develops the technology, provides market expertise, translates and distributes the product across major languages and currencies, markets to customers, maintains the consumer platform and distribution relationships, and may facilitate payments and currency conversion.
Depending on the model and product sold, it may also assume additional responsibilities towards the traveller.
Most importantly, much of this is offered to the hotel at a variable transactional cost.
If all that technology, expertise, and marketing fails to produce a booking for our hotel, we do not receive an invoice for the unsuccessful attempt.
The OTA carries that acquisition risk.
If it produces business, only then we pay.

Seen in that context, the 15–18% OTA commission is not simply a reservation commission.
It is a combined charge for marketing, technology, distribution, customer acquisition, and access to expertise and infrastructure that the hotel would otherwise have to build, buy, or contract for elsewhere.

And yet, having achieved something rather remarkable, the OTAs have also failed rather spectacularly to explain it to their hotel partners.
For years, the conversation between the hotels and OTAs has largely revolved around commission percentages.
The hotel sees 15%, 17%, or 18% of room revenue leaving and understandably asks why it is paying so much money to a website.

The OTA then spends considerable energy explaining visibility, conversion, and ranking while somehow failing to say the much simpler thing:
We are not selling you a website listing.
We are providing you with a global distribution and customer acquisition infrastructure, and you pay us when it generates business.
That is a rather different proposition.

Perhaps if the OTAs had explained this better, hoteliers would have spent slightly less time trying to defeat them.
That does not mean OTA business is automatically good business.

Their success has created its own problems.

  • Dependency can become dangerous.
  • Hotels can surrender too much control over the customer relationship.
  • Promotions, preferred-placement programmes, discounts, and visibility tools can push the effective cost considerably beyond the headline commission.
  • And where the OTA is capturing demand that the hotel could efficiently have converted itself, the economics deserve to be challenged.

But the comparison should at least be honest.
Comparing an OTA reservation with a 15–18% commission to a direct reservation with “zero commission” tells us remarkably little.
One includes much of its marketing, technology, and distribution cost in a transactional charge payable when business has been generated.
The other sits atop a commercial infrastructure that the hotel has already paid for, hoping that business will follow.

The relevant question is therefore not:
How do we reduce OTA commission?

It is:
What would it cost us to acquire the same customer in the same market at the same moment without the OTA?

Sometimes the hotel will do it considerably more cheaply.
Sometimes it will not.

Revenue Management meets Financial Control:

Which brings me to something else I learned over the years.
Revenue Management and Financial Control should probably spend more time together.
Revenue Management has become an extraordinarily sophisticated discipline.
We measure ADR, RevPAR, room and bedding occupancy density, channel mix, booking pace, conversion, displacement, length of stay, segmentation, market penetration, and an impressive collection of other indicators.

All of them are useful. Yet, none of them pays the bills.

  • A hotel can increase revenue and become less profitable
  • It can increase direct bookings while simultaneously increasing the cost of acquiring them
  • It can reduce commissions while adding commercial payroll, technology subscriptions, and marketing expenditure
  • It can improve RevPAR while generating disappointing cash flow
  • And it can achieve every KPI on the Revenue Management presentation while leaving the owner wondering where the money went

Eventually, there is one KPI which has a rather irritating habit of settling the argument: Cash

Hotels do not pay salaries with RevPAR.
Banks have shown remarkably little enthusiasm for accepting direct-booking ratios in lieu of loan repayments, and utility companies remain stubbornly attached to receiving money.
The purpose of Revenue Management, therefore cannot simply be to maximise revenue.
Nor should Financial Control merely arrive afterward to explain what happened to it.

Revenue Management understands demand, pricing, segmentation, and distribution.
Financial Control understands what remains after the revenue has travelled through the organisation.

The two disciplines belong together because the commercially relevant question is not:
How much commission did we pay?

It is:
What did it cost us to acquire this business, what did the guest contribute, and what remained?

Return to our €1,000 direct booking.

Perhaps that guest arrived after clicking a paid advertisement.
Perhaps a member discount was involved.
Behind the reservation sit the website, booking engine, CRM, commercial payroll, technology, content, marketing, and all the other infrastructure required to create direct demand.

Some of those costs are fixed. Some are variable.
Some are extremely difficult to allocate to an individual reservation.
They remain costs nevertheless.

Now return to our €1,500 travel-advisor booking.

We paid a €150 commission.
But perhaps that advisor has a relationship with a customer in a market where our hotel has no meaningful sales presence.
Perhaps the advisor knows that Mrs. Guest cares about the restaurant, that Mr. Guest wants somewhere quiet, that neither wants a complicated airport transfer, and that both are prepared to spend considerably more for the right experience.

The advisor is not merely accessing our reservation system.
The advisor is lending us something that took years to build: Trust
That trust has commercial value.
It is particularly relevant in luxury travel, where professional advisors and the networks and consortia around them can introduce hotels to customers they would otherwise spend considerable time and money trying to reach.

No booking engine can manufacture that relationship overnight.
If that customer subsequently books a suite, eats in the restaurant, uses the spa, stays an additional night, and returns the following year, the discussion about whether the original €150 commission was expensive begins to look rather different.

Of course, intermediated business can also be bad business.
A wholesaler can dilute rates, create unwanted price transparency, or distribute inventory into places where it was never intended to appear.
A tour operator can occupy rooms at a rate that looked perfectly sensible six months earlier and becomes rather less attractive when higher-rated demand materialises.
An OTA can become too dominant.
A travel agent can produce business that contributes very little beyond the room.

Every channel can produce good business.
Every channel can produce bad business. Including direct.
This is why I become slightly uncomfortable when hotels proudly announce objectives such as increasing direct business or reducing dependency on intermediaries without attaching a financial consequence to them.

Those are distribution objectives. They are not necessarily business objectives.

Imagine a hotel where direct-booking share has increased, ADR is up, OTA dependency has fallen, and commission expenditure has decreased.
The commercial presentation will probably contain several reassuring green arrows.

Now imagine that Financial Control adds another page showing that digital marketing expenditure has increased substantially, technology costs have risen, loyalty discounts have grown, commercial payroll has risen, ancillary spending per guest has fallen, and the additional room revenue has generated very little additional cash.

Some of the arrows may require reconsideration.
If increasing direct business improves contribution and cash generation, excellent.
If paying commission produces customers with greater total value and stronger contribution, I am equally happy to pay the commission.
If a tour operator provides profitable volume from a market we cannot efficiently reach ourselves, there is nothing inherently wrong with its margin.

If a wholesaler can manage hundreds of relationships, destination services, collections, and currencies more efficiently than we can, perhaps its markup deserves to be understood before it is condemned.
And if an OTA spends its own money and deploys technology and distribution infrastructure that we could never economically reproduce, finds us a customer on the other side of the world, and asks to be paid only when it has produced business, perhaps its commission deserves a little more analysis than simply appearing as an undesirable percentage on the P&L.

I have no particular emotional attachment to any route.
The guest will ultimately sleep in exactly the same bed.
What matters is whether we acquired the right guest, at the right cost, through the right partner, at the right moment, and whether the resulting business produced a satisfactory return.

Perhaps that is the part of revenue management that deserves more attention.
Not simply managing rates. Not simply managing revenue. Not simply managing channels.
But understanding the economics of the entire journey from customer acquisition to cash.

For years, the hotel industry has predicted that technology would eventually render travel agents unnecessary.
The travel agent has shown a disappointing lack of cooperation.
The tour operator remains at work, the wholesaler is still distributing rooms, and the OTAs have somehow become some of the largest travel businesses in the world while we were discussing how to reduce their commissions.

So I suggest we postpone the funeral.

Before deciding which intermediary to bury next, perhaps we should invite Revenue Management and Financial Control into the same room, explain exactly what every participant in the distribution chain actually does, put the complete cost of acquiring the guest on the table, and ask one rather simple question:
Which business actually leaves us with the most cash?

The answer may be slightly less direct than we expected.

Thank you for reading my story.

This story is part of a series—”The Banana Republic Hotel and What It Taught Me About Myself”—in which I share lessons learned throughout my professional and personal journey and how those experiences have shaped my thinking and led me to develop my own principles.

If you enjoyed reading the story and have the appetite to read another one, you are invited to visit G&A’s website, in particular its INSIGHTS page, where you can find all stories.
Alternatively, click here to be taken to the next story.

I hope it has provided some food for thought, encouraged curiosity, and inspired you to keep learning.

Curiosity, humility, and continuous learning remain among the most valuable tools we possess.

Terminology for non-hoteliers:

  • SOP: Standard Operating Procedure – a documented process describing how a task should be performed to ensure consistency, quality, and compliance.
  • KPIs: Key Performance Indicators – measurable indicators used to monitor performance and progress against objectives.
  • ADR: Average Daily Rate – the average room rate paid by guests.
  • RevPAR: Revenue per Available Room – a measure combining occupancy and room rate to assess hotel revenue performance.
  • Occupancy: The percentage of available rooms that are occupied.
  • DOF: Double Occupancy Factor – the average number of guests staying in each occupied room. A DOF of 1.0 means every occupied room has one guest; 2.0 means every occupied room has two guests.
  • AGC: Average Guest Check – the average amount spent by each guest in a restaurant, bar, or other food and beverage outlet.
  • CRS: Central Reservation System – the central booking system that manages a hotel’s room inventory, rates, and reservations across all sales channels.
  • PMS: Property Management System – the software used to manage reservations, guest accounts, and hotel operations.
  • OTA: Online Travel Agency – websites such as Booking.com or Expedia that sell hotel rooms on behalf of hotels.
  • GDS: Global Distribution System – a worldwide booking network used by travel agents and corporate travel departments to reserve hotel rooms, flights, and other travel services.
  • CRM: Customer Relationship Management – systems and processes used to manage guest relationships and marketing.
  • F&B: Food & Beverage Department – all restaurant, bar, banquet, room service, and catering operations within a hotel.
  • Half-Board: A hotel meal plan that includes breakfast and one additional meal each day, usually dinner. Drinks other than those specifically included are generally charged separately.
  • MICE: Meetings, Incentives, Conferences and Events – the hotel business related to corporate meetings, conferences, exhibitions, and incentive travel.
  • ERP: Enterprise Resource Planning – an integrated software system that connects key business functions such as finance, procurement, inventory, human resources, sales, and reporting into a single platform.
  • USALI: Uniform System of Accounts for the Lodging Industry – the internationally recognised accounting standard used by hotels to measure and compare financial performance.
  • GOP: Gross Operating Profit – the operating profit generated by the hotel before management fees, rent, financing costs, depreciation, taxes, and other non-operating expenses.
  • EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation – a widely used measure of an organisation’s operating profitability.
  • COS: Cost of Sales – the direct cost of producing the goods sold, such as food, beverages, or merchandise, expressed as an amount or percentage of revenue.
  • FTE: Full-Time Equivalent – a standard measure of staffing that converts part-time and seasonal employees into the equivalent number of full-time employees.

About the Author

Raoul Gransier is a Senior International Adviser and owner-focused hotelier with more than 30 years of operational and advisory experience in hospitality, tourism, governance, and performance improvement.

Website

https://gransier.com

/by

The Banana Republic Hotel

The Banana Republic Hotel

Reader’s Note: The story that follows is presented as fiction.
It is inspired by experiences accumulated over more than thirty years in hospitality and organisational advisory work.
Events, conversations, characters, timelines, and organisations have been altered, combined and fictionalised to protect confidentiality and prevent the identification of any individual or enterprise.
The management lessons are real.

Among all the hotels I have worked in and advised over the years, one stands apart.
It marked a turning point in my career.

There was a time before it, a time during it, and a time after it.
I knew when I accepted the assignment that it would not be easy.
The hotel had established a certain reputation.
I was brought in, or so I believed, to change that culture rather than become part of it.

I soon discovered that experience alone does not always prepare us for the choices we must make.
The experience taught me humility as a person and a deep appreciation of governance as a professional.

Over the years, working with hotels in many different countries, I encountered levels of pilferage and corruption that took my breath away.
It reflected a broader environment in which weak governance had become normal across both the private and public sectors.
Having worked in both luxury and volume hospitality, particularly in emerging markets, I learned that hotels attract more than guests seeking a good bed, food, and friendly service.
They can also attract colourful and opportunistic investors, managers, and employees who are drawn to the movement of cash.

This very large hotel, with more than 1,000 beds, operated more like a factory than a hotel.
It had developed its own informal economy resembling a small banana republic.
Throughout its history, as I had observed also elsewhere, informal payments and personal favours had become widely accepted.
Salaries were not always what motivated behaviour.
For some, the real money flowed elsewhere, through vendors, suppliers, and commercial relationships that existed largely beyond the hotel’s formal controls.

Everyday life reflected that same culture.
The lobby bar had become a regular meeting place for individuals whose presence created an intimidating atmosphere for guests and employees alike.
I experienced the intimidation myself when I stood up for how some of the staff were being treated by customers.
One colleague found an elegantly simple solution—the credit is all his.
The nearby police station was offered discounted lunches in the staff canteen, requiring officers to walk through the lobby several times a day.
The regular police presence quickly persuaded the unwanted clientele to find another venue.

One day, a trusted employee quietly drew my attention to filming taking place in the hotel that was wholly inconsistent with its purpose and reputation.
This was not incidental but part of a series of adult films recorded over time on the hotel premises.
What surprised me most was not the activity itself or its having become common knowledge throughout the hotel.
What surprised me was that it had become impossible to ignore.
It made me conscious of the risk of when and how I reported my findings to whom.
It was another reminder that, where governance is weak, organisations gradually lose control over how their assets and reputation are used.
I could have looked the other way, as others had seemingly done before.
In the absence of appropriate governance, I chose not to.
The practice was being stopped immediately.

The hotel management company promoted a culture inspired by values, spirit, and bespoke authenticity.
It had engaged highly capable professionals who genuinely believed in the standards, processes, and services that management was supposed to deliver.
Regular meetings were held to review key performance indicators, with discussions centered on revenue, profitability, and operational performance.

Yet, when I walked the hotel floor, the reality told a very different story.
The expectation of management’s compliance seemed strangely disconnected from everyday operations.
The language spoken in boardrooms bore little resemblance to the behaviours I observed throughout the hotel.

It does not take too much effort to diagnose what is wrong by studying the numbers.
The hard part is accepting accountability at diagnosis and taking responsibility to fix it.
When this is absent, it destroys value, weakens businesses, and ultimately erodes the morale of the very people who make those businesses possible.

Over the years, I have learned that while problems are often diagnosed from the top, sustainable solutions are usually built from the bottom up.
The devil is in the details, and he is rarely found in public but somewhere at the bottom where no one has looked before—or perhaps no one did want to look too closely.

The hotel was caught between its past and its future.
Looking back, I could have walked away.
Instead, I chose to confront it.

I chose to lead through accountability rather than through control and punishment.
That sounds straightforward, but it proved to be one of the most difficult leadership decisions of my career.
Resistance rarely presented itself openly.
Instead, it was quiet, persistent, and often invisible.

The team working alongside me did an extraordinary job.
I have found that people employed at the same company have a remarkable tendency to accept what is inappropriate when management has normalised it.
To reduce reality to villains would have been too easy; people deserve better.
Therefore, when signalling a different approach, one that was guided by transparency, many members of the existing management team chose to walk that path with me.

Departmental managers were trained to understand their departmental KPIs.
Responsibility migrated to where decisions were made.
As a result, management no longer needed to chase operational shortcomings.
For example, when F&B guest capture rates or average guest check values fell below target during a particular shift, departmental managers initiated the analysis, identified the cause, and implemented corrective action themselves.
That allowed management to spend less time exercising control and more time providing leadership.

We eliminated the inappropriate use of the hotel store.
Rather than banning unaccountable staff purchases, I publicly bought the same items during management meetings, paid with my own credit card, and asked for a receipt.
Nobody needed an explanation.
The signal was clear.
What applies to management applies to everyone else.

We chose to work with the trade union rather than around it.
I realised that the primary challenge was to change the organisational culture.
Together with the team, I addressed this two-fold; on the one hand, I studied the existing labour agreement and worked diligently with the trade union in preparing a new one.
Second, to achieve immediate impact, we presented the hotel’s performance to the staff each month in language everyone could understand—together with the trade union.
Sharing reality fostered a shared sense of ownership.
Gossip and speculation gradually disappeared.

Management was invited by a leading newspaper to be interviewed.
Such PR opportunities are often used by hotel management to raise the hotel’s profile within the local business community.
We chose a different approach.
Rather than putting myself in the spotlight, I asked the journalist to interview members of our line staff instead.
Over the following months, interviews were published with maids, clerical staff, and many others who would normally never find themselves in the limelight.
I deliberately chose not to influence, edit, or manipulate these interviews.
It was a gamble.
The outcome still gives me goosebumps.
The care, pride, and sophistication with which these colleagues represented the hotel were extraordinary.
Each represented the hotel as though they carried ultimate responsibility for it.
Sharing the hotel’s performance with them had made a difference.

Wholesalers, tour leaders, and suppliers occasionally arrived carrying envelopes, hoping to negotiate next year’s contracts.
They left with those envelopes unopened.
Instead, we insisted on transparent pricing.

Slowly, steadily, and deliberately, we repositioned the business.
We developed a new market positioning strategy and established a sales team to implement it.
Low-yield wholesale business was gradually replaced by a market segment the hotel had never seriously pursued before: Meetings & Conferences.
Direct bookings increased through a fully redesigned website that rewarded guests with additional value rather than discounted prices.

We worked diligently on improving cash flow, not just short-term gross operating profit (GOP).
Despite resistance from both inside and outside the organisation, we gradually tightened payment discipline while reducing wholesale allotments.

The Food and Beverage proposition was strengthened by recruiting a signature Executive Chef.
For the first time, the hotel actively promoted its culinary competence—not to compete with the city’s restaurants, but to demonstrate that we were no longer simply the cheap half-board hotel.

We converted an unused restaurant into a multifunctional staff canteen that also served nearby office workers.
A cost centre became a profit centre, strengthening both staff morale and management’s relationship with the trade union.

Leadership also meant accepting that not every operational inefficiency should be eliminated automatically.
For example, the twelve-hour reception shifts were physically demanding for the front-line staff and, from a service and revenue perspective, far from ideal.
Yet they created alternating short- and long-work weeks that allowed several receptionists, many of them single mothers, to balance work and family life.
We could have changed the rota. Instead, we chose to understand why it existed.
Not every compromise serves the business. Sometimes it serves the people who make the business possible.

The staff entrance may have looked like the gates of hell, but it was in keeping with the rest of the building.
We tried to brighten things up where we could, despite financial constraints and a collective labour agreement that often worked against both the hotel and its staff.
Together with the management team, we tried to foster a sense of belonging through small gestures.
On Women’s Day, a locally celebrated occasion, we welcomed every female colleague with flowers.
During particularly hot days, we distributed bottles of water to our housekeeping colleagues while they worked on the floors.
As a team, we also encouraged everyone to spend part of their salaried working time supporting a local children’s foster home, where we organised activities and celebrations for special occasions.
These may have seemed like small gestures in hindsight, but they represented a change in tone that people noticed and helped foster a spirit of dialogue and accountability rather than autocracy.

This particular hotel taught me a lesson I have carried throughout my career.
Operational excellence cannot compensate for governance failure.

  • You can improve service
  • You can renovate rooms
  • You can increase occupancy
  • You can recruit talented people

None of it will endure if conflicts of interest remain, the organisation lacks effective compliance mechanisms, and autocracy is chosen as the governing principle.

Integrity is not a slogan.
It is the alignment between what is said and what is done.
It is a truth I have found in every story in this series.

If even one reader pauses before compromising their principles because of something they read here, these stories will have served their purpose.

Thank you, dear colleagues.

Looking back, my gratitude belongs to the many colleagues who chose to embrace change rather than resist it.

Department heads, supervisors, line staff, trade union representatives, and countless others demonstrated professionalism, resilience, and courage throughout that journey.
Whatever we achieved was never the work of one person but of a team that proved that, when people are trusted, supported, and united by a common purpose, remarkable change is possible.

I carry your trust in my heart.

Thank you for reading my story.

This story is the final story of a series—”The Banana Republic Hotel and What It Taught Me About Myself”—in which I share lessons learned throughout my professional and personal journey and how those experiences have shaped my thinking and led me to develop my own principles.

If you enjoyed reading the story and have the appetite to read another one, you are invited to visit G&A’s website, in particular its INSIGHTS page, where you can find all stories.

I hope it has provided some food for thought, encouraged curiosity, and perhaps offered a different perspective on why governance matters.

Curiosity, humility, and continuous learning remain among the most valuable tools we possess.

Terminology for non-hoteliers:

  • SOP: Standard Operating Procedure – a documented process describing how a task should be performed to ensure consistency, quality, and compliance.
  • KPIs: Key Performance Indicators – measurable indicators used to monitor performance and progress against objectives.
  • ADR: Average Daily Rate – the average room rate paid by guests.
  • RevPAR: Revenue per Available Room – a measure combining occupancy and room rate to assess hotel revenue performance.
  • Occupancy: The percentage of available rooms that are occupied.
  • DOF: Double Occupancy Factor – the average number of guests staying in each occupied room. A DOF of 1.0 means every occupied room has one guest; 2.0 means every occupied room has two guests.
  • AGC: Average Guest Check – the average amount spent by each guest in a restaurant, bar, or other food and beverage outlet.
  • CRS: Central Reservation System – the central booking system that manages a hotel’s room inventory, rates, and reservations across all sales channels.
  • PMS: Property Management System – the software used to manage reservations, guest accounts, and hotel operations.
  • OTA: Online Travel Agency – websites such as Booking.com or Expedia that sell hotel rooms on behalf of hotels.
  • GDS: Global Distribution System – a worldwide booking network used by travel agents and corporate travel departments to reserve hotel rooms, flights, and other travel services.
  • CRM: Customer Relationship Management – systems and processes used to manage guest relationships and marketing.
  • F&B: Food & Beverage Department – all restaurant, bar, banquet, room service, and catering operations within a hotel.
  • Half-Board: A hotel meal plan that includes breakfast and one additional meal each day, usually dinner. Drinks other than those specifically included are generally charged separately.
  • MICE: Meetings, Incentives, Conferences and Events – the hotel business related to corporate meetings, conferences, exhibitions, and incentive travel.
  • ERP: Enterprise Resource Planning – an integrated software system that connects key business functions such as finance, procurement, inventory, human resources, sales, and reporting into a single platform.
  • USALI: Uniform System of Accounts for the Lodging Industry – the internationally recognised accounting standard used by hotels to measure and compare financial performance.
  • GOP: Gross Operating Profit – the operating profit generated by the hotel before management fees, rent, financing costs, depreciation, taxes, and other non-operating expenses.
  • EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation – a widely used measure of an organisation’s operating profitability.
  • COS: Cost of Sales – the direct cost of producing the goods sold, such as food, beverages, or merchandise, expressed as an amount or percentage of revenue.
  • FTE: Full-Time Equivalent – a standard measure of staffing that converts part-time and seasonal employees into the equivalent number of full-time employees.

About the Author

Raoul Gransier is a Senior International Adviser and owner-focused hotelier with more than 30 years of operational and advisory experience in hospitality, tourism, governance, and performance improvement.

Website

https://gransier.com

/by

Hospitality Taught me Humility

Hospitality Taught me Humility

This story is about how hospitality taught me humility.

Over the years, I have been part of, or supported owners and managers of, hotels, resorts, restaurants, tourism businesses, and hospitality platforms as they succeeded, struggled, recovered, and sometimes failed.

One observation has remained remarkably consistent.

Hospitality assets rarely fail for lack of capital, systems, brands, concepts, technology, or effort.
More often, they under-perform because of a lack of alignment between managers and owners about who is responsible and accountable; in other words, or more likely, the fancy language you may recognise from a poster put on the wall of the cantina: “Governance”.

Governance.
This word sounds distant when things are going well, or you may not know the full picture.
But it becomes the subject of each and every discussion when expectations are not aligned.

Much of what I know today was not learned in classrooms.
It came from years of operational exposure, difficult environments, blood, sweat, tears, mistakes, recovery, responsibility, and accountability.

Responsibility and accountability are not social media buzzwords.
They require standing up for what you believe in and taking the blame when you are wrong.
Managing operational crises, safeguarding debt service, payroll, supplier commitments, ownership transitions, business recovery, and complex stakeholder environments taught me that performance problems rarely exist in isolation.

Revenue, operations, commercial strategy, cost structures, governance, leadership, and capital allocation are interconnected.
Believe me, I have seen my share, and I have learned the hard way.
As a professional.
And as a family man.
Standing up for what is right, also when you realise the failings of the other party as well as your own, is not an easy call to make.
It requires maturity.
And over time, maturity shapes character.
Which proves my point.

Failure in one phase of your professional life, or your business, can lead to maturity in the next.
Failure becomes valuable when approached with humility, accountability, and a willingness to learn from operational reality.
The real danger begins when employees or organisations become emotionally invested in defending decisions that no longer serve the business.
That is when facts become inconvenient.
That is when reporting becomes selective.
That is when accountability becomes blurred.
That is when capital starts funding hope rather than strategy.

Over time, I have developed three core management principles that continue to shape my thinking about how to responsibly run a business.

  1. Commercial performance does not operate in isolation.
  • Revenue is not the starting point, and must not be limited to revenue management, but start by asking what is the optimal use of the property (“Highest-and-Best-Use”, or in short: HBU).
  • Revenue is the consequence of a much larger system involving governance, capital allocation, product definition, market positioning, sales execution, organisational capability, and ultimately the guest experience.
  • Equally, the outcome of commercial performance should not be measured solely through operating indicators such as Average Daily Rate (ADR), Occupancy, RevPAR, or Gross Operating Profit (GOP).
    These metrics are important, but they are not the final objective.

The real question is whether the business is creating value:
value for guests, value for employees, value for owners, and value that can be clearly explained and demonstrated to shareholders, lenders, and other stakeholders.
Sustainable commercial performance is therefore not merely about generating revenue.
It is about strengthening the long-term value of the business, the asset, and ultimately the land upon which it stands.

  1. Portfolio growth requires differentiated strategies.

Governance frameworks can often be standardised.
Economic reality cannot.

  • What works for a luxury resort will not necessarily work for a mid-market city hotel.
  • What works for an owner-operated asset may fail completely in a multi-property platform.
  1. Organisational capability remains the critical link between strategy and execution.
  • Many performance challenges are not caused by a lack of capital, systems, brands, concepts, technology, or intent.
  • They are caused by inconsistent application, unclear accountability, and weak execution at both management and ownership level.

Strategy is rarely the problem. Execution usually is.
The compass I use to navigate these situations is governance.
Not governance as bureaucracy.
Rather, governance is the operating system of decision-making.
It creates clarity around decision rights, accountability, expectations, information flows, and risk.
Because organisations generally perform well when people understand who decides, who executes, who is accountable, and how decisions translate into action.

After more than thirty years in hospitality, I remain convinced that sustainable EBITDA growth is rarely the result of individual initiatives.
It is usually the result of alignment.
Alignment between ownership objectives, organisational capability, commercial strategy, operational execution, and capital allocation.
When those elements align, performance follows.
When they do not, no amount of effort can compensate indefinitely.

Thank you for reading my story.

This story is part of a series—”The Banana Republic Hotel and What It Taught Me About Myself”—in which I share lessons learned throughout my professional and personal journey and how those experiences have shaped my thinking and led me to develop my own principles.

If you enjoyed reading the story and have the appetite to read another one, you are invited to visit G&A’s website, in particular its INSIGHTS page, where you can find all stories.
Alternatively, click here to be taken to the final story.

I hope it has provided some food for thought, encouraged curiosity, and inspired you to keep learning.

Curiosity, humility, and continuous learning remain among the most valuable tools we possess.

Terminology for non-hoteliers

  • SOP: Standard Operating Procedure – a documented process describing how a task should be performed to ensure consistency, quality, and compliance.
  • KPIs: Key Performance Indicators – measurable indicators used to monitor performance and progress against objectives.
  • ADR: Average Daily Rate – the average room rate paid by guests.
  • RevPAR: Revenue per Available Room – a measure combining occupancy and room rate to assess hotel revenue performance.
  • Occupancy: The percentage of available rooms that are occupied.
  • DOF: Double Occupancy Factor – the average number of guests staying in each occupied room. A DOF of 1.0 means every occupied room has one guest; 2.0 means every occupied room has two guests.
  • AGC: Average Guest Check – the average amount spent by each guest in a restaurant, bar, or other food and beverage outlet.
  • CRS: Central Reservation System – the central booking system that manages a hotel’s room inventory, rates, and reservations across all sales channels.
  • PMS: Property Management System – the software used to manage reservations, guest accounts, and hotel operations.
  • OTA: Online Travel Agency – websites such as Booking.com or Expedia that sell hotel rooms on behalf of hotels.
  • GDS: Global Distribution System – a worldwide booking network used by travel agents and corporate travel departments to reserve hotel rooms, flights, and other travel services.
  • CRM: Customer Relationship Management – systems and processes used to manage guest relationships and marketing.
  • F&B: Food & Beverage Department – all restaurant, bar, banquet, room service, and catering operations within a hotel.
  • Half-Board: A hotel meal plan that includes breakfast and one additional meal each day, usually dinner. Drinks other than those specifically included are generally charged separately.
  • MICE: Meetings, Incentives, Conferences and Events – the hotel business related to corporate meetings, conferences, exhibitions, and incentive travel.
  • ERP: Enterprise Resource Planning – an integrated software system that connects key business functions such as finance, procurement, inventory, human resources, sales, and reporting into a single platform.
  • USALI: Uniform System of Accounts for the Lodging Industry – the internationally recognised accounting standard used by hotels to measure and compare financial performance.
  • GOP: Gross Operating Profit – the operating profit generated by the hotel before management fees, rent, financing costs, depreciation, taxes, and other non-operating expenses.
  • EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation – a widely used measure of an organisation’s operating profitability.
  • COS: Cost of Sales – the direct cost of producing the goods sold, such as food, beverages, or merchandise, expressed as an amount or percentage of revenue.
  • FTE: Full-Time Equivalent – a standard measure of staffing that converts part-time and seasonal employees into the equivalent number of full-time employees.

About the Author

Raoul Gransier is a Senior International Adviser and owner-focused hotelier with more than 30 years of operational and advisory experience in hospitality, tourism, governance, and performance improvement.

Website

https://gransier.com

/by

The People Who Taught Me

The People Who Taught Me

This story is about gratitude.

The most valuable teachers are not always the most impressive.
Often, they are simply the people who leave us unable to think exactly as we did before we met them.

I carry many such people with me.
Not their titles. Not their positions.
Not their achievements.
But, their lessons.
And in the end, that may be the only part of any of us that truly survives.

When people speak about mentors, they usually describe a senior figure who intentionally guided their development.
My experience was different.
Most of my teachers never applied for the role.

Some never realised they were teaching me at all.

  • An Executive Chef taught me humility
  • A Dishwasher taught me respect
  • A General Manager taught me authenticity
  • An HR Director taught me that people and performance are not enemies
  • A COO taught me pace
  • A CEO taught me to first set direction
  • A Peer taught me the difference between competence and trust
  • Others taught lessons they never intended to teach

Some through generosity. Some through discipline.
Some through conflict. Some through disappointment.
Many through example. A few through warning.
What connects them is not whether I agreed with them.
What connects them is that something survived the encounter.
A lesson. An idea.
A perspective. A question.

The more mature I become, the less interested I am in judging people as successes or failures.
Most people are both.
Most people possess strengths and weaknesses.
Most people are struggling with challenges invisible to everyone else.
The same is true of organisations.
And certainly, true of myself.

Looking back, I realise my career was shaped less by formal education than by observation.
Watching people. Learning from people.
Admiring people. Occasionally arguing with people.
And sometimes discovering wisdom in places I did not expect to find it.

The people who taught me rarely resembled the teachers I imagined I needed.
Perhaps that is why their lessons endured.

Thank you for reading my story.

This story is part of a series—”The Banana Republic Hotel and What It Taught Me About Myself”—in which I share lessons learned throughout my professional and personal journey and how those experiences have shaped my thinking and led me to develop my own principles.

If you enjoyed reading the story and have the appetite to read another one, you are invited to visit G&A’s website, in particular its INSIGHTS page, where you can find all stories.
Alternatively, click here to be taken to the next story.

I hope it has provided some food for thought, encouraged curiosity, and inspired you to keep learning.

Curiosity, humility, and continuous learning remain among the most valuable tools we possess.

Terminology for non-hoteliers:

  • SOP: Standard Operating Procedure – a documented process describing how a task should be performed to ensure consistency, quality, and compliance.
  • KPIs: Key Performance Indicators – measurable indicators used to monitor performance and progress against objectives.
  • ADR: Average Daily Rate – the average room rate paid by guests.
  • RevPAR: Revenue per Available Room – a measure combining occupancy and room rate to assess hotel revenue performance.
  • Occupancy: The percentage of available rooms that are occupied.
  • DOF: Double Occupancy Factor – the average number of guests staying in each occupied room. A DOF of 1.0 means every occupied room has one guest; 2.0 means every occupied room has two guests.
  • AGC: Average Guest Check – the average amount spent by each guest in a restaurant, bar, or other food and beverage outlet.
  • CRS: Central Reservation System – the central booking system that manages a hotel’s room inventory, rates, and reservations across all sales channels.
  • PMS: Property Management System – the software used to manage reservations, guest accounts, and hotel operations.
  • OTA: Online Travel Agency – websites such as Booking.com or Expedia that sell hotel rooms on behalf of hotels.
  • GDS: Global Distribution System – a worldwide booking network used by travel agents and corporate travel departments to reserve hotel rooms, flights, and other travel services.
  • CRM: Customer Relationship Management – systems and processes used to manage guest relationships and marketing.
  • F&B: Food & Beverage Department – all restaurant, bar, banquet, room service, and catering operations within a hotel.
  • Half-Board: A hotel meal plan that includes breakfast and one additional meal each day, usually dinner. Drinks other than those specifically included are generally charged separately.
  • MICE: Meetings, Incentives, Conferences and Events – the hotel business related to corporate meetings, conferences, exhibitions, and incentive travel.
  • ERP: Enterprise Resource Planning – an integrated software system that connects key business functions such as finance, procurement, inventory, human resources, sales, and reporting into a single platform.
  • USALI: Uniform System of Accounts for the Lodging Industry – the internationally recognised accounting standard used by hotels to measure and compare financial performance.
  • GOP: Gross Operating Profit – the operating profit generated by the hotel before management fees, rent, financing costs, depreciation, taxes, and other non-operating expenses.
  • EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation – a widely used measure of an organisation’s operating profitability.
  • COS: Cost of Sales – the direct cost of producing the goods sold, such as food, beverages, or merchandise, expressed as an amount or percentage of revenue.
  • FTE: Full-Time Equivalent – a standard measure of staffing that converts part-time and seasonal employees into the equivalent number of full-time employees.

About the Author

Raoul Gransier is a Senior International Adviser and owner-focused hotelier with more than 30 years of operational and advisory experience in hospitality, tourism, governance, and performance improvement.

Website

https://gransier.com

/by

The Professional I Could No Longer Trust

The Professional I Could No Longer Trust

Not every lesson arrives through success and admiration.
Some arrive through disappointment, hurt, and betrayal.

This story is about discernment: the ability to recognise that competence and trustworthiness are not the same thing.

Competence creates confidence. Trust creates relationships.
When I was younger, I believed competence naturally created trust.
Experience taught me otherwise. Competence creates confidence.

Trust creates relationships. The two often appear together.
Occasionally they do not.
The difference matters.

Some of the most successful people I have encountered were not necessarily the most trustworthy.
Some of the most trustworthy were not necessarily the most successful.
The rare individuals possess both.
Those are the people worth keeping close.

One of the most capable professionals I encountered during my career taught me exactly that.
Her expertise was genuine.
She opened the door to my early career in advisory work.
I learned from her. Significantly.
We collaborated, exchanged ideas, developed opportunities, and worked together over many years.

At least that was how I understood the relationship.

Over time, circumstances changed.
A client relationship moved elsewhere.
People I had worked with were pursued to join her for a very promising opportunity.
Looking back, I no longer view the events as a misunderstanding or a difference in perception.
The consequences were significant, both professionally and personally.
What had taken years to build—relationships, concepts, and frameworks—disappeared remarkably quickly.

I have experienced my share of professional disappointments.
Few affected me as deeply as this one.
The commercial and contractual consequences were not the most important part of the story.
The real lesson was different.
The experience forced me to confront a possibility I had previously preferred not to consider.
Professional competence and personal trustworthiness are not the same thing.

For a long time, I struggled with that conclusion.
Not because I did not understand what had happened.
Rather, because I found it difficult to reconcile the contradiction.
How could somebody demonstrate such professionalism in one area and such poor judgement in another?

Years passed.
I struggled. I adapted. I rebuilt.
I developed new capabilities and new business lines.
I strengthened structures that reduced dependency on individuals and created greater resilience.
In many ways, this experience reinforced a theme that would later become central to my professional thinking: governance.

For me, governance is not bureaucracy.
Governance is the operating system of decision-making.
It creates clarity around decision rights, accountability, expectations, information flows, and risk.
Proper governance does not eliminate human error or poor judgement.
It does, however, reduce ambiguity and make organisations less vulnerable when trust is tested.

One principle gradually emerged from this experience.
Revenue can be purchased.
Trust must be earned.
In the long run, trust is often what produces sustainable revenue.

Over time, my frustration diminished.
My conclusion remained.
The professional relationship ended because trust had been broken.
Some things can be repaired. Others cannot.

Yet something interesting happened.
My respect for her professional capability survived.
I continued to recognise her expertise.
I continued to acknowledge the contribution she made to my own development.
The relationship ended. The lessons remained.

That distinction took years to understand.
It would be easy to reduce the story to heroes and villains.
Reality is rarely that simple. Neither are people, nor me.

Looking back, I learned two lessons:

  • One about commercial thinking
  • One about character

Both were valuable. Only one survived the relationship.
And, more importantly, this helped me avoid becoming a cynic and remain guided in my work with people by trust.

Thank you for reading my story.

This story is part of a series—”The Banana Republic Hotel and What It Taught Me About Myself”—in which I share lessons learned throughout my professional and personal journey and how those experiences have shaped my thinking and led me to develop my own principles.

If you enjoyed reading the story and have the appetite to read another one, you are invited to visit G&A’s website, in particular its INSIGHTS page, where you can find all stories.
Alternatively, click here to be taken to the next story.

I hope it has provided some food for thought, encouraged curiosity, and inspired you to keep learning.

Curiosity, humility, and continuous learning remain among the most valuable tools we possess.

Terminology for non-hoteliers:

  • SOP: Standard Operating Procedure – a documented process describing how a task should be performed to ensure consistency, quality, and compliance.
  • KPIs: Key Performance Indicators – measurable indicators used to monitor performance and progress against objectives.
  • ADR: Average Daily Rate – the average room rate paid by guests.
  • RevPAR: Revenue per Available Room – a measure combining occupancy and room rate to assess hotel revenue performance.
  • Occupancy: The percentage of available rooms that are occupied.
  • DOF: Double Occupancy Factor – the average number of guests staying in each occupied room. A DOF of 1.0 means every occupied room has one guest; 2.0 means every occupied room has two guests.
  • AGC: Average Guest Check – the average amount spent by each guest in a restaurant, bar, or other food and beverage outlet.
  • CRS: Central Reservation System – the central booking system that manages a hotel’s room inventory, rates, and reservations across all sales channels.
  • PMS: Property Management System – the software used to manage reservations, guest accounts, and hotel operations.
  • OTA: Online Travel Agency – websites such as Booking.com or Expedia that sell hotel rooms on behalf of hotels.
  • GDS: Global Distribution System – a worldwide booking network used by travel agents and corporate travel departments to reserve hotel rooms, flights, and other travel services.
  • CRM: Customer Relationship Management – systems and processes used to manage guest relationships and marketing.
  • F&B: Food & Beverage Department – all restaurant, bar, banquet, room service, and catering operations within a hotel.
  • Half-Board: A hotel meal plan that includes breakfast and one additional meal each day, usually dinner. Drinks other than those specifically included are generally charged separately.
  • MICE: Meetings, Incentives, Conferences and Events – the hotel business related to corporate meetings, conferences, exhibitions, and incentive travel.
  • ERP: Enterprise Resource Planning – an integrated software system that connects key business functions such as finance, procurement, inventory, human resources, sales, and reporting into a single platform.
  • USALI: Uniform System of Accounts for the Lodging Industry – the internationally recognised accounting standard used by hotels to measure and compare financial performance.
  • GOP: Gross Operating Profit – the operating profit generated by the hotel before management fees, rent, financing costs, depreciation, taxes, and other non-operating expenses.
  • EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation – a widely used measure of an organisation’s operating profitability.
  • COS: Cost of Sales – the direct cost of producing the goods sold, such as food, beverages, or merchandise, expressed as an amount or percentage of revenue.
  • FTE: Full-Time Equivalent – a standard measure of staffing that converts part-time and seasonal employees into the equivalent number of full-time employees.

About the Author

Raoul Gransier is a Senior International Adviser and owner-focused hotelier with more than 30 years of operational and advisory experience in hospitality, tourism, governance, and performance improvement.

Website

https://gransier.com

/by

The Most Admirable Hotel General Manager I Know

The Most Admirable Hotel General Manager I Know

This story is about how authenticity taught me that leadership begins with understanding who you are.

Throughout my career, I have encountered many leaders who tried to imitate others.
The successful ones rarely did.
The strongest leaders usually possess a deep understanding of who they are.
They then build upon that foundation, not by replacing their strengths, but by complementing them.

The most memorable Hotel General Manager I know taught me a lesson I continue to carry today.
People do not follow perfection. They follow authenticity.
And authenticity becomes more powerful when combined with curiosity and a willingness to keep learning.

Over the years, I have worked with many Hotel General Managers.
Some were commercially brilliant. Some were operationally exceptional.
Some were charismatic. Some were disciplined.
Some were feared. Some were respected.

One in particular remains in my memory.
Not because he was the most analytical, or achieved the best KPIs.
And certainly not because he was the most demanding.
In many ways, he is my opposite.
His teams genuinely love him.
Not merely respect him. They love him.
There is a difference.

He is approachable, patient, and genuinely interested in people.
He remembers names, families, birthdays, concerns, and successes.
People naturally want to do well for him.
I admire that. Because – even if our worldview is the same – I could not do it the way he does.
My instinct has always been different. I gravitate toward structure, numbers, expectations, analysis, and systems.
When faced with a problem, I look for causes.
He looks for people first.

Yet over time, something interesting happened.
He became increasingly curious about the commercial and operational logic behind the business.
Not because he wanted to become more analytical, but because he wanted to become more effective.
He started asking different questions.
Questions about profitability. Questions about assumptions.
Questions about consequences. Questions about why things worked the way they did.
And then he did something important. He did not abandon who he was.
He incorporated what he learned into who he already was.

The result was remarkable.
The warmth remained. The humanity remained.
The connection with his teams remained.
But now there was additional clarity, additional discipline, and additional understanding.

Eventually he was promoted.
The promotion surprised nobody. Least of all me.
What impressed me was not the promotion itself.
It was his evolution. He did not become somebody else.
He became more complete.

Perhaps more.
He taught me that leadership is not merely about achieving better numbers.
It is about becoming the best version of yourself.
The numbers are often a consequence rather than the objective.

His path happened to be different from mine. And that was precisely why it was valuable.

Thank you for reading my story.

This story is part of a series—”The Banana Republic Hotel and What It Taught Me About Myself”—in which I share lessons learned throughout my professional and personal journey and how those experiences have shaped my thinking and led me to develop my own principles.

If you enjoyed reading the story and have the appetite to read another one, you are invited to visit G&A’s website, in particular its INSIGHTS page, where you can find all stories.
Alternatively, click here to be taken to the next story.

I hope it has provided some food for thought, encouraged curiosity, and inspired you to keep learning.

Curiosity, humility, and continuous learning remain among the most valuable tools we possess.

Terminology for non-hoteliers:

  • SOP: Standard Operating Procedure – a documented process describing how a task should be performed to ensure consistency, quality, and compliance.
  • KPIs: Key Performance Indicators – measurable indicators used to monitor performance and progress against objectives.
  • ADR: Average Daily Rate – the average room rate paid by guests.
  • RevPAR: Revenue per Available Room – a measure combining occupancy and room rate to assess hotel revenue performance.
  • Occupancy: The percentage of available rooms that are occupied.
  • DOF: Double Occupancy Factor – the average number of guests staying in each occupied room. A DOF of 1.0 means every occupied room has one guest; 2.0 means every occupied room has two guests.
  • AGC: Average Guest Check – the average amount spent by each guest in a restaurant, bar, or other food and beverage outlet.
  • CRS: Central Reservation System – the central booking system that manages a hotel’s room inventory, rates, and reservations across all sales channels.
  • PMS: Property Management System – the software used to manage reservations, guest accounts, and hotel operations.
  • OTA: Online Travel Agency – websites such as Booking.com or Expedia that sell hotel rooms on behalf of hotels.
  • GDS: Global Distribution System – a worldwide booking network used by travel agents and corporate travel departments to reserve hotel rooms, flights, and other travel services.
  • CRM: Customer Relationship Management – systems and processes used to manage guest relationships and marketing.
  • F&B: Food & Beverage Department – all restaurant, bar, banquet, room service, and catering operations within a hotel.
  • Half-Board: A hotel meal plan that includes breakfast and one additional meal each day, usually dinner. Drinks other than those specifically included are generally charged separately.
  • MICE: Meetings, Incentives, Conferences and Events – the hotel business related to corporate meetings, conferences, exhibitions, and incentive travel.
  • ERP: Enterprise Resource Planning – an integrated software system that connects key business functions such as finance, procurement, inventory, human resources, sales, and reporting into a single platform.
  • USALI: Uniform System of Accounts for the Lodging Industry – the internationally recognised accounting standard used by hotels to measure and compare financial performance.
  • GOP: Gross Operating Profit – the operating profit generated by the hotel before management fees, rent, financing costs, depreciation, taxes, and other non-operating expenses.
  • EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation – a widely used measure of an organisation’s operating profitability.
  • COS: Cost of Sales – the direct cost of producing the goods sold, such as food, beverages, or merchandise, expressed as an amount or percentage of revenue.
  • FTE: Full-Time Equivalent – a standard measure of staffing that converts part-time and seasonal employees into the equivalent number of full-time employees.

About the Author

Raoul Gransier is a Senior International Adviser and owner-focused hotelier with more than 30 years of operational and advisory experience in hospitality, tourism, governance, and performance improvement.

Website

https://gransier.com

/by

The Dome in the Pamir Mountains

The Dome in the Pamir Mountains

This story is about purpose.

Some moments stay with me far longer than the hotel budgets, RevPAR reports, or quarterly reviews I once spent so much time preparing.

This photograph captures one of those moments.

Just before the COVID pandemic, I stood high in the Pamir Mountains of Kyrgyzstan with the owner of a small guesthouse from Osh.
Behind us stretched one of the most remote landscapes I have ever visited.
The cold was unforgiving. Yet the atmosphere was filled with optimism.

The year before this owner had joined a study tour I organised in Italy.
The objective was straightforward: to explore how agritourism could create new opportunities for small hospitality businesses.
While others were interested in improving existing operations, he spoke about something entirely different.

He had a dream.
He wanted to build a dome lodge high in the mountains, on the road between Osh and the Tajik border.
The M41, more commonly known as the Pamir Highway (Russian: Памирский тракт, romanised: Pamirsky Trakt), is a road traversing the Pamir Mountains across Afghanistan, Uzbekistan, Tajikistan, and Kyrgyzstan, with a length of over 1,200 km.
It sounded ambitious.

The location was remote.
The operating season was short. Infrastructure was limited.
Most advisers would probably have started by listing the risks.
Instead, we spoke about possibilities.
Not because optimism replaces analysis, but because good analysis should never extinguish genuine ambition.

Despite COVID, despite the lack of infrastructure, and despite difficult financing, he made his dream come true.
The lodge generated year-round employment for local families.
Young people who might otherwise have left their villages for poorly paid work abroad could now build a future closer to home.
Visitors discovered one of the world’s most extraordinary mountain landscapes.
One entrepreneur’s determination had quietly changed a small part of his community.

That project reminded me why I entered hospitality in the first place.

Throughout my career, I became fascinated by numbers.

  • Occupancy
  • ADR
  • RevPAR
  • GOP and EBITDA flow-through
  • Cash flow
  • Governance

They all matter. 
Without them, businesses struggle to survive. But they are not the purpose.
They are the justification.

The real purpose lies elsewhere.
A profitable hotel creates opportunities for owners to invest.
It creates stable employment. It gives young people careers. It supports suppliers.
It pays taxes that, when used well, strengthen economies and communities.
It allows people to dream a little bigger than they otherwise could.

Whenever I review a hotel’s performance today, I still look at the numbers first.
But I try never to stop there.
Because somewhere behind every dashboard are people whose lives will be better—or worse—depending on the decisions those numbers help us make.

The dome in the Pamir Mountains reminded me that behind every KPI lies a purpose.
Lose sight of that purpose, and eventually the numbers lose their meaning.

Thank you for reading my story.

This story is part of a series—”The Banana Republic Hotel and What It Taught Me About Myself”—in which I share lessons learned throughout my professional and personal journey and how those experiences have shaped my thinking and led me to develop my own principles.

If you enjoyed reading the story and have the appetite to read another one, you are invited to visit G&A’s website, in particular its INSIGHTS page, where you can find all stories.
Alternatively, click here to be taken to the next story.

I hope it has provided some food for thought, encouraged curiosity, and inspired you to keep learning.

Curiosity, humility, and continuous learning remain among the most valuable tools we possess.

Terminology for non-hoteliers:

  • SOP: Standard Operating Procedure – a documented process describing how a task should be performed to ensure consistency, quality, and compliance.
  • KPIs: Key Performance Indicators – measurable indicators used to monitor performance and progress against objectives.
  • ADR: Average Daily Rate – the average room rate paid by guests.
  • RevPAR: Revenue per Available Room – a measure combining occupancy and room rate to assess hotel revenue performance.
  • Occupancy: The percentage of available rooms that are occupied.
  • DOF: Double Occupancy Factor – the average number of guests staying in each occupied room. A DOF of 1.0 means every occupied room has one guest; 2.0 means every occupied room has two guests.
  • AGC: Average Guest Check – the average amount spent by each guest in a restaurant, bar, or other food and beverage outlet.
  • CRS: Central Reservation System – the central booking system that manages a hotel’s room inventory, rates, and reservations across all sales channels.
  • PMS: Property Management System – the software used to manage reservations, guest accounts, and hotel operations.
  • OTA: Online Travel Agency – websites such as Booking.com or Expedia that sell hotel rooms on behalf of hotels.
  • GDS: Global Distribution System – a worldwide booking network used by travel agents and corporate travel departments to reserve hotel rooms, flights, and other travel services.
  • CRM: Customer Relationship Management – systems and processes used to manage guest relationships and marketing.
  • F&B: Food & Beverage Department – all restaurant, bar, banquet, room service, and catering operations within a hotel.
  • Half-Board: A hotel meal plan that includes breakfast and one additional meal each day, usually dinner. Drinks other than those specifically included are generally charged separately.
  • MICE: Meetings, Incentives, Conferences and Events – the hotel business related to corporate meetings, conferences, exhibitions, and incentive travel.
  • ERP: Enterprise Resource Planning – an integrated software system that connects key business functions such as finance, procurement, inventory, human resources, sales, and reporting into a single platform.
  • USALI: Uniform System of Accounts for the Lodging Industry – the internationally recognised accounting standard used by hotels to measure and compare financial performance.
  • GOP: Gross Operating Profit – the operating profit generated by the hotel before management fees, rent, financing costs, depreciation, taxes, and other non-operating expenses.
  • EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation – a widely used measure of an organisation’s operating profitability.
  • COS: Cost of Sales – the direct cost of producing the goods sold, such as food, beverages, or merchandise, expressed as an amount or percentage of revenue.
  • FTE: Full-Time Equivalent – a standard measure of staffing that converts part-time and seasonal employees into the equivalent number of full-time employees.

About the Author

Raoul Gransier is a Senior International Adviser and owner-focused hotelier with more than 30 years of operational and advisory experience in hospitality, tourism, governance, and performance improvement.

Website

https://gransier.com

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Hotels + Public Money

Hotels + Public Money

This story is about how institutional work taught me that trust is built when reality and representation remain aligned.

Years later, I entered institutional advisory work.
It was a very different world from hotel operations.

Instead of guests, employees, and owners, I found myself working with international financial institutions, donor-funded development programmes, procurement frameworks, governance structures, and advisory assignments supporting hotels and tourism businesses across emerging markets.

Many readers may wonder what that actually means.

In this context, a donor is not a charity.
A donor is typically a national government, a group of governments, or an international organisation that allocates development funding to strengthen economic growth and stability in other countries.
Rather than providing money directly to businesses, these funds are often channelled through international financial institutions and development programmes.
Part of those resources finances technical advisory projects for small and medium-sized enterprises.

The purpose is not charity.
It is sustainable economic development.
The idea is simple: Strong businesses create employment, generate tax revenue, attract investment, and contribute to more resilient local economies.
For hotel, restaurant, and travel trade owners, this often means access to highly subsidised advisory support covering subjects such as commercial repositioning, operational improvement, governance, financial management, leadership development, or business planning.

The objective is not to take over the business.
The objective is to leave behind knowledge that remains valuable long after the advisory assignment has finished.
In other words, the objective is not to create dependency on advisors but to build capability within the business itself.

Donor-funded advisory often provides SMEs with the support they need once they begin experiencing growing pains.
Examples of such SMEs include family-owned hotels and restaurants and travel agencies, all of which are based in developing economies.
Many of these enterprises are not yet ready for private equity or institutional investment because they have not yet developed the governance, reporting, and management capabilities required to manage third-party capital.
Many aspire to reach that stage, each progressing at its own pace.

I found that idea inspiring.
My role was to help SMEs become stronger businesses by improving governance, commercial performance, financial planning, and management capability, thereby preparing them to access finance and use investment responsibly.
No two businesses were ever the same. The principles often were.

The work took me to countries, businesses, cultures, and ultimately, people.
Albania, Armenia, Azerbaijan, Belarus, Croatia, Egypt, Georgia, Greece, Jordan, Kazakhstan, Kyrgyz Republic, Moldova, Mongolia, Montenegro, Serbia, Slovakia, Tajikistan, Tanzania, Tatarstan, Tunisia, Uzbekistan, and Ukraine.

Much of the work was rewarding.
Some of it was frustrating.

What surprised me most, however, was how similar the underlying challenges were to those I had encountered years earlier in hotel operations.

  • People remained people.
  • Ambition remained ambition.
  • Fear remained fear.
  • And trust remained fragile.

The larger the system became, the easier it was for reality and representation to drift apart.

Reports could look better than facts.
Processes could appear stronger than their implementation.
Compliance could exist on paper while underlying problems remained unresolved.
Whenever reality and representation diverged, difficulties eventually emerged.

The larger the gap, the greater the consequences.
Over time, I realised that governance is often misunderstood.
Many people see governance as bureaucracy.
I came to see it differently.

Governance is simply the process of managing expectations.

  • Who decides?
  • Who is responsible?
  • Who is accountable?
  • Who knows what?
  • What happens when something goes wrong?

Without clear answers, trust slowly erodes.
That observation reinforced something I had learned years earlier while managing hotels.

Integrity is not a slogan.
It is the alignment between what is said and what is done.

I remain grateful for the opportunity to have worked with international financial institutions, donors, local entrepreneurs, and hotel owners across many countries.
The experience convinced me that these programmes remain important where markets, public administration, or political systems alone cannot fully support private-sector development.

But they also confirmed something even more fundamental.
No institution, governance framework, or procurement process can substitute for personal integrity.
In the end, every system still depends on people choosing to do the right thing when nobody is watching.

Thank you for reading my story.

This story is part of a series—”The Banana Republic Hotel and What It Taught Me About Myself”—in which I share lessons learned throughout my professional and personal journey and how those experiences have shaped my thinking and led me to develop my own principles.

If you enjoyed reading the story and have the appetite to read another one, you are invited to visit G&A’s website, in particular its INSIGHTS page, where you can find all stories.
Alternatively, click here to be taken to the next story.

I hope it has provided some food for thought, encouraged curiosity, and inspired you to keep learning.

Curiosity, humility, and continuous learning remain among the most valuable tools we possess.

Terminology for non-hoteliers:

  • SOP: Standard Operating Procedure – a documented process describing how a task should be performed to ensure consistency, quality, and compliance.
  • KPIs: Key Performance Indicators – measurable indicators used to monitor performance and progress against objectives.
  • ADR: Average Daily Rate – the average room rate paid by guests.
  • RevPAR: Revenue per Available Room – a measure combining occupancy and room rate to assess hotel revenue performance.
  • Occupancy: The percentage of available rooms that are occupied.
  • DOF: Double Occupancy Factor – the average number of guests staying in each occupied room. A DOF of 1.0 means every occupied room has one guest; 2.0 means every occupied room has two guests.
  • AGC: Average Guest Check – the average amount spent by each guest in a restaurant, bar, or other food and beverage outlet.
  • CRS: Central Reservation System – the central booking system that manages a hotel’s room inventory, rates, and reservations across all sales channels.
  • PMS: Property Management System – the software used to manage reservations, guest accounts, and hotel operations.
  • OTA: Online Travel Agency – websites such as Booking.com or Expedia that sell hotel rooms on behalf of hotels.
  • GDS: Global Distribution System – a worldwide booking network used by travel agents and corporate travel departments to reserve hotel rooms, flights, and other travel services.
  • CRM: Customer Relationship Management – systems and processes used to manage guest relationships and marketing.
  • F&B: Food & Beverage Department – all restaurant, bar, banquet, room service, and catering operations within a hotel.
  • Half-Board: A hotel meal plan that includes breakfast and one additional meal each day, usually dinner. Drinks other than those specifically included are generally charged separately.
  • MICE: Meetings, Incentives, Conferences and Events – the hotel business related to corporate meetings, conferences, exhibitions, and incentive travel.
  • ERP: Enterprise Resource Planning – an integrated software system that connects key business functions such as finance, procurement, inventory, human resources, sales, and reporting into a single platform.
  • USALI: Uniform System of Accounts for the Lodging Industry – the internationally recognised accounting standard used by hotels to measure and compare financial performance.
  • GOP: Gross Operating Profit – the operating profit generated by the hotel before management fees, rent, financing costs, depreciation, taxes, and other non-operating expenses.
  • EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation – a widely used measure of an organisation’s operating profitability.
  • COS: Cost of Sales – the direct cost of producing the goods sold, such as food, beverages, or merchandise, expressed as an amount or percentage of revenue.
  • FTE: Full-Time Equivalent – a standard measure of staffing that converts part-time and seasonal employees into the equivalent number of full-time employees.

About the Author

Raoul Gransier is a Senior International Adviser and owner-focused hotelier with more than 30 years of operational and advisory experience in hospitality, tourism, governance, and performance improvement.

Website

https://gransier.com

/by

The Empty Castle

The Empty Castle

This is another story about the “Highest-and-Best-Use” (HBU) for hotels.

When people imagine hotel consulting, they usually picture boardrooms, PowerPoint presentations, and strategy workshops.

Interim management represents another, far more practical side of hotel consulting.
It is often the solution hotel owners turn to when an organisation needs experienced leadership without permanently changing its management.
The owner remains in control while bringing in an independent executive to stabilise the business, implement change, and get the job done—free from the politics that can sometimes accompany an internal appointment.

Let me tell you about the Empty Castle – an interim hotel management project.

It was a bitterly cold winter night.
My first evening at a hidden castle in the countryside of a Central European country, seemingly in the middle of nowhere, I started an interim management assignment.

There were no guests. No restaurant. No reception.
By early evening, the few remaining staff wished me goodnight, locked the front door behind them, and drove home.

I was alone. Completely alone. In a castle.
Outside, the wind swept across the plains. Inside, old wooden floors creaked beneath centuries-old ceilings.
Doors seemed to settle of their own accord.
Every corridor appeared to amplify the sound of the wind.

Like many people, I had seen “The Shining“.
Before going to bed, I quietly placed a chair beneath the bedroom door handle.
Just in case.
Nothing happened, of course.

The following morning, daylight transformed the castle into exactly what it really was: one of the most beautiful hospitality properties I had ever seen.
But it also revealed something else.
The castle wasn’t haunted.
The business was.
Not by ghosts, but by history.

This particular castle had never really needed to function as a commercial enterprise.
It had served as a private retreat, entertaining family, friends, and invited guests through hunting weekends, gourmet experiences, and country-house hospitality.
It was magnificent.
But it had never been designed to compete in the marketplace.

When commercial self-sufficiency became necessary, the symptoms were obvious.

  • Weak cash flow
  • Inconsistent occupancy
  • An organisation built around tradition rather than demand
  • A product that appealed to everyone in theory, but to nobody in particular

It would have been easy to focus on the hotel.
Instead, I asked a different question.
The same question I had first learned to ask years earlier while managing “the gourmet restaurant that happened to have rooms“—a story for another time.

What business should this castle actually be in?
Or, applying real-estate terminology applied to hotels: What is its ideal Highest-and-Best-Use?

The long – cold – winter evenings left plenty of time to think.
Not about how to improve the hotel, but about what business the castle should actually be in.
The answer wasn’t accommodation.
It was experience.

We got to work!
Together with a remarkably committed local team of chefs and service staff, reception and housekeeping team, and estate maintenance team, we created a dedicated MICE proposition, and I spent my days knocking on doors in nearby cities, introducing the castle directly to companies that had never considered holding meetings there.

For readers unfamiliar with hotel terminology, MICE stands for Meetings, Incentives, Conferences, and Events.
Despite the name, no castle mice were ever considered a culinary speciality.
Our chef would never have forgiven me.

Weekends became something entirely different.
The castle already hosted beautiful weddings.
Instead of selling guestrooms, meeting rooms, and restaurant meals separately, we stopped selling components altogether.

We began selling the entire estate.

“Rent a Castle”

For one weekend, the bride and groom didn’t simply reserve a venue.
They became the prince and princess of their own castle.
Their families occupied the estate.
The chapel. The gardens.
The dining rooms. Everything.

Commercially, it changed almost everything.
Bundling the experience improved pricing, simplified operations, concentrated labour, reduced energy consumption and transformed the economics of running such a large historic estate.

Behind the scenes, we rebuilt the management systems as well:

  • USALI
  • Cash-flow management
  • ERP
  • Business intelligence
  • Food and beverage; not just marketing context, but cooking and service flow, purchasing, storage, wastage, pilferage, FTE, COS – all of it
  • Sales representation in the key feeder markets
  • Marketing cooperation with the estate’s winery

Slowly, almost quietly, the castle began to stand on its own feet.

Eventually, I handed the operation over to a professional General Manager who successfully continued the repositioning and further developed the business.
A wonderful gentleman, professional and courteous, and principled; one of the few hotel managers on my list I will call for help.

Looking back, I sometimes smile at that first night.

The chair under the door was protecting me from imaginary dangers.
The real challenge wasn’t hidden in dark corridors.
It was hidden inside the business model.

Over the years, I’ve discovered that this is true of many organisations.

The problems that keep leaders awake at night are rarely the ones that threaten the future of the enterprise.

The real challenge is usually something much quieter.

Understanding what business the organisation is truly in.
Only then can you begin to build something strong enough to last.

Thank you for reading my story.

This story is part of a series—”The Banana Republic Hotel and What It Taught Me About Myself”—in which I share lessons learned throughout my professional and personal journey and how those experiences have shaped my thinking and led me to develop my own principles.

If you enjoyed reading the story and have the appetite to read another one, you are invited to visit G&A’s website, in particular its INSIGHTS page, where you can find all stories.
Alternatively, click here to be taken to the next story of this series.

I hope it has provided some food for thought, encouraged curiosity, and inspired you to keep learning.

Curiosity, humility, and continuous learning remain among the most valuable tools we possess.

Terminology for non-hoteliers:

  • SOP: Standard Operating Procedure – a documented process describing how a task should be performed to ensure consistency, quality, and compliance.
  • KPIs: Key Performance Indicators – measurable indicators used to monitor performance and progress against objectives.
  • ADR: Average Daily Rate – the average room rate paid by guests.
  • RevPAR: Revenue per Available Room – a measure combining occupancy and room rate to assess hotel revenue performance.
  • Occupancy: The percentage of available rooms that are occupied.
  • DOF: Double Occupancy Factor – the average number of guests staying in each occupied room. A DOF of 1.0 means every occupied room has one guest; 2.0 means every occupied room has two guests.
  • AGC: Average Guest Check – the average amount spent by each guest in a restaurant, bar, or other food and beverage outlet.
  • CRS: Central Reservation System – the central booking system that manages a hotel’s room inventory, rates, and reservations across all sales channels.
  • PMS: Property Management System – the software used to manage reservations, guest accounts, and hotel operations.
  • OTA: Online Travel Agency – websites such as Booking.com or Expedia that sell hotel rooms on behalf of hotels.
  • GDS: Global Distribution System – a worldwide booking network used by travel agents and corporate travel departments to reserve hotel rooms, flights, and other travel services.
  • CRM: Customer Relationship Management – systems and processes used to manage guest relationships and marketing.
  • F&B: Food & Beverage Department – all restaurant, bar, banquet, room service, and catering operations within a hotel.
  • Half-Board: A hotel meal plan that includes breakfast and one additional meal each day, usually dinner. Drinks other than those specifically included are generally charged separately.
  • MICE: Meetings, Incentives, Conferences and Events – the hotel business related to corporate meetings, conferences, exhibitions, and incentive travel.
  • ERP: Enterprise Resource Planning – an integrated software system that connects key business functions such as finance, procurement, inventory, human resources, sales, and reporting into a single platform.
  • USALI: Uniform System of Accounts for the Lodging Industry – the internationally recognised accounting standard used by hotels to measure and compare financial performance.
  • GOP: Gross Operating Profit – the operating profit generated by the hotel before management fees, rent, financing costs, depreciation, taxes, and other non-operating expenses.
  • EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation – a widely used measure of an organisation’s operating profitability.
  • COS: Cost of Sales – the direct cost of producing the goods sold, such as food, beverages, or merchandise, expressed as an amount or percentage of revenue.
  • FTE: Full-Time Equivalent – a standard measure of staffing that converts part-time and seasonal employees into the equivalent number of full-time employees.

About the Author

Raoul Gransier is a Senior International Adviser and owner-focused hotelier with more than 30 years of operational and advisory experience in hospitality, tourism, governance, and performance improvement.

Website

https://gransier.com

/by

The Gourmet Restaurant That Happened to Have Rooms

The Gourmet Restaurant That Happened to Have Rooms

This story is about the “Highest-and-Best-Use” (HBU) for hotels.

Forget about “location, location, and location” and possibly licensed branding.
It’s all about market positioning, and you really do not need a licensed brand for this.

The hotel was a little gem just outside the city center and a member of the Small Luxury Hotels of the World.
And while it appeared lovely, it was bleeding from every pore.

The hotel was incurring losses.
It served the wholesale market rather than the high-net-worth individuals it should have served.
Every month was a struggle to meet debt service, payroll, and suppliers, which invited a series of opinions.

By the time I became the hotel’s General Manager, I thought I understood commercial hotel management.
Revenue management had become one of my passions.
I could read a profit and loss statement with confidence and knew how occupancy, ADR, and RevPAR worked together.
To me, commercial success meant improving the rooms department’s performance.

Ownership appointed an external consultant to supervise the hotel.
He held no formal position within the hotel, yet he exercised considerable influence over its direction.
We could hardly have been more different.
His style was demanding, confrontational, and uncompromising.
We challenged each other constantly.

Despite our differences, he possessed an extraordinary commercial instinct.
One day, he proposed something I considered almost reckless.
“We are no longer going to run a hotel with a restaurant,” he said.
“We are going to create a gourmet restaurant that happens to have rooms.”

I disagreed completely.
The destination was becoming increasingly competitive.
In my mind, the obvious answer was better revenue management, stronger pricing, and higher occupancy.
Why would we deliberately invest in a restaurant that might never generate a meaningful profit?

Rather than trying to convince me in a meeting room, he took me into the city.
For several days, we visited the city’s finest restaurants.
We observed how they welcomed guests.
We studied their menus.
We watched how people lingered long after dinner had finished.

During those visits, he quietly recruited several of the city’s best chefs to join our hotel.
When they arrived, I looked at the payroll in disbelief.
It felt as though we had more chefs than cooking stations.
Salary costs exploded.
Food costs increased sharply.

Many nights, I wondered whether this experiment would end my career.
Yet once the decision had been made, I accepted that my responsibility as GM was no longer to debate the strategy.
My responsibility was to make it succeed.

Together with the team, we transformed the guest experience.
We introduced evenings built around music and local social life.
At the end of lunch, every lady received the rose that had stood on her table as a farewell gift.
It was a small gesture, but guests remembered it and talked about it.

One evening, we introduced something we called the “Chef Catwalk.”
The entire kitchen brigade walked proudly through the restaurant carrying their signature dishes as though they were models on a fashion runway.
It was unexpected. It was theatrical.
People loved it.

Local residents began to visit not simply for dinner but because they wanted to be part of what was happening.
Television crews interviewed well-known personalities in the restaurant.
The hotel developed an identity that reached far beyond accommodation.
For the first time, I understood that people were no longer buying a room.
They were buying a story they wanted to become part of.

The restaurant itself never became a major profit centre.
In fact, after all the investment, it only just managed to break even.
Ironically, that was never its real purpose.

The restaurant changed the perception of the entire property.
Our rooms’ guest mix improved. Booking patterns changed.
Guests no longer chose us simply because we had available rooms.
They chose us because they wanted to belong to something distinctive.

The stronger accommodation performance that followed improved the hotel’s annual gross operating profit by 382% within two years.

Looking back, I realised my thinking had been incomplete.
I believed the rooms were the business because they generated a higher profit margin than the restaurant.
They weren’t.
Revenue management remained essential, but only after we had answered a more fundamental question: what was the highest and best use of this particular property?

The business was creating a destination that people actively wanted to experience.
The rooms simply became part of that experience.

I cannot claim the original idea as my own.
It wasn’t.
I can claim to have learned one of the most important lessons of my career.
Sometimes the greatest contribution a leader can make is not to have the best idea.
It is to recognise a better one, make it their own, and execute it with complete conviction.

This project taught me that numbers optimise performance.
They do not define purpose.
Before improving a hotel’s KPIs, you first have to understand what business the hotel is truly in.
Only then do the numbers tell you whether your strategy is working.

Thank you for reading my story.

This story is part of a series—”The Banana Republic Hotel and What It Taught Me About Myself”—in which I share lessons learned throughout my professional and personal journey and how those experiences have shaped my thinking and led me to develop my own principles.

If you enjoyed reading the story and have the appetite to read another one, you are invited to visit G&A’s website, in particular its INSIGHTS page, where you can find all stories.
Alternatively, click here to be taken to the next story.

I hope it has provided some food for thought, encouraged curiosity, and inspired you to keep learning.

Curiosity, humility, and continuous learning remain among the most valuable tools we possess.

Terminology for non-hoteliers:

  • SOP: Standard Operating Procedure – a documented process describing how a task should be performed to ensure consistency, quality, and compliance.
  • KPIs: Key Performance Indicators – measurable indicators used to monitor performance and progress against objectives.
  • ADR: Average Daily Rate – the average room rate paid by guests.
  • RevPAR: Revenue per Available Room – a measure combining occupancy and room rate to assess hotel revenue performance.
  • Occupancy: The percentage of available rooms that are occupied.
  • DOF: Double Occupancy Factor – the average number of guests staying in each occupied room. A DOF of 1.0 means every occupied room has one guest; 2.0 means every occupied room has two guests.
  • AGC: Average Guest Check – the average amount spent by each guest in a restaurant, bar, or other food and beverage outlet.
  • CRS: Central Reservation System – the central booking system that manages a hotel’s room inventory, rates, and reservations across all sales channels.
  • PMS: Property Management System – the software used to manage reservations, guest accounts, and hotel operations.
  • OTA: Online Travel Agency – websites such as Booking.com or Expedia that sell hotel rooms on behalf of hotels.
  • GDS: Global Distribution System – a worldwide booking network used by travel agents and corporate travel departments to reserve hotel rooms, flights, and other travel services.
  • CRM: Customer Relationship Management – systems and processes used to manage guest relationships and marketing.
  • F&B: Food & Beverage Department – all restaurant, bar, banquet, room service, and catering operations within a hotel.
  • Half-Board: A hotel meal plan that includes breakfast and one additional meal each day, usually dinner. Drinks other than those specifically included are generally charged separately.
  • MICE: Meetings, Incentives, Conferences and Events – the hotel business related to corporate meetings, conferences, exhibitions, and incentive travel.
  • ERP: Enterprise Resource Planning – an integrated software system that connects key business functions such as finance, procurement, inventory, human resources, sales, and reporting into a single platform.
  • USALI: Uniform System of Accounts for the Lodging Industry – the internationally recognised accounting standard used by hotels to measure and compare financial performance.
  • GOP: Gross Operating Profit – the operating profit generated by the hotel before management fees, rent, financing costs, depreciation, taxes, and other non-operating expenses.
  • EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation – a widely used measure of an organisation’s operating profitability.
  • COS: Cost of Sales – the direct cost of producing the goods sold, such as food, beverages, or merchandise, expressed as an amount or percentage of revenue.
  • FTE: Full-Time Equivalent – a standard measure of staffing that converts part-time and seasonal employees into the equivalent number of full-time employees.

About the Author

Raoul Gransier is a Senior International Adviser and owner-focused hotelier with more than 30 years of operational and advisory experience in hospitality, tourism, governance, and performance improvement.

Website

https://gransier.com

/by

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