One on one with Michael Sengol, CEO of Meritus Hotels & Resorts

You were recently promoted after just one month from chief operating officer to CEO. What happened there?
I realized that many things were just plodding along. I am a quick starter and I don’t waste time. I make a lot of changes, approve many different things at the same time, using the resources I have, review the entire operation, and start saying these things must change today, don’t wait until tomorrow.

Of course, you are taking a lot of risk because you are also creating misunderstanding among staff because they are in the comfort zone…but then the result is very quick, because immediately you see fantastic growth. You’re running a business unit, any decision you make impact your growth and your profit so I made lots of decisions that impacted those things in that first month.
 
In general what do you think hotels are doing wrong?
I think they should constantly take stock of what they’re doing. Hotels are not taking stock periodically. They are taking stock in old fashioned way. At the end of the year, they do an appraisal. They don’t do an appraisal on a daily basis, on a weekly basis. A lot of hotels are still doing things that are not relevant any more. They are sending minutes out and making reports that nobody reads. All of this is unnecessary. Today’s world is very reactive. You’ve got to change your plan every day and this is what hotels are doing wrong.
 
Are they too procedure driven?
Yes, absolutely, and that doesn’t help an industry that is so transient. The employees should have free access to whoever they want to see. If they have an experience or a challenge or a suggestion, why do they have to go through all the processes? What happens is that new ideas don’t come in.
 
What else needs to change?
I think what has to be done is taking the skill set of all our industry and asking have we reached the point that is an end or is there a new beginning for them. Otherwise [employees] are completely in a comfort zone, they work to a level of incompetence basically, and they can’t add value to the people under them. I think [a company] should start taking a complete audit on all the skills the individuals carry in their top management staff and then work their way down.
 
What are the main challenges for hoteliers in this region at present?
The dynamics have changed. What was happening was everybody was accepting mediocre service. [What] you do is understand the behaviour, and change that through your training and make it worthwhile for [employees] and reward them correctly. Recognition for employees has gone down. It is loyalty to customers, loyalty programmes, [but] where is the loyalty to the employees?
 
What about at the management level? Are there enough managers available in Asia?
There are not enough qualified people in the market. Management staff are not being trained in Asia. There is no management school. You don’t have top management readily available. Second, in the crisis, what [companies] did was to take off all the number twos and that didn’t help. The market is now soaring upwards and you don’t have people to deliver customer expectations. Training should not stop at any time. In fact, in a crisis you should be doing a lot more training and improving productivity. What [companies] did was take the short way out by cutting costs instead of investing in training and cutting waste. Training is not that expensive.
 
How can you get good service when you have high turnover?
The first thing you do is try to understand the type of employees that you employ. I think that the turnover is happening because we employ the wrong person for the wrong job. If a guy doesn’t like the hotel industry, why hire him? You know he will come in just for a short while, just six months before he finds another job. Turnover is a cost for you by hiring the wrong person. The recruitment exercise is hiring to replace a warm body; it is never hiring to replace a skill and to grow that skill. The turnover within hotel to hotel is far less than the turnover that leaves and never comes back to a hotel. A lot of the people are just getting out of the industry now.
 
Finally, what development plans do you have at Meritus?
What we’ve done is taken stock with where we are. We are now out in the market place looking at potential hotels and want to see synergy of these cities, and once we see that we’ll grow the brand. We’re not in a rush to grow the brand. We want to grow the brand slowly but surely making sure we can add value to the partners. We’re looking at main cities that allow fast growth.

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