Maximising Cash reservesWhy sometimes you have to ignore the numbers for long term gain

I’m due to go to an event at The Vox near the NEC in Birmingham in a few weeks, after everything opens up again and we can be indoors.

Here’s the response I got

So you can imagine my frustration when I received an email out of the blue yesterday from “Guest Relations” for IHG Hotels in the USA.  I was due to stay at the a hotel near the NEC.  All it said really apart from a load of corporate speak was    “……The safety of our guests is the number one priority and as one of our steps to help prevent the spread of Covid-19, we would like to advise that the hotel is not available to the public until further notice, thus the cancellation of your reservation…..”

Here’s why it is so damaging

The email went on to say any fees or penalties will be waived and refunded…..I’m sorry penalties but you cancelled not me…

I can only assume that a “Technical” Accountant (yes you heard that right) in Head office somewhere has run the numbers and decided right now the numbers regarding profitability don’t add up……

Now you know I would be the first to tell my clients to “Know their numbers” and “Make a profit” but sometimes in exceptional circumstances you have to override the numbers and take a bigger picture longer term commercial view.

I get they are not going to be flooded with a full hotel, but they have to open up again, and the goodwill they will get and how they harvest that would put them in a fantastic position.

Exceptional Circumstance

We are just coming through a pandemic that has caused the forced closure of thousands of businesses across the world, why would you not open up and take advantage of saying we are here, we are open for business and just think differently

Businesses who will win

The businesses that have thought smartly about this will be the winners, who have kept in touch with their customers and communicated honestly.  Maybe sent a little gift to remind your customers you are still around.  Having an opening fanfare, maybe even an opening gift.  They could have marketed their hotel at the NEC to get more occupancy.  I can only assume they are closed as they don’t have enough guests….well go and get them. 

If they had thought smartly about it, they could have asked the guests why we were coming, were we going to NEC and what was the event….then gone to the event organiser with an offer to drum up business. 

Not nimble enough

The problem with big corporate organisations is no joined up thinking, people don’t care enough and no one has the big picture and thinks deeply about the consequences of it!!  If the accountant had been commercial he or she would have thought how they could turn the situation around to their benefit rather than thinking lets cut costs…..They haven’t thought about the inconvenience to the customer, or more importantly how they have made us feel and I for one won’t be rushing back….you see, there are many hotels and they don’t have great positioning so their hotel has nothing that really makes them stand out to me.  They just happened to have a car park and be close to the venue.

 

The moral of the story is..

Don’t make snap decisions, think about the bigger picture and sometimes long term gain trumps short term profits…..but run your numbers and consider everything carefully….. 

 

 

This article is for general information only and no action should be taken, or refrained from, as a result of this information.  Professional advice should be taken based on specific circumstances in each individual case.  Whilst we endeavour to ensure that the information contained in the article is correct, no liability  will be accepted by KMA Accountancy which is a trading name of Kim Marlor Associates Ltd or damages of any kind arising from the contents of this communication, or for any action or decision taken as a result of using any such information

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