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Performing a Successful Hotel Turnaround

Performing a Successful Hotel Turnaround

The JHouse, a boutique redo of an old Howard Johnson hotel in Greenwich, Conn., had a rocky beginning. That’s not to say the May 2012 opening was a flop—in fact, it was a huge success.

Patrons flocked to the hotel’s expansive outdoor space, complete with Miami-style poolside cabanas and a bar and restaurant. With crowds 20 deep at the bar and lines around the block to get inside, it seemed like a surefire home run.

But traffic, noise, and parking issues caused tension with neighboring businesses. And the overwhelming success of the bar scene overshadowed and took away from the quality of the restaurant, guestrooms, and function spaces. Six months later, the buzz started to wear off. The owner—a reputable developer of high-end residential and commercial buildings in Greenwich—spared no expense when it came to the quality of The JHouse’s building materials and finishes. However, the first-time hotel developer made some missteps in the process.

To get the business back on track, he recruited Jonathan Wise, a 20-year luxury hotel management veteran and turnaround expert, as the new GM. “A hotel is a living, breathing thing; it’s not a house where the person comes in and figures out how they want their closets,” Wise says. “A hotel has to be built in order to live, breathe, and function. It was a big learning curve for them and the people involved.” Because the property was unbranded, there was no textbook of what had to be done when and how, he explains. “There wasn’t a period of presale. It was kind of a rush to finish it. It was more important to get it open and up and running. Everyone was so excited about it because it was new, cool, and so different than anything else in this market.”

To ensure the success of a new project, it’s best to have the managers involved in the predevelopment and construction stages because they will be responsible for the flow of business, Wise says. “When you don’t have the people who are going to run the hotel involved in the decisions like the layout and configuration, they will face a lot of challenges on how to make it work when they could have solved a lot of problems six months before it opened.”

Since starting the turnaround process in summer 2013, Wise has instituted a number of initiatives to elevate the level of service and operating culture at The JHouse, including reorganizing senior management, putting a new front office and sales team in place, repositioning the hotel’s restaurant, curtailing emphasis on the bar, and repairing relationships with neighbors.

The JHouse has already seen a 23 percent increase in occupancy and 38 percent increase in ADR since Wise came on board.

“When you go into a new property that needs this kind of repositioning, you write down everything you can think of that you observe in the first few days, then look at that list a couple of months later and think, are these things still the priority or has something else taken precedent?” he says. With any repositioning project, owners have to commit to going all the way, Wise says. “The job of someone like myself is to get the owner to understand what it is they really want to do and are they prepared to do what needs to be done.” In some cases, owners start making the right moves but eventually fall back into bad habits. “That’s entirely their prerogative because it is their business, but I think the biggest challenge you see in turnarounds is that the owner is sometimes unprepared, unwilling, or nervous about making such a change.”

Staff members also have to make adjustments during a turnaround. Explain the goals you want to achieve and what tools you’ll be providing to make them a reality. Some employees may rise to the occasion while others can’t or are unwilling to.

“My job is to beat the drum, to communicate the direction it’s going, and explain, ‘Look, the train is leaving the station,’” Wise says. “We’re heading this direction, and you’re either on it or you’re not.”

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