The Banana Republic Hotel

This is not an article about politics.
It is about a hotel where informal power had gradually replaced formal governance.

It is not a fictitious story, although at times it may read like a thriller.
I have deliberately omitted the hotel’s name and location because this story is not about assigning blame.
It is about the lessons weak governance taught me and why they still matter today.

The Banana Republic Hotel marked a turning point in my career.
There was a time before it, during it, and after it.
It taught me humility.
Looking back, I see not only the organisation’s shortcomings, but also my own.
I am grateful that enough time has passed for me to reflect on both with greater maturity and clarity.

Over the years, I encountered pilferage and corruption that, at times, 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.

One hotel in particular has remained with me throughout my career.
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.

It would be easy to conclude that this hotel was unique. It was not.
Having worked elsewhere in the region, I had encountered similar patterns before.
Many organisations were still carrying the legacy of a different economic system, one in which weak procurement, blurred accountability, and informal relationships had gradually become normal.
As countries embraced market economies, many hotels modernised their commercial thinking far more quickly than they modernised their governance.

By the time I arrived, many comparable hotels had already completed that transition.
They had strengthened controls, introduced transparent procurement, clarified accountability, and left much of that culture behind.
This hotel remained an exception. While others had modernised their governance, many of the old practices still endured here.

The hotel remained independently owned, while its management was governed by a Hotel Management Agreement (HMA).
Corporate standards, reporting procedures and operating manuals had been introduced, yet they rested upon an organisational culture that had never fundamentally changed.
It felt as though new processes had been added without redesigning the operating system beneath them.

This 1,000-bed hotel operated more like a factory than a hotel.
It had developed its own informal economy resembling a small banana republic.
Staff bribed supervisors. The supervisors bribed managers. Managers, in turn, bribed upwards.
Salaries were not what motivated behaviour.
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 local organised crime figures, creating an intimidating atmosphere for guests and employees alike.
One colleague found an elegantly simple solution.
The nearby police station was offered complimentary 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.

Guest rooms served purposes well beyond legitimate accommodation.
At one point, parts of the hotel were rented as filming locations for a series of adult films.
We could not undo what had already been produced, but we immediately stopped any further filming.
It was another reminder that, where governance is weak, organisations gradually lose control over how their assets are used.

The hotel occasionally found itself caught in international political debates because of its ownership structure.
Looking back, I sometimes thought the external controversy distracted from the real story.
The greatest governance challenge was not thousands of kilometres away.
It was unfolding every day on the hotel floor.

As I gradually came to understand, the relationships influencing behaviour extended beyond the hotel’s walls.
The absence of governance was so deeply embedded that, at times, it seemed to extend beyond the hotel itself, making me cautious about how and where I reported what I was discovering.

What was missing was something much simpler.

• Responsibility had become fragmented
• Decision-making had become blurred
• Authority had become ambiguous

In short, nobody owned accountability.

The hotel management company promoted a culture inspired by family values, spirit, and bespoke authenticity.
It had engaged highly capable professionals who genuinely believed in the standards, processes, and services defined in the Hotel Management Agreement (HMA).
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 HMA seemed strangely disconnected from everyday operations, almost like E.T. the Extra-Terrestrial, far from home.
The language spoken in boardrooms bore little resemblance to the behaviours I observed throughout the hotel.

On paper, the hotel appeared professionally managed.
On the hotel floor, a completely different operating system was at work.
The agreement described how the hotel should operate.
It did not change the incentives that determined how people actually behaved.

The further I looked beyond the paperwork, the clearer the pattern became.
The hotel was not operating without a system. It was operating with two systems.
One was formal, documented in manuals, standards, reporting, and the Hotel Management Agreement.
The other was informal, built on incentives, personal relationships, unwritten rules, and vested interests.
It was this second operating system that determined how the hotel actually functioned.

The difficulty was not that the HMA was wrong.
It was that it remained too general to influence day-to-day behaviour and had been applied from the top down while the informal operating system remained untouched.
It helped identify what was wrong, but not how to put it right.
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 did not want to look too closely.

The hotel had become a banana republic.
It had not started that way, nor did it have to remain that way.
Looking back, I probably should have walked away.
Instead, I chose to confront it.

The team working alongside me did an extraordinary job.
Replacing everyone would probably have been easier, but economic reality dictated otherwise.
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.

Rather than beginning with punishment, I decided to begin with accountability.

Historically, the management team had received unofficial bonuses to compensate for unrealistically low salaries.
The arrangement had become accepted practice.
Instead of simply condemning it, I increased management salaries to an appropriate level and made remuneration transparent.
In return, I expected every department head to accept full responsibility for their department.
Departmental management was no longer financially dependent on participating in the hotel’s informal reward system.
That changed behaviours almost immediately and led to further, sometimes uncomfortable, corrections in the way the hotel operated.

Departmental managers were trained to understand their departmental KPIs.
Responsibility migrated to where decisions were made.
As a result, I 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, department managers initiated the analysis, identified the cause, and implemented corrective action themselves.
That allowed me to spend less time exercising control and more time providing leadership.

We eliminated inappropriate use of the hotel store.
Rather than banning unaccountable staff purchases through the hotel store, 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.

We chose to work with the trade union rather than around it.
Together with its representative, I presented the hotel’s performance to the staff each month in language everyone could understand.
Sharing reality fostered a shared sense of ownership.
Gossip and speculation gradually disappeared.

I was invited by a leading newspaper to be interviewed.
Such interviews are often used to promote the hotel.
I chose a different route. I asked the journalist to interview my 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, I insisted on transparent pricing and encouraged them to use the additional income to reward their own employees fairly.

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, I gradually tightened payment discipline while reducing wholesale allotments.

Food and beverage 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 my relationship with the trade union.

Leadership also meant accepting that not every operational inefficiency should be eliminated automatically.
For example, I disliked the twelve-hour reception shifts.
They 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-workweeks that allowed several receptionists, many of them single mothers, to balance work and family life.
I could have changed the rota. Instead, I 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.
I 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 rather than autocracy.

We worked closely with the trade union to develop a shared understanding of the challenges and to negotiate a new collective labour agreement.
We shared a common objective: to create a transparent organisation, improve salaries and benefits for employees, and, at the same time, align staffing levels with a more efficient operating model.
To demonstrate that the changes were based on principle rather than personal gain, I volunteered to waive my performance bonus.
Many members of the departmental management team chose to do the same.
We were close. The concept had been agreed upon, reviewed by legal counsel, the budget aligned, and the contractual details largely resolved.
The trade union and the hotel management team were ready to move forward.
The hotel wanted the change. The trade union supported the change. The local management supported the change.
But governance ultimately resides higher in the organisation.
When accountability breaks down at the top, even the strongest local commitment has its limits.

The hotel ultimately achieved a significant turnaround.
It was not driven by major capital expenditure.
It was driven by changes in culture, accountability, market positioning, and management discipline.

Ironically, I was no longer there to witness the turnaround.
Change management creates resistance.
Long-established interests rarely disappear quietly.
I left before the full benefits became visible.
In time, the management structure that had opposed many of the changes was itself replaced.
It reinforced a lesson I would carry throughout my career: organisations eventually expose governance failures that remain unresolved.

The real achievement was never receiving the credit.
Others received much of the recognition for the turnaround, and rightly so.
Completing a turnaround is every bit as important as starting one.

Looking back, I have made peace with that.
It was enough to know that the culture had changed.
Those foundations helped my successor complete the journey, something he did remarkably well.

The Banana Republic 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

But if authority is unclear, accountability is fragmented, incentives are misaligned and conflicts of interest are tolerated, those improvements rarely endure.

Looking back, I realised why.
Governance is the operating system of decision-making.
It creates clarity around authority, responsibility, accountability and information flows.
When those become clear, organisations begin to change.

The Banana Republic Hotel became the defining turning point of my professional life.

After leaving, I focused on helping hotel owners, lenders, and investors build organisations that were commercially stronger, operationally healthier, and governed more effectively.
I established my own advisory practice, specialising in organisational and commercial architecture to optimise the value of hotel assets.

My first assignments were, fittingly, connected to the very lessons I had learned at the Banana Republic Hotel.
One came through the valuation surveyor of that hotel, Cushman & Wakefield, acting on behalf of a banking client.
I was asked to diagnose why a leasehold hotel operation could no longer meet its lease obligations.
At the same time, I was entrusted with the commercial turnaround of a historic castle and wine estate on behalf of the family behind Sal. Oppenheim, once Europe’s largest private bank.

Many other assignments followed through Cushman & Wakefield, Horwath HTL, and private equity investors in the hospitality and tourism sectors.
Initially, much of my work took me to Russia, where I helped owners convert former sanatoria into hotels ahead of the Sochi Winter Olympics, and later transition hotels across the Russian Federation from management contracts to franchise operations, enabling owners to retain stronger governance while benefiting from international brands.

The principles I had developed eventually led to my appointment as Sector Team Coordinator for Hospitality at the European Bank for Reconstruction and Development (EBRD).
There, I found myself applying the very lessons the Banana Republic Hotel had taught me years earlier: helping small and medium-sized hotels in developing economies strengthen governance, improve commercial performance, and become more bankable.
I spent eight years in this role, working with hotel owners and management teams across Central and Eastern Europe, the Western Balkans, Central Asia, the Middle East, and Africa.
The assignments took me from capital cities to some of the world’s most remote destinations, including the Pamir Mountains in Kyrgyzstan, an experience I have described in a separate article.

Looking back, I sometimes wonder whether the Banana Republic Hotel was the greatest opportunity of my career, disguised as its greatest challenge.
It taught me that governance is not an administrative function.
It is the operating system that determines whether organisations succeed or fail.

Many of the articles that follow can be traced back to the lessons I learned there.
The Banana Republic Hotel did not simply change my career; it changed the way I look at organisations, leadership, accountability, and ultimately myself.

Those lessons continue to shape the way I work today.

Thank you for reading my article.

This article is about how working in a corrupt environment taught me that governance is the operating system of decision-making—and that real leadership begins with the humility to examine not only an organisation’s failures, but also your own.

This is the eighth of a series of articles—”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.

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.

About the Author

Raoul Gransier is a Senior International Adviser and owner-focused hotelier with more than 25 years of operational and advisory experience in hospitality, tourism, governance, and performance improvement.

Website

https://gransier.com