Consequences in hiring and leadership in tourism, travel, hospitality and related industries – by Richard Adam, Chief Executive OPTIMIST, NED Board Member, Strategist, Intl. Developer (Destination, Resort, Real Estate). First published at Linkedin.
“Not again. Not another depressing Covid-19 business analysis!”. In case you reacted to the title in this way, this article is written for you. As a business veteran in the tourism, travel and hospitality experience industry including the development of destinations, leisure venues and commercial properties, I have always tried to capture the industry intellectually, consistently taking the customer experience perspective, long before I was confronted with the harsh realities of the pandemic. Even more so, I am trying to look under the surface of the obvious at the beginning of this new era after the comfort zone of decades of growth and prosperity. For many industries, in terms of future market shares in supply and demand, cards are being re-shuffled.
As the summer travel season is starting in some parts of the world, the managers of destinations and service providers are trying to surpass each other´s marketing efforts with the same narrative: “We are open for business again”. This is an attempt to nurture the illusion that nothing has changed, and that the virus is gone, except with the ramped-up emphasis on safety, hygiene and sanitation. Even then, reopening attempts are a minor step. Recovery is a longer journey in unchartered waters where previous navigation routines might be misleading.
Now, much has been said and written about the consequences in this context and I am not going to say the same things again. However, I would like to emphasize the consequences in required core competencies that could potentially lead to different approaches in the human resource and management sector, most particularly in the selection and hiring of new team members or managers and in the leadership qualities required to gain competitive advantages.
If you have been observing the current communication within the business community, no matter what industry, the narrative is mostly about re-opening and restoration. My radar certainly does not detect everything published on the subject, but if a company would step up and state that “this is what we have learned and this is what we are going to do differently now” (beyond health prevention and hygiene measures), I would find that most refreshing.
Haven´t we all heard a hundred times that people make the difference? The travel, tourism, hospitality and related industries certainly are a people business, as they provide experiences for travellers, visitors or guests, using the skills of many trained service providers. Although digitalization plays an increasingly dominating role in those sectors, the actual experience people pay for is not happening in cyber space. It is real, involving human encounter and traveller or hospitality concepts that actual people have created and are executing.
However, after decades of growth, Covid-19 certainly was more than the blow of a temporary lock-down. It most probably will be a substantial rib in the fabric of the industry and a game changer.
In October 2019, I published an article on the developments in the global hospitality industry, as seen from the perspectives of hotel guests, but in particular from the perspectives of real estate owners and investors. That article obviously hit a nerve (see here).
Now, with the focus on changes in needed core competencies and leadership, this article is the next chapter in a Post-Covid-19 global tourism or hospitality story.
Over decades, the increase of hotel concepts and labels from global hotel system providers based on asset-light strategies, the business with income generated primarily from management and royalty fees, grew as the preferred business model. It worked so well that the franchise salespeople of large hotel groups (which I prefer to name hotel system providers – HSP) were called “developers”. However, many of these “developers” had never actually sweated through the journey and pitfalls of taking a greenfield concept to a viable traveller, guest or visitor experience, with all the steps needed along the way. These HSP-companies no longer served the needs of hotel guests, as their revenue was coming from hotel owners and operators. Therefore, starting out in hospitality management and ending in labelling or franchise sales, they might have lost sight of customer needs. Over more than 20 years, the hotel giants like Marriott, Accor, Hilton, IHG and some of their followers have consistently created a generation of executives of which a vast majority has never been exposed to any other strategy or business model then selling services and labels to real estate owners and operators. Some are sharper, some are more aggressive, but when these managers move on to a competitor, the business approach leading to an asset light strategy is the same. That is why these corporations struggle when it comes to real substantial innovation, strategic shifts or disruption. Rolling out a new campaign or another segment label is the foreseeable reaction.
I suggest you do a little test here: Find a recent promotional add or clip of one of these corporations and, in your imagination, simply replace the logo with a competitor´s logo. Does it generate the same level of credibility or does it even make a difference?
As these practises came to a state of saturation already before the pandemic, we will most probably see a shift in the type of investments made in the foreseeable future. Investors will be less focused on property (hospitality, leisure, retail, etc.) and may start taking a closer look at other opportunities, e.g. in medical, health, pharmacy, MedTech, FinTech etc… Alternatively, opportunistic investors will get involved in distressed properties and take advantage of the situation by negotiating new terms and conditions against operators, also protecting themselves from a similar crisis in the future. I sincerely hope that this will be temporary, and I strongly believe that tourism and related investments will reach interesting returns again, but we must all agree that this will not be tomorrow and probably not in 2021 either. Just as most businesspeople, including myself, could never have imagined before a global lock-down of the world´s travel and tourism sector, there is an increasing number of people today who can imagine this happening again.
The interesting observation in the current Covid-19 reopening phase is that most of the global hotel system providers were demonstrating their usual reactions of rolling out new promotion campaigns, focusing on hygiene, safety and sanitation on an international scale. We can certainly agree that these aspects will be more and more at the forefront of concerns when going places (along the entire visitor journey, not just in hotels alone). However, unless you have to travel, these efforts are not the driving motivator for travelling. It seems that the global hotel system giants are now replacing the concept of hospitality with “hospitalization”. The practical issues, however, e.g. what will be offered instead of the buffet breakfast or the kind of entertainment in lively bars and how these can still be enjoyable experiences, are left unanswered and subject to the individual hoteliers. What we know is that all operational processes, from luggage handling to F&B to cleaning rooms, gyms and pool areas etc. need highly cost-effective scrutiny while initial demand is slowly building up primarily from domestic travellers, making hotels which depend on international source markets suffer severely. Because it is foreseeable that business will be primarily local (although distributed globally mainly by OTAs) in the times ahead, the competitor is the property down the road or the real fact-based value proposition and not another “brand” (should that ever have been the case anyway). The old saying “all business is local” has suddenly regained importance in this new light.
Consequently, taking safety and hygiene as given elements, individual hospitality talent will make the difference in creating rewarding guest experiences and not the evangelists of corporate procedure manuals. Technocratic guidelines on how to provide memorable hospitality experiences were weak already before the pandemic. Now, hoteliers not only need to reinvent many of their offerings, they also need to develop new approaches designed to regain and retain guests (other than the known loyalty programs) and this requires a new breed of talent, especially if the hoteliers were used to following and implementing technocratic brand standards until now. Although not all destinations and hotels were doing well at their respective categories over the last 20 years of growth and prosperity, recovery, disruption and turn-around competencies or relevant experience were in demand only as exceptions. Now, they are the rule of the day.
A well-managed hotel, similar to well-organized travel and other service providers, normally flourishes with the success of a popular destination. Only very few hotels and resorts on the planet have the reputation and strength to attract travellers purely based on the guest experience they can provide.
The concept of delivering the best possible visitor experience remains essential. Hotel managers want their guests to have a memorable experience from the moment they arrive. Nobody wants to step into a nightmare immediately outside hotels or to have unexpected difficulties getting there.
I recently published an article on consequences for travel destinations and their governance, management and development strategies in Pre- and Post-Covid-19 times. I invite you to read the article and consider the following reflections on needed core competencies in the Post-Covid-19 period as a continuing guide for destination management or even re-development strategies.
In a nutshell, decades of growth due mostly to external factors, which were taken for granted, have spoiled many travel destinations and made tourism officials focus mainly on promotion – as well as on self-praise efforts to a certain extent – while neglecting a continuous improvement of the visitor experience. These days, tourism and travel destinations worldwide are in a serious state of crisis, one that that nobody has ever experienced before. Especially after decades of growth and “gold rush” times, there is little to no human capital with much experience or accomplishments in recovery, turn-around and restructuring. It all starts with the people in charge, those who have access to the resources and give directions. The “pure promoter” profile of management has become obsolete, almost within weeks.
Consequences for Recruiting, Selection and Leadership
Thinking positively, I am convinced that a hiring wave will follow the disastrous consequences of lock- downs and redundancies which probably hit the travel, hospitality and tourism industry harder than any other sector. This extreme situation is the result of the fact that you cannot store service, travel or accommodation capacities and that supply, as well as demand, will still be limited for quite some time. The question seems to be, whether the period ahead needs the same type of people and competencies we have seen in decades of continuous growth – occasionally paired with management negligence in anticipated comfort zones.
As a seasoned “fire fighter” through my work in the relevant industries with executive experience and insights collected through assignments on 4 continents, I have developed my own strategy in selecting and hiring key talent at both line and management levels. In 25 years of having influence in the selection and hiring processes for several hundreds of people, I can count on the fingers of one hand the candidates who did not work out. Then again, my practise is quite different to the mainstream methods and relatively time consuming, although for my assignments, it always paid off. In reviewing CVs, I look at whether they tell a story (not necessarily whether the candidates have done exactly the same job or task as the position calls for), I talk with as many candidates as possible, especially when it comes to those who would have direct reporting positions, preferring long lists instead of short lists, as documents seldom tell you enough about entrepreneurship, strategic or social intelligence, analytical skills, the candidate´s ability to formulate complex scenarios in clear sentences, the balance between task- and result- orientation, problem solving skills, potential, loyalty, spirit, honesty, integrity, reliability, ego control, structured approach to managing situations, drive, ambition … and having a sense of humour. Documents tell you about previous technical experience, which becomes less relevant after a few months of orientation anyway. Personality and attitude remain relevant assets through the whole employment history.
When the sun is out and the sea is calm, most people look good in keeping a steady course. Stormy weather and navigating in unchartered waters bring up true talents and resilient attitudes – or uncover fatal gaps. Top executives not only need to fill boxes with people for jobs to be done, they are also the curators of the company spirit and values – in one way or another, make or break. Along with discipline, a lasting cohesive positive spirit will be key in the critical times on the horizon.
Having said that, from my perspective, I have realized what decades of comfort zones and natural growth in this industry have done to recruitment and selection practises. When new recruiting waves should emphasise the spotting and onboarding of currently required competencies, it might be reasonable to rethink common habits in recruiting, selection and leadership.
To that point, here are a few myths and widely common practises that might need to be questioned:
- “I only have time to spend 6 seconds on average for initial CV screening”
Of course, I do understand the situation of HR people and recruiters with hundreds of CVs flowing in day by day, but I don´t accept that as an excuse. Understanding this, you can spot, whether the candidate has technical experience for doing a certain job. However, you cannot see beyond that experience, especially in terms of the candidate´s values, which I would emphasise the most. Recruitment has become a box-ticking exercise based on buzz words, the initial screening often delegated to young graduates or, even worse, to ATC computerized processes. I fully agree that for certain roles, this is good enough, but for many roles and positions, based on that practise, you throw away talent into the bin. Even more so, it is a lost opportunity, especially if the buzz words were the wrong ones as you can never foresee what kind of potential and talent might be knocking on your door. Whoever completely disagrees with me here, should certainly not mention the phrase “We are in the war for talent” anymore. In particular this applies to hiring managers who are too busy to dig into all the relevant candidates at hand and only want to see two or three profiles. They should rather skip a lunch and take the time to look for the best: not only the candidates who can do the job or fill a gap, not the ones who come closest to the defined buzz words and stereotypes, but the ones who can generate the best possible value for the company, the ones who can make a difference. I am often surprised and disappointed to see executives spend time in endless or useless meetings, luncheons or conferences, rather than dedicate significant time to the selection and careful handling of the primary assets of a company.
- “Only candidates meeting the criteria will be notified”
There are two reasons why this practise can backfire and, in many cases, does.
First, an employer represents a brand and a successful brand represents a set of spirit and values, not just design standards and narrative guidelines. HR or contracted recruiters also represent this brand. If respect and mindfulness are part of these brand values, a company should respond to all applicants with an initial confirmation and a notification that the process is completed. In the digital age of automatization, there is no excuse why this cannot be done, even for a large number of applicants. Again, in a “war for talent”, it could be considered poor practice not to do so. Even worse so when the candidate eventually gets bombarded with newsletters or spam from this particular company.
Secondly: you always meet people twice in your professional world. Unsuccessful candidates can move on to competitors, can become customers or gain influence in other areas relevant to the company. In today´s ever-changing world of shifts in ownership structures or alliances, mergers and acquisitions, yesterday´s bad impression can make a lasting impact. Instead, if a company treats candidates with respect and delivers updates in the selection process, you can even gain an unsuccessful candidate as an advocate, especially when he or she is able to understand why they did not cross the finishing line ahead of the others. Professionals can live with a “No, thank you!” but professionals also want to understand the reason for the “No”, for their own analysis and improvement. There is a risk that, when HR people and recruiters coming across arrogantly and do not handle the process well, they could damage the company´s reputation, as the recruiting process is an important experience that the company shares with the outside world through its applicants.
- “He/she worked for (…big name…) so he/she must be good”
People – including myself – occasionally fall for illusions. A high-profile company name on a CV or business card often stimulates the idea that people from this company might be better than candidates from lesser-known companies. If you were a marketing manager involved in campaigning for a top-selling product, your ego might tell you that you are better than the person who has a slightly tougher job selling a more challenging product. Glossy names can be fatally dazzling, as they do not say anything about the real impact and role that this particular candidate personally had in a success story. I prefer candidates who can demonstrate real personal impact, analytical and lateral thinking problem solver, who assume responsibility and surpass other candidates who were only fortunate to ride on a wave of lucky circumstances or coincidence.
In times when recovery is first on the agenda, failures are often a good learning experience. Getting your teeth kicked in when involved in a failed attempt may teach you more than somehow participating in successful cases. Although I agree that storytelling has an influence in the hiring game, I also believe that there is no great personality with an easy past. Again, in Post-Covid-19 times, we need less “dazzlers” and more people with proven accomplishments dealing with critical tasks and great attitude when the going gets tough. During the decades of growth, many people have never experienced a crisis, so very few can cope with and manage the needs of recovery, re-structuring and turn-around.
- “We had a very good mutual understanding of what needs to be done”
Sure, this is a sticky issue. You cannot afford to work with people constantly arguing and debating with you or between themselves. In most operational roles, there should be a minimum of constructive debating among team members and managers. But then again, forget about your ego for a while. Hopefully, you do not want to hire a CV profile, you want people with brains and a professional opinion too. You are expecting resilience? Then, you better be resilient as well. I have seen interns come up with amazing proposals and solutions that nobody within the ranks of the more experienced thought about. Did I overrule the opinion because it came from “the intern”? No, I did not. I encourage everyone to create ownership of a common mission and forward thinking certainly is an essential part of creating that ownership. Therefore, I like to challenge candidates in interviews, and they score points if they challenge me in return, in a constructive way. Remember: “Leaders who don’t listen will eventually be surrounded by people who have nothing to say” (unknown).
There is a human tendency to sympathise with people with whom you have something in common. For hiring managers, this can be a similar career or background, same school, country of origin, “buddy network”, belief, experiences or common previous employer and often leads into hiring stereotypes. People feel comfortable with conformity. Sometimes, it is just pure vanity. In psychology this is called “the Groupthink Phenomenon”. But then again, if two people constantly share the same views, one of them becomes useless. Diversity is not reduced to gender or ethnical categories or age. The real value of diversity is in different views and contributions. Also, experience can have two different manifestations. On the one hand, when it comes to narrow-minded people their experience can be a burden to the company (and for themselves). However, if an organization can unlock the broad experience from open-minded seasoned professionals still retaining the ability of constant learning and de-learning, it can save tremendous time and money, eventually becoming a business life saver.
As in post-Covid19 times, re-engineering and re-design of processes and services will be crucial, you don´t need people who are lost without the corporate procedures manual or who are just waiting for others to provide solutions. You will need people who would be able to reinvent the wheel if necessary or to fix the plane while it is flying.
- “We have our strategy in place. Not your concern”
It´s always amazing when company representatives tell you that they had one of the “big name” consultancies involved in developing “their” company- or business strategy. Having worked in a relevant top-tier strategy consultancy myself, I know there can be great value in bringing in new thinking from the outside. However, that is only half the truth. In the world of tourism, travel, hospitality and probably in other industries as well, there is no shortage of strategy documents and “power point charts” outlining what should be done next. There is simply a lack of execution. This lack of execution starts with lack of ownership. Especially in the corporate world, strategies are hardly well-communicated and transformed into actions, as they are mostly discussed in executives´inner circles. In many cases, they are empty phrases for the majority of the team members and company employees. One essential requirement for the success of a strategy is implementation, which only works when each team member knows her or his specific role within that strategy, along with a few of the KPIs that they need to deliver. To achieve this, ownership is key, and, as a consequence, so are participation and feed-back. In post-Covid-19 times, it may not be necessary to throw everything overboard in what was once a sound long-term strategy. However, a few fundamental things will certainly need to be adapted in such a way that everybody knows what to do differently. You get very different results, depending on your approach: either giving orders to subordinates or sharing ownership of the strategy and winning them over to really engage them to go the extra mile.
Pre- and Post-Covid Paradigm for Core Competencies
Here I can safely assume that the pandemic is forcing and accelerating existing trends rather than creating them. This applies to digitalization, working remotely and increased health concerns. Additionally, the situation creates a massive blow for the travel, hospitality and tourism industry falling from decades of growth and prosperity into a state of shock. Within a couple of weeks, there are financial disasters due to lock-down, a potential recession threat and a difficult to foresee perspective for recovery. While in times of growth certain competencies or practises are in demand and some weaknesses are not that obvious, recovery requires a different approach; strategically, financially and operationally. Consequently, this includes the need for different competencies and considerations that may have been neglected in times of flying high. In the chart below, I have set certain values or aspects of “gold rush” times against the needs and competencies of recovery times. This is certainly not a complete listing. The basic purpose is to visualize the way that times have changed and so have general conditions, which need to be addressed by a different approach, a different mindset and different priorities.
An experience from my professional archives and resulting conclusions
In the last ten years, among other adventurous missions, I had various development and trouble-shooting assignments in South East Asia. In terms of leadership, being at the helm of a post-merger integration of two different companies, each providing luxury services in three different countries (river cruises, hotel ships, excursions, etc…), was one of the most exciting and challenging missions I have had. Demand was high and forecasts were excellent, the challenge was not in providing a strategic shift or turnaround, but, operationally, the two companies had very different approaches to business, no real structured management system and no reliable controlling systems. The most challenging aspect was that each of the two companies was dominated was dominated by different groups of different ethnical origin. There were conflicts in their countries´ long and strife rich histories, which were not completely forgotten. Now, from a professional viewpoint, what I had to do seemed logical and easy – on paper: streamline operations, establish common standards and procedures and a controlling system which provided the company with reliable data. But to see this through with this structure at hand was the real challenge. Post-merger situations normally are times of disorientation for the workforce and hanging on their usual habits and practises was a natural reaction. Change management starts with building confidence. Establishing a firm leadership and, at the same time, creating ownership were the make-or-break determining factors in this situation. Here, the effort of identifying the people with the right potential, developing them and making them engaged in multiplying a cohesive spirit of ownership was the most rewarding result, finally, helped to achieve the break-through.
According to Confucius, there are three methods we may learn wisdom: ‘First, by reflection, which is noblest; Second, by imitation, which is easiest; and third by experience, which is the bitterest’. It seems experience has taught me the most and without reflection it would not be worth anything.
In South East Asia (and often elsewhere, too), to be effective in your project, you need to crack the most relevant codes of communication with respect to cultural heritage and mentality and create a vision, making everyone part of it (employees generally appreciate coaching with regards to their role within a strategic vision) and furthermore, if you firmly maintain certain principles and discipline, you will have the most loyal, dedicated and engaging associates you can think of. However, if you manage using corporate hierarchy, memos and emails while sitting at your desk, you might not be clearly understood (certainly not in terms of generating ownership!) and, most probably, nothing will happen. People involved will not likely let you know either, for fear of losing face, which is a core issue in Asian societies. More often than not, nothing is really as it seems.
About two years ago, another episode started, which was less successful, at least for one of the parties involved. At that time I was invited to the European head office of a global upscale provider of travel and hospitality related services, mainly hotels plus some rare and appealing other offerings, discussing a potential assignment to look after the assets and developments in their Asia Pacific division. From my previous working experience in Asia, I very much enjoy working in that part of the world.
In the case of this assignment, which we were discussing at that time, my initial research had showed me a few obvious indicators of why the company´s assets in that area did not live up to expectations, although they were outstanding products. Supposedly, the company was not looking for the typical hotelier career background and was interested in a more out-of-the box strategy minded entrepreneur profile, we seemed to be on the same page. At that time, the common business model of international hotel chains based on income derived mostly from management and royalty fees, was wearing out already and the company seemed to emphasise economy of scope rather than economy of scale. So, I was highly motivated, confident and interested. Unfortunately, shortly after the initial discussion, the company including all global assets was suddenly for sale and the discussion became obsolete.
I did not follow up anymore for two years and I did not get any further transparent status updates either. I read about the new owners in the trade press six months later. Coincidentally, just at the time of global Covid19 lock-down, they hired a stereotype “expat profile” with a track record in operating, scaling and replicating the way that the hospitality industry got used to working over a long period of time. This seemingly was a “conformity hiring” decision, at a company where traditional business considerations, mindsets and competencies are most abundant already, at a time, when the world of hospitality is in lock-down and needs innovative disruptive approaches to regain momentum and competitive advantages. In a period when scaling hotel labels had its peak and, due to Covid-19, when investors are expected to look for other areas than new hotel properties, it occurred to me that the company still believed in restoring obsolete practises. They were not performing too well globally already prior to the pandemic and their pipeline of new hotels had been empty for years, even before the lock-down.
The asset light strategy for hospitality companies was wearing out on the demand side already prior to the pandemic and will now be weakened by reduced supply of opportunities in the years ahead. When economy of scale is less promising, economy of scope might be the alternative route to go. But then, service redesign and reinvention or extending the value chain is more relevant than replication.
In all fairness, the executive whom the company hired may still significantly contribute to recovery. However, it reminded me that a few companies might still think that the Covid-19 “rip” was a temporary problem without further long-lasting consequences. Disregarding the detailed facts and assessments behind this observation, which I do not know, the case is suitable to generally illustrate that companies might react slow or not at all to fundamentally new situations, requirements and priorities or do not see the change in requirements in executive profiles. They probably held on to the idea that the international scaling, labelling, replicating and franchising in hospitality (often referred to as management contracts), along corporate guidelines, would go on the same way after the shock, as if nothing substantial had happened and therefore, the type of competence profiles and practises that had worked in decades of growth would continue to remain unquestioned.
Hypothetically, you may ask whether many corporate hotel careers and backgrounds are very similar, therefore conformity thinking is highly pronounced, exposure to drastic strategic shifts over the past decades was relatively low and consequently following old paradigms in tackling recovery is the most likely approach to be expected. To a certain extent, that would be fine with me. I just do not believe that it makes sense to re-build yesterday´s system and thinking over again when this overstressed practise was facing saturation already prior to the pandemic.
This conclusion is not only based on the effects of climate change or the new theories about de-globalization, recession or horizontal growth limitations, it is also based on how we will work and how we will travel, live, eat or sleep and how we will spend our money in the future: differently.
If you agree that the Covid-19 pandemic was more than a temporary disruption, you might also believe in a few lasting changes and consequences for recovery and re-building businesses. Although prejudices and stereotype categories are dangerous and often unfair or not applicable in many cases, it seems to be logical that there is a higher demand for new core competencies on the horizon, which are hardly developed or considered by “corporate soldiers”. In the corporate world, immediately below the top level (sometimes including that level), you quickly learn about the responsibilities of OTHERS and act accordingly as a survival principal (often referred to as “CYA” policies or the blame game). Here, resilience is more often seen in the light of personal career enhancement rather than regarding the welfare of the business or the company. In less structured, often more challenging, entrepreneurial environments, you are constantly forced to re-think what else YOU can do to improve the situation and to create additional values. Your own responsibility in making a positive impact is unlimited. It is the degree of ownership which makes the difference – among a few other valuable assets. These different approaches in tackling the challenges at hand will become obvious in the very near future. Different times demand different rules. Disruptive times generate disruptive answers and in periods of disorientation, the committed “early birds might catch the worms”.
For enquiries and issues in recovery or re-structuring in destination development or related hospitality, travel and leisure services and products, from strategic aspects, offerings to organizational changes and distressed development projects, feel invited to reach out to the author via LinkedIn for an initial discussion. A proven extensive 360- degree experience and a series of accomplishments (incl. “firefighting”) in all aspects of destination or hospitality development, lifecycle, structuring, governance, funding, strategy and execution on 4 continents can bring tremendous value to your project or existing assets.
About Richard Adam
Seasoned international C-level executive and board member in asset management and investment, destination-, resort-, leisure venue-, commercial real estate development and place-making from a 360-degree perspective, from greenfield strategy to delivering viable visitor experience and retention, with working experience on 4 continents and a series of accomplishments in distressed and challenging restructuring or recovery missions, 20 years reporting at board level. Digital advocate, media trained, well-proven public speaker, endlessly curious.
© Richard Adam, Munich, June 2020 – all rights reserved