Viet Orient

Hotel set up and management handbook

Why should investors hire a hotel set up, hotel management and hotel consultancy company? P2

A resort set up by a consulting company

Through the process we work with investors, up to 95-98% of the projects have finished design, down the foundation and the buildings are completing. At this moment, the owner just think that they need to have a professional company to set up their hotel and manage the hotel. However, they forgot that, consulting on Mechanic, Electric and Plumbing (ME&P) and utilities function in hotel construction are playing an important role in hotel operation. Hotels business is good profits is basing on this step.

Hypothetically, there are two hotels operating in the same city, the same hotel segment, the same number of rooms, but one hotel is more efficient than the other is. This makes the owner of the ineffective hotel dissatisfied with 
the hotel management company, the hotel manager and the owner of hotel will assume that result is due to weak hotel management team.
So is it true as the conclusion of the investor or not?  We together find out and you will understand it may be wrong from the designing step.

Through the 
 of hotel consulting, setting up and managing, we studied that the investors might think the designing company when designing the hotel, of course, they ensure the hotel functions are the most suitable. However, that is not so. The designing company - their majorities are in architecture, structure. They are not specialists in hotel operation. And the fact is designer will not pay for a hotel consultant for each project because this cost reduces their profits. Some design companies have the opportunity to carry out many projects, ten or more project, for example. With each design projects, they get some experiences about hotel function. And they apply those experiences to their designs later. However, we assert that no hotel will be the same. Hotels just change the area, the utility features of each service are completely different.

So, when we contacted with some investors whose hotels had 
a performance problem , they complained to us that this designer was not professional, or the designer did not know their job. This judgment seems unfair to those designers at all.
Life has a saying: "Nobody is good at everything." This sentence is completely applicable in this case to the above design company as well as the investor or to us - a c
onsulting, set up and hotel management company . Let's be excellent in our field.

At this moment, we realize, there must be an intermediary company standing between the designer and the investor, which is the hotel consulting, setting up and management company.
However, the investor wondered: “Should I hire a 
hotel set up and hotel management company or not? Or I can save amount of money if I don’t hire”.

Investors who have this idea must reconsider. Why? Let's work down this:

For example: Cost of ME&P & hotel functions consultancy is VND 500 million. This amount is only invested once. But what is its value? Why the investor must pay half a billion for each ME&P & hotel functions consultancy while the investor can be consulted by friends, partners, colleagues - who have the opportunity to travel to many regions and experienced many of hotels and resorts worldwide. So they must know?

It is not wrong for investors to seek such advices but to operate a 3-5 star hotel, is the consultation information of non-professional 
hotel management will be enough?
We affirm: NOT THAT. In 
operating a 3-5 star hotel
 , just lack of utility functions will generate more work to ensure service. When additional manpower or wrong utilities are generated, the hotel will incur additional costs for electricity / water, manpower etc. Therefore, just 2 additional staff in each department, 5 departments will become 10 employees. We multiply by an average salary of 7,000,000 VND per employee (including insurance, meals and benefits) then 10 employees = 70 million per month. And so, 1 year = 840 million so we multiply for 10 years = 8.4 billion dong.

Please note that this is only the salary cost of the staff due to a mistake in the arranging utility functions of the hotel, not including the additional cost of electricity and water. So as the above example, should we hire a hotel set up, hotel management company and pay just 500 million dong instead of paying for 8.4 billion?

We contacted with a hotel project investor and her hotel was under construction. When we met her, she revealed to us that she hired a design company from Saigon. We told her that she should send us the design for further advice, but she responded proudly: “I hired a design company from Saigon, do you see any hotel here dares to hire like me?” More than two months later, after many exchanges, she sent us the design of the hotel. When we looked at the room layout design, we felt so sorry because her hotel is surrounded by houses, 3-storey villa. It means from 4th floor, all the rooms can get view from window. Besides, her design left 01 room behind the stairs. That room has no window. The area of ​​that room was only 16m2. Meanwhile, the location of the hotel is the seashore, the newly developed area so most of the hotel rooms are very large. Therefore, in terms of business, the room is very difficult to sell and thus construction and design are not effective in arranging utility function and reducing business advantages.
Hotel room design without windows

Why should investor hire ME&P Consultant in hotel construction?

About ME&P issue, we cited one of the hotel projects our company has set up and managed. When we approached the investor, for his hotel's benefit and business, we recommended that he should sign a full service contract that included ME&P consultancy, utility function consultancy, hotel set up and management contract with our company or any consultant so that the hotel will be operated effectively. Besides, we - consultancy company would give out the sales, marketing strategy, and business direction so that hotel business will be more effective. Why is that? Hospitality is specific industry. Travel agencies get contract for 2-3 months in a year for tour package before sending out to their partners and this will be stable rate for one year without changing. It means the hotel rate is assigned without changing. Therefore, the hotel is opened in right time, plus sales and marketing is well prepared, the good result is basing one that. But the owner of that hotel signed contract with us for hotel set up and management service only 3 months before the opening date. As the result, the operation cost is higher as the owner did not use utility functions and ME&P consultancy services from us or any professional company. Therefore, the hotel management company had to burden additional cost in monthly hotel operation.

We would like to give some examples for not using ME&P consultancy service, this hotel had meet below problems in operation:

   •  Fire alarm system sometimes rang suddenly.
   • Hot and cold water flowing unstable, sometimes hot and sometimes cold .

At first, the investor tried to fix the problem by put 04 plumbs as the consultancy from the contractor. But it did not solve the problem. Then we sent our expert to study and give solutions and the problem was fixed.

Other example: all the rooms are smell when the room occupancy of hotel was high.

We had to check again to find the reason of bad construction supervision, leading to the connectors in the bathroom drain, lavabo and toilet floor were uncovered properly so that caused of bad smell. Therefore, the solution was that all bathrooms must be reworked. Below images producing evidences:
Bathtub drain does not create a smell prevention
The Drains were not connected properly

► Do not use the utility function consulting service: other example of the above hotel, when we re-surveyed the entire service of the hotel, there were 4 bars in hotel, in 12th floor, 5th floor - Reception hall, 3rd floor - Restaurant, 2nd floor - Spa area but there is only one bar that arranged cup washing place. This shortage of washing place arrangement savings money but it affects hotel operation. There is no cup washing area at the bar, which leads to the issue that staff taking more time to transfer glasses and cups to other place for washing. Therefore, food & beverage department will need more staff in its operation. In addition, washing the cup with the dishes is the reason of broken glasses.
There are more example / issues affecting the operation, but limited to one article, we only raised a number of symbolic and illustrative issues for investors to understand more about the necessity for hotel to have hotel
set up, hotel management and hotel consultant  compoany for hotel business and benefit.

We, the hotel set up and hotel management company, write these confidences to wish the hotel owners will understand the value of our job and what benefit we will bring to you in term of corporation.

Nguyen Van Quang
Chief Executive Officer - CEO
Viet Orient Hospitality

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