Lessons in Leadership from Florida’s Largest Independent Hotelier
“Hotels are a service industry, and the key is to have happy associates.”
There are many reasons Harris Rosen, president and COO of Rosen Hotels & Resorts and Florida’s largest independent hotelier, is a masterclass in hospitality leadership: his willingness to take enormous risks, his wise approach to scaling up, and most importantly, his steadfast, decades -long devotion to giving back – both to his employees and his community.
When HITEC was in Orlando, Florida last year, Rosen led a special, bonus session as part of the inaugural HFTP Leadership Excellence Series. In this gripping session, Rosen regaled attendees with anecdotes, lessons and experiences drawn directly from his 40-plus years as a successful and thriving hotelier – and at the end, left attendees with a singular, resounding phrase to guide them in their future careers.
First, some important facts about Rosen, founder, president and CEO of Rosen Hotels and Resorts:
- Rosen Hotels & Resorts boasts seven hotels, 6,338 guest rooms and suites, and over one million square feet of convention space.
- In addition to hotel holdings, Rosen operates a technology company called Millennium Technology Group, an insurance company called RosenSure, and owns a medical center exclusively for associates called The Rosen Medical Center: A Place for Healing and Wellness.
- Apart from being a successful businessman, Rosen is also a dedicated philanthropist, with a foundation that serves children in underserved communities, programs that provide free preschool to children ages 3-4 and college/vocational scholarships for high school graduates, and more.
Keep reading for Rosen’s take on how supporting and rewarding your employees can pay off massively in more ways than one. Then, watch Rosen’s session in its entirety here to learn more about how Rosen Hotels and Resorts got its start, Rosen’s secret to financial success when scaling up properties, the philanthropic programs that Rosen created for youth and underserved communities, and more.
The following was transcribed from the original session recording and may have been condensed/edited for clarity. Please refer to the session recording for the original audio.
Rosen: I have worked diligently to do whatever we can to keep our associates happy.
We have our own medical center. If you work for me, you visit the medical center. If you’re in the hospital, the most you pay is $750 twice a year – after that, you don’t pay anything. One of our associates had a little baby born prematurely. She was in the hospital with her baby for a long time, and the bill was $1,041,000. I know that because I paid for it. She paid $750. If you have a prescription and you go to Wal-Mart, it’s free, 90 percent of the time. If you’ve been with me for three years and you have children in college, I’ll pay their tuition.
About 30 years ago, wanting desperately to lower our healthcare costs, I worked diligently to make that happen. And it worked. I called the insurance company, and they said, “we’ll have your numbers pretty soon.” I got my bill, and my insurance rates went up by 25%. I called. That was a mistake, because we worked diligently, and we lowered our healthcare costs by about 30 percent. Yet, there’s an increase in my healthcare costs. I had to check. “It’s because of the group you are in.” I said, “No, no, no. I’m an independent little hotel guy. I’m not part of a group.”
[The insurance representative] said, “No, we put you in a group.” I said, “I don’t want to be in a group.”
“You don’t have any choice.”
“I guess my choice is not to do it.”
One of the dumbest things I’ve ever done in my life. I had no insurance company. I had no medical center. I have no affiliation with any hospital, any doctor. What have I just done? I said, “Take a deep breath. Number one: let’s get a clinic.”
The accounting office needed more space. And we created a beautiful little clinic there, hiring a nurse practitioner, a physician and an admin. And we were in business. What about insurance? Well, let’s start our own insurance company. We did. One of the finest insurance companies here in Orlando. We had insurance. We had our medical center. What about hospitals? Let’s talk to them.
We’re not afraid to talk. We spoke to the hospitals and made a deal with them. What about all the other physicians. We’ll talk to them. And before long, we had a program called RosenCare®. We controlled our own destiny.
What impact would that have on our healthcare costs? At the end of the first year, we’re on the cover of Florida Trends magazines. why? We’ve cut our healthcare costs by 50 percent – from about $1,400 per covered life to $700 since we started our program. If you compare our cost per covered life with the national average, we have saved our little company over $500 million.
Yes – we’ve had crazy ideas. Have they all worked? No. But we don’t give up.
(The final question of the session) From a leadership excellence perspective, if you were to leave this room with one professional thought or idea to take home, what would that be? What would you say is a phrase to live by?
Don’t ever give up.
HFTP Leadership Excellence Series Returns to HITEC Toronto 2023
Don’t miss the opportunity to learn from an established industry leader at the next “HFTP Bonus Session at HITEC,” taking place Thursday, June 29 at HITEC Toronto 2023. While this session is officially part of the HFTP 2023 Leadership Excellence Series program, it is open for all HITEC attendees to observe. Visit the HITEC website in the coming months to learn more and register for HITEC if you have not done so already. See you in June!
Low Development Costs, High ADRs and Incredible Valuations
Written by: Jay Bhakta
Glamping has taken the hospitality industry by storm over the last few years with developments occurring overnight. These remote-style stays became especially popular over the course of the Covid pandemic, as they offered the distanced retreats and vacation getaways that many craved after lockdowns. Due to the lack of physical structures required, development is rapid and far less costly. However, with the unique service proposition provided, glamping properties are able to charge high ADRs. And, as these properties are valued based on the income approach, their valuations are derived from their cash flow — resulting in incredible returns.
With varying startup costs through different business models, these high returns can be further extended. By making decisions such as buying or leasing land, startup costs can be further mitigated, allowing for a low barrier of entry for new competition to join. With the growth in popularity of online travel agencies, new and existing companies are able to compete in the marketplace without the need for previous brand presence or awareness, further lowering the hurdles of entry. Because of these factors, glamping properties are quickly profitable and scalable.
Innovative hoteliers within the industry are beginning to transform traditional hospitality by better understanding the relationship between investment costs and ADR. Traditional hospitality used to state that investment costs would correlate with the ADR you were able to charge. However, with the newer generation of travelers willing to spend more on experiences rather than materialism, development has been flipped on its head and is rapidly changing, allowing for many new creative opportunities and solutions.
In addition, to the financial incentives provided from lower investment costs and higher returns, the unique selling proposition of glamping includes sustainability, eco-friendliness and an escape from the hustle and bustle of everyday life, while still providing the luxury of comfort. These are just a few of the many reasons people are choosing glamping as their next travel experience rather than a trip overseas. It is important to note that it is not only campers who are choosing glamping, but also travelers who are typically interested in taking vacations in other countries and staying in hotels.
Glamping provides tech and business savvy property managers with many possibilities for creative solutions to improve upon the blank slate due to the lack of proprietary burdens of the traditional hospitality business. Glamping is truly a creative outlet and unencumbered in its naivety. This space is growing rapidly and will see many further innovations that will continue to shape the future. However, it is currently in need of entrepreneurs who will provide centralization and standards to further grow the market, as the current state of decentralization can provide a shattered and messy booking experience.
Stay-tuned to the fine, glamping options that develop over the next several years; or consider an entrée yourself and make it your next business endeavor.
This blog post tied for First Place in the Fall 2022 HFTP/MS Global Hospitality Business Graduate Student Blog Competition presented by the HFTP Foundation. Participants are students participating in the Master of Science in Global Hospitality Business, a partnership between the Conrad N. Hilton College of Global Hospitality Leadership at the University of Houston, the School of Hotel and Tourism Management at Hong Kong Polytechnic University and EHL. The blog posts that received the top scores will be published on HFTP Connect through March 2023. Learn more at HFTP News.
Jay Bhakta is a recent graduate with a Master’s in Global Hospitality Business from EHL Business School with an interest in hospitality asset management, development and operations.
Resources:
BLLA. (2022, August 3). How boutique brands are leveraging strategies to revolutionize the hospitality industry. Hospitality Net. Retrieved October 29, 2022, from: https://www.hospitalitynet.org/news/4111821.html
Three Questions All Hospitality Accountants Should Ask Themselves
Written by: Shane Middleton
“There has to be a better way!” We hear it all the time – even in the accounting department. The truth is that we are always hardwired to want more and better. We are always looking for that miraculous, game-changing “easy button,” not realizing that often we don’t get the most out of what we have right in front of us. Why do we do this? Two truths tend to arise in this scenario. Either we do not like to admit we are doing things wrong, or we realize that we can change, but the work of re-programming and evolving seems too cumbersome. The truth is that until we make the most of what we have, nothing new in the marketplace will give us the results we want. That goes for our teams and our technology. The good news is you were right in the beginning. There is a better way, and it has been here the whole time. So, the real question is: how do we unleash it?
Step 1: Are We Focused?
According to a recent survey, 82 percent of accountants say their job is more demanding than ever, while 87 percent agree that clients expect more flexibility and better service levels from accountants without increasing rates. Accounting is a busy profession and in hospitality, it is easy to feel like we are doing everything for everyone. However, there are a couple of truths that we are all guilty of. We take problems from other departments as our own. Yes, I am talking about all that time spent on accounts receivable reconciliations and chargebacks, among other things. We also create work that does not produce material benefits. We make sure there is a copy of each invoice in the purchasing system, the accounting system and the balance sheet reconciliation workbook. What material benefits are we getting by ensuring the same document is in three separate places?
We need to ensure we are focused on tasks that create value and technology tools that promote practical efficiency to accomplish what matters.
Step 2: Are We Accountable?
Being accountable is more than making sure those month-end reports get out on the right day. Let’s talk more about that truth where we absorb other departments’ problems as our own. Property management must be held accountable for the monetary consequences of hotel operations. Accountants need to be held accountable for the accuracy of the reports that are issued and what those reports tell us about the decisions we need to make. But the bigger problem is not others holding us accountable for things we should not be responsible for. It is us holding ourselves accountable to let others own their respective responsibilities, so we can bring value to the table in accordance with the value proposition that a well-run accounting team affords a company – timely and accurate reporting with an analysis of our financial wins and opportunities. Accountants should be free from entering invoices, tracking down chargebacks and reconciling sales tax. We, as an industry, are diminishing the value that we could get from our accountants by asking them and allowing them to focus on such tasks.
We need to make sure we are accountable to ourselves and the maximum impact we can have in our organizations.
Step 3: Are We Thought-Forward?
We all hate to use this term, but standard operating procedures, or SOPs, are so important. Writing an SOP does more than just set a standard of rules; it forces us to think about why we are doing a task, how a task adds value to our organization today, and how it sets us up for success in the days ahead. Thinking beyond today is so critical. If we only fix today’s problems, we will never stop putting out fires because we are not putting energy towards anticipating the next one. Sometimes a task is just a task, but a task is also often an opportunity to elevate your team members. Your processes are there to grow your team’s skillsets. Likewise, the technology you implement should drive success in your organization in more ways than just making things faster. It should expand the perspective of your team, grow your level of efficiency, and cultivate a space to anticipate future problems that can also add to the ROI of that solution.
We need to be thinking procedurally, culturally and technologically about how the processes we follow, the tone we set, and the tools we use drive us forward effectively and efficiently – not only for today but for the future.
By asking these three questions of ourselves and our teams, we unlock vast potential just waiting to be tapped into. So, you are right; there is a better way!
As the strategic partnership manager at M3, Shane Middleton works closely with internal teams, as well as industry service partners, to develop and maintain the best collaborative relationships serving today’s hoteliers. He also works with M3 product and services teams to add a practical perspective of a hotel operator in the processes and design of service offerings and product features.
The Fall of the Traditional Dining Experience?
Written by: Ricardo Tellez
The hospitality and, more specifically, the food and beverage (F&B) industry are two that live by the motto: “if it ain’t broke, don’t fix it.” Unlike almost every other industry, the F&B industry prefers to stick to tradition; despite the incredible leaps in technology made in the past decades, many restaurants have stuck to using pen and paper. However, in recent years there have been glimpses of a shift in this mentality. Instead of uniformity and conformity, people have begun to seek new and unique experiences. Additionally, with the rise of social media platforms, celebrity chefs have boomed, allowing them to unleash their creativity and curate dishes few could ever dream of. Unfortunately, the restaurant venues themselves have seldom changed, as most venues consist of the same formula: four walls, tables and chairs.
Astonishingly, a single computer used to occupy an entire room, but now it fits in the palm of our hand. During that time, the evolution of restaurant venues has remained stagnant. Luckily, there are several companies that have been experimenting with augmented reality (AR) and 3D modeling that aim to revolutionize the traditional dining experience. These technologies can transcend the gap between the things we see on a screen and what we see in real life.
Whenever a restaurant implements AR, they allow customers to experience a new dimension through their phones. The restaurant group Vino Levantino partnered with the technology company Kabaq in an effort to modernize the traditional static menu – allowing customers an unprecedented view of their dishes. Utilizing their smartphones, customers can load the restaurant menu and see a list of dishes offered by the venue. Unlike traditional menus, customers can select any dish, and a 3D representation of it will appear on their table, which they can see on their phone screen. This allows the guest to visualize the dish from multiple angles before they place an order, with the ability to see its texture, presentation, and how each ingredient is used in the dish. Not only is this technological application beneficial for the customer who gets to experience the restaurant menu in a unique way, but it also brings benefits to the owner. A study conducted by Kabaq found that since the implementation of AR in the menu, dessert sales have increased by 25 percent. This proves that not only can technological innovations elevate a traditional dining experience – they can also reward its adopters.
Even though this partnership between Kabaq and Vino Levantino showcased the power of AR for restaurant menus, its application does not need to be limited to that sole aspect of the restaurant industry. In fact, the company Le Petite Chef has created an entire dining experience around the use of AR and 3D modeling. Le Petite Chef is a two-hour dining experience in which screen projectors display a virtual film on the tables. Upon arrival, customers select dishes from a set menu of at least four courses. Shortly thereafter, the restaurant’s lights will dim, and the show will begin. The customers will witness a cartoon chef walking around their table and interacting with virtual elements that he will use to prepare the customer’s selected dish. Once the cartoon chef has finished the dish, the restaurant’s lights will brighten, and the real dish will be brought to the table. Le Petite Chef has become a worldwide sensation, and this experience can be found in over 30 countries, in luxury cruises and hotels such as the Ritz Carlton in Los Angeles. This is a one-of-a-kind experience that customers are clamoring to witness, as many locations are fully booked months in advance. Furthermore, it can potentially bring enticing profits to its owners as the Ritz Carlton location charges $145 USD per person.
Today’s customers are tired of the traditional restaurant experience; they want something new and fresh. Fortunately, social media platforms allow restaurants all around the world to receive worldwide exposure. However, the restaurants that can harness innovative technology and implement it in their venues to create unique experiences will be the ones that gain the most notoriety and, potentially, profits. Thus, it is imperative that restaurant owners and managers seek ways to use these technologies to gain market share and avoid the risk of becoming obsolete.
This blog post received Second Place in the Fall 2022 HFTP/MS Global Hospitality Business Graduate Student Blog Competition presented by the HFTP Foundation. Participants are students participating in the Master of Science in Global Hospitality Business, a partnership between the Conrad N. Hilton College of Global Hospitality Leadership at the University of Houston, the School of Hotel and Tourism Management at Hong Kong Polytechnic University and EHL. The blog posts that received the top scores will be published on HFTP Connect through March 2023. Learn more at HFTP News.
Ricardo Tellez is is a student in the Master of Science in Global Hospitality Business with a passion for the food and beverage (F&B) industry. He enjoys learning about how restaurants are evolving to modern-day consumers and researching strategies for restaurant owners to increase profitability with new technology solutions. When possible, he travels throughout the world to visit and experience renowned chefs and famous culinary venues.
Resources:
- Ferrandez, C. (2022, June 16). Augmented reality restaurant experiences: 5 examples. Poplar Studios. Retrieved October 28, 2022, from https://poplar.studio/blog/augmented-reality-restaurant-experiences-5-examples/
- Kavanaugh, M. (2019, February 23). Augmented reality allows restaurants to serve up 3-D dishes. Restaurant Insiders. Retrieved October 28, 2022, from https://upserve.com/restaurant-insider/the-future-of-restaurant-menus-augmented-reality/
- Le Petite Chef. (2021). Exciting adventures await you! Le Petit Chef – The smallest chef in the World! Retrieved October 28, 2022, from https://lepetitchef.com/
- Trinh, T. (2017, November 25). What’s on the menu? augmented reality and 3-D food models. VOA. Retrieved October 28, 2022, from https://www.voanews.com/a/augmented-reality-3-d-food-models-on-the-menu/4136235.html
- Yeo, PK (2022, March 11). The uncomplicated, Ig-friendly delights of downtown’s Le petit chef. Time Out Los Angeles. Retrieved October 28, 2022, from https://www.timeout.com/los-angeles/news/the-uncomplicated-social-media-friendly-delights-of-le-petit-chef-at-the-ritz-carlton -030222
Here Is Why ESG Holds Significance in Asset Management
Written by Shivam Sharma
As an institutional investor, consider your investments — a hotel, club, restaurant, anything. Being an investor requires knowing how to allocate the appropriate funds to the right assets at the right time. But what if you have someone who can intricately manage that for you? This is where an asset manager would step in and decide what exactly investors should expect in returns from their assets. They define the metrics and targets to be achieved so that the entire asset is optimized to its maximum potential. Then, there is ESG: environmental, social and governance.
- Environment: issues related to the quality and function of the natural environment and systems around which the asset operates.
- Social: issues related to the rights, well-being and interests of the people and communities.
- Governance: issues related to the way companies are managed and overseen.
Investors have always been the key force for asset managers’ adoption of ESG strategy. About 85 percent of hedge fund managers have estimated that institutional investors are the biggest drivers of ESG funds, and the percentage of investors implementing ESG rose by 18 percent from 2019 to 2021.
With ever-increasing risks surrounding the environment, renewable energy, human rights, business ethics and labor standards —governments, companies, institutional investors and their asset managers are now questioning the extent to which their assets are responsible for the damage that has been caused. They are also exploring what can be done to mitigate these risks in the future, so that they are optimizing each asset to its best capacity. Investors and asset managers are smart enough to identify which assets show genuine ESG compatibility and, with the help of the regulators, provide oversight of green funds doing what they are intended to do and living up to their branding. To make the most of the funds and fulfill their purpose, asset managers are required to define the overview and context of what ESG means to them when identifying the metrics for their assets’ performance. It comes not only from the financial point of view; the ESG lens can be a solid risk-management tool with non-financial outcomes.
The non-financial factors that affect the performance of the assets must be managed well because they tend to be more efficient, aligned with the preferences of the investors, and generally less exposed to the risks by various regulators from different domains. But one may ask: what would be the non-financial ESG factors that asset managers may consider for their investment performance? Let us take a look:
- Environment: greenhouse gas emissions, climate change resilience and pollution control (water, water, noise and light).
- Social: workplace safety, cybersecurity and data protection, human rights and local stakeholder relations.
- Governance: fiduciary duty, board diversity, bribery and corruption, executive compensation and independence of chair and board.
Asset managers must work closely with investors to create their own policies and standards. Lack of standardization provides an operational burden on asset managers, thanks to additional due diligence requests and customized reporting for prospective investors. As asset managers begin to set their own ESG policies and/or offer ESG products, managers must consider their overall ESG investment strategy (ie, active versus passive ownership) and implement policies to support that chosen strategy. Lastly, the emphasis on ESG investment is picking up globally and regulatory bodies either already mandate how asset managers meet and disclose ESG objectives, or they are determining how they should bring forth regulations. For managers and investors who decide to set an ESG policy and offer responsible investment products, they must determine the regulatory requirements for each region and the legal jurisdiction in which they operate, as there is not yet alignment on global standards.
While it may come with operational challenges, asset managers must consider ESG across the whole office. Front office teams must ensure their investment screening and portfolio construction decisions align with ESG mandates and investors’ expectations, while compliance and regulatory teams in the middle and back offices have to provide a review function for adherence to mandates and regulations. Thus, asset managers will want to explore how to proactively include ESG mandates in the assets to help ease pressure and support the smooth transition of socially responsible investing.
An emphasis on ESG investing may be in the early stages in most regions of the world. Still, its impact will only advance as governments and society place more importance on managing climate risks and socially equitable business practices.
This blog post tied for First Place in the Fall 2022 HFTP/MS Global Hospitality Business Graduate Student Blog Competition presented by the HFTP Foundation. Participants are students participating in the Master of Science in Global Hospitality Business, a partnership between the Conrad N. Hilton College of Global Hospitality Leadership at the University of Houston, the School of Hotel and Tourism Management at Hong Kong Polytechnic University and EHL. The blog posts that received the top scores will be published on HFTP Connect through March 2023. Learn more at HFTP News.
Shivam Sharma is a student in the Master of Science in Global Hospitality Business with aspirations in asset management. He has four years of experience in the hospitality industry and has worked for Marriott International in their revenue management operations from 2019-2021.
Resources: