Our hotel is for sale.
While some of us view this as a common real estate transaction, most employees face this with trepidation. As the leader, you must maintain a sense of calm throughout the process, which can last for many months or longer.
Throughout my career, I’ve experienced many property sales, and there are typically three scenarios one might face.
- The sale results in a new owner with the same management team.
- There is a change of owner and management.
- There is a change of owner, management and brand.
The one thing that all of these deals have in common is the immediate uncertainty that the staff experience. When will the sale happen? How will this affect my position and career? Who will the new owners be and how will they change things around us? Should I leave?
What happens in each of the scenarios presented, and how do you manage through them all? Bottom line: It’s stressful, but you can persevere.
Anxiety inspires change
When intent to sell is made public, everyone on the team opens their eyes and looks around. The executive committee members are first on the firing line, so they are quick to examine their options. Should new management come into the fold, they’ll most likely choose their own team, so the uncertainty causes key executives and management to quietly begin a search for new opportunities. The GM must prepare for departures throughout the process. If you’ve cross-trained your staff, you’ll be ready to employ your team’s flexibility.
A change of management and ownership might result in the most sweeping changes of staffing. The change in ownership, management and brand offers an exciting opportunity for employees to be part of a new flag and opportunity.
In all scenarios, middle management typically has prospects with the new ownership. But also managers are vulnerable, so they might begin to weigh their professional options. Line employees have the most solid ground in sale and management changes, especially if they are members of a union, but they still need reassurance from the top.
Maintaining a sense of “business as usual” in this environment can be challenging, but it’s best to do just that. Continue to offer support and reassurance, and maintain communications regarding the process and status.
Show and tell
It is the responsibility of the entire team to be prepared and ready to show the property to interested parties. Because of the 24/7 nature of operating a successful property, you should always feel ready and comfortable to provide tours for prospective buyers. There should be no reason to change the rhythm of your days.
The primary concern for a new investor is the question: “Can the asset be improved and generate improved performance? And if so, what needs to change to make that happen?” That change could be physical, a renovation or a concept change.
Through it all, you must maintain a sense of calm. And of course, manage the rumor mill that inevitably churns.
Stress levels rise as a potential buyer determines to move forward and conduct extensive due diligence. After combing through the financials, property assets, and staffing benefits and challenges, buyers decide during this process whether the purchase is viable. They can say “no,” at which point the entire process begins again. It’s never easy.
Transitioning to a new property
Once a sale does happen, unease continues. The new owners begin to evaluate everything from the staff to the property, and begin to tie-up loose ends with the former management company. During this time, the entire team must be accommodating and supportive to the new company, and be honest in disclosures while also protecting the former ownership or management team. It’s a tap dance of sorts.
With an ownership-only change, expect potential new direction, new goals and expectations. There’s also potential cash infusion through renovation, excitement and energy. If there is a change in ownership and management, expect a process of interviews for all management positions.
If a new owner and management team determine they’ll add or change the brand, prepare for a period of renovation, marketing shifts, public relations initiatives and much training to comply with the new brand’s standards of service, amenities and more.
They say it’s lonely at the top, and in a sale scenario of any kind, it’s especially true. As the key leader, you must run the business as normal and not show the employees otherwise or risk adding to the apprehension everyone feels.
As a member of the Kokua Hospitality, LLC’s management organization team, Birgit Radin serves as the managing director for two properties in Chicago, The Doubletree Chicago Magnificent Mile and the Inn of Chicago. Reach her at bradin@doubletreemagmile.com. To learn more about Kokua Hospitality, LLC, visit www.kokuahospitality.com.
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