Slippage: Hospitality Horror Stories or How to Merge, Divest and Acquire with Grace

by Constance G. Konold

Thursday, 15th June 2006, first published on http://www.4hoteliers.com/4hots_fshw.php?mwi=1412

We Stephen King fans know all about hotel slippage - we saw it bloodcurdlingly portrayed as the frontier between the real world and the unconscious in The Shining's ironically named Hotel Outlook  (based on The Stanley Hotel in Colorado, which has since been ISO spook-proofed).

More recently, we were led fighting and screaming across an ectoplasmic threshold into "Black House", where the imprudent traveler winds up being a guest for dinner, so to speak.

Slippage, as King describes it, is the instant when the membrane between you and a chilly, unsettling world beyond becomes transparent.   This happens a lot in hotels.

Take my two recent four-star experiences in Amsterdam and Cannes.   I'm not talking about just substandard service or noisome ectoplasmic guests.  I am referring to the curiously uniform glassy-eyed absence that settles over the staff of hotels in the throes of a merger, divestment or acquisition.  No doubt staff refer to those transitions and integrations more as "murders and inquisitions", judging from the reigning atmosphere during the process. Struck by a similar resonant hollowness of communication behind a veil of funereal stoicism at both of these two establishments, I recognized that they were both experiencing Big Time Slippage.  Something distant, nebulous and pervasive had taken the staff into its grizzly grip, revealing a disquieting otherworldly realm considerably beyond "hospitality" and certainly not good for business.

I booked my Amsterdam hotel months prior to my visit because of its affiliation with Le Méridien.  When I arrived, I was surprised but not displeased to learn that the hotel now actually belonged to Starwood Hotels & Resorts. Any previous trace of Le Méridien had been expunged.  However, upon checking out, I was unpleasantly unsettled to learn that in the space of the five days I was there, the hotel had once again changed hands.  This, I decided, explained why employees had seemed absent and preoccupied during my stay, appearing distant and avoiding eye contact, lowering their voices, whispering in corners, or – in one case, looking like I'd struck with a Taser when I inquired about Starwood's divestment of the hotel. 

Slippage was again instantly recognizable at my Cannes hotel, which will remain mysteriously unnamed for the sake of intrigue. (I'm sure you'll guess!) Despite it's four-star palace pretensions, there was no doorman present when I arrived. Six staff members, with their backs to me, were huddled around the front desk and completely ignored me.  The stark red-leather-and-white marble atrium was totally empty except for me. Suddenly, it began to feel like a giant mausoleum. Later, witnessing the chilly, distant and glazed service in the restaurant, I was convinced that this hotel was also in the grip of  slippage

Curious, I explored the slim media coverage I could find, all suspiciously tame, given the apparent in-house and city-hall related drama following the "crazy" acquisition by an American investor who immediately threatened to name the hotel after his daughter. To mark his new territory, he had an ugly green tarpaulin draped over the former owner's name on the marquis. Amusingly, the full pre-sale name of the hotel remained on the beach-side property.  As it turned out, the new hotel owner had not acquired the beach front along with the hotel, making it temporarily the only "palace" hotel in Cannes sans beach access.  (Fortunately, this has now been remedied, thanks to access to three other beaches.)

Rumor thrives on such drama, and the big one was that the hotel management company would change. Reports circulated that the new owner had descended upon his trophy purchase with brash directives that destabilized staff from the front desk to supervisors.  There was no orderly consultation of local management; no cross-cultural finesse between the new American owner and his mostly French staff; not even any monocultural sympathy with the hotel's American-bred management company.  Now, this is symptomatic of Very Major Slippage.

Takeovers, mergers, divestitures and acquisitions are always messy but they're fortunately rarely this visible.

With one of the top-ten global issues in the hospitality industry for 2006 being increased consolidations of hotel brands and companies, and thus mergers, acquisitions, divestitures, rebranding, and, consequently, radical change, I think it's time to alert the hospitality investors – particularly if they're the raiding type with limited hospitality background – that things get positively weird when hospitality slippage begins to happen. The billionaires who want to get – and stay – in the hotel game need to know that  "coupling" and "recoupling" in the hospitality industry requires skilled foreplay and in-depth staying power.  They need to manage HR values and the hotel image as much as the real estate value, rather than swooping in like banshees intent on a general lockdown of booty rather than cultivating a new-old team that will work well for them.

Otherwise, Hospitality Raiders, beware the slimy slippage and the nightmares on the other side of the M&A membrane.

Here are the petrifying (because too common) signs of slippage:

• Creaky, late or sloppy logo changeovers, particularly on your marquis
• Ethereal doormen and valets
• Covens of whispering employees
• Lightening-struck front desk personnel with worried, closed, unsmiling and preoccupied demeanor
• Dirge-like or erratic service in any and all departments
• Terrifying rumors around town that YOU are the bogeyman.

Fortunately, in the twenty-first century, we have many spells and talismans to counter hospitality slippage:

• Sensitivity training to alert managers and investors to bad omens that will vampirize their bottom line
• Open, fine-tuned and coordinated communications between the worlds of management, staff and new owners
• Coaching for top executives and department heads but particularly for the godhead who holds the purse strings: the property owner
• Intercultural workshops to deal with not only cross-cultural issues but also rebranding or adjustment to the value base of staff

Copyright C.Konold 2006 ©