How to Create Loyal Clients & In Doing So Steal From Your Competition

By Don Farrell

You are on a city bus, train or a plane going somewhere and you strike up a conversation with the person next to you. You find out they plan a major meeting at least once a year that you would like to have at your hotel. You tell them this and you get the business. Is there anyone out there reading this that thinks this is highly unethical? Besides me?
I think this is unethical because that same person has been using your competition for many years now and you did not know it. Long ago you could have had this event at your hotel, providing for your employees and their families; providing for the hotel ownership so they could have afforded to invest in needed capital items; helping your brand grow stronger each booking at a time; making it easier for lenders to say yes to investments needed to keep your hotel competitive and the list goes on to your vendor partners, community and so on. It begs the question 'how happy or unhappy has the client been at your competition?' Would that person have moved to your hotel much sooner if you would have bumped into them, sat next to them, or better yet....you planned to meet them sooner? Sitting here right now you do not know who they are or who they work for but you plan to find these kinds of opportunities each and every day. If you don't do that now, you certainly should. There are many people who are counting on you to provide for them and the truth is some of these employees counting on you don't even know who you are, or what you do or how much power you possess to impact their livelihoods, but man they need you none-the-less.

In one of the fifty stories I tell in my new book, 'Ethical Theft', I would go up to a meeting that would be breaking at my competition and I would approach the person closest to me and ask them who the person in charge is. He would point out the person to me and I would wait until that person would finish whatever they were doing before I would approach them with my business card in my hand. I would say something like 'this is not the right time or place to go into this, but I wanted you to know that I would love to have this meeting at my hotel. Could I please make a call on you after this meeting is over this week to talk about it?' 85% of the time this person would either think or say I was crazy. I would say 'I don't know if I am a little crazy doing things this way, but I what I do know is that I am more confident in my hotel to do a better job for you....that's why I do it.' If it is a sales meeting that is taking place I have often been brought into the meeting room after everyone has returned from the break and sat down. The leader of the session would announce what I just did and would ask if any of them would be willing to do that....sometimes a hearty applause would follow. I said 85% kept an open mind, the other 15% would think that I was nothing short of a river pig and would not want to have anything to do with me....probably a bunch of accountants. If I could bat .850 and impress 85% of the people I first meet then those are pretty good odds that I can live with.

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Few Things about Hotel Industry

Fitch expects the number of delinquent loans to increase and reach 5 percent by year end given the recent increase of US$2 billion in delinquencies and higher rollover rate of 30-day delinquencies to 60-day. Commercial property fundamentals continue to be under stress due to economic factors such as rising unemployment and lack of consumer spending as well as loans with low debt-service coverages that are close to depleting their reserves.

The hotel real-estate class is prominently featured in the report, which details the 10 largest delinquent specially serviced loans, the 10 largest performing specially serviced loans (which were with the special servicer but were either reported 30 days delinquent or were paying debt service), and the 10 largest Fitch loans of concern that were with the master servicer as of 31 July 2009.

Among the 10 Fitch loans of concern that are current but have shown decline in performance or are unlikely to meet stabilization expectations at issuance, four are hotel loans:

LXR Hospitality Pool—a US$1.07-billion loan secured by 12 hotels in Puerto Rico, Florida, Arizona, California, New York and Jamaica.

Kyo-ya Hotel Portfolio—the US$1.05-billion loan is secured by six full-service hotels with 6,127 rooms. All but one of the hotels is located in Hawaii, which has a negative outlook on hospitality performance for the coming years.

Kerzner International Portfolio—the US$669-million loan consists of a diverse portfolio of real estate, including resort casinos, golf courses, timeshares, vacant waterfront land and ongoing construction projects.

Planet Hollywood Resort and Casino—the US$460-million loan is secured by a recently renovated hotel and casino in Las Vegas.

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