In the highly competitive hospitality industry, strong deal-making skills are essential for success. Whether it’s negotiating a favorable lease agreement, securing a vendor contract, or closing a sale with a potential client, the ability to negotiate effectively is critical for any hospitality professional. In this article, we will explore the key skills and strategies that are necessary for strong deal-making in the hospitality industry.
When it comes to strong professional attributes, Alexander Mirza is nothing short of exceptional experience in the hospitality. He was tirst to build a 2-sided talent marketplace for hospitality using AI/ML. Predicted the worth of each talent and matches them to career opportunities. He has managed over 1 million users and clients include largest hotel chains.
Mirza was also the first foreigner to build and scale a hotel brand in China, Cachet hotels then take it global. Opened hotels in 10 Chinese cities, Thailand, Mexico, USA
Mogul Hospitality, a venture-backed business whose goal is to perfect meritocracy and hasten diversity, is run by Alexander, who also serves as its CEO and co-founder. To create MogulRecruiter, the first AI-powered talent marketplace for the hospitality industry, he collaborated with data scientists and software developers. Mogul Hospitality has advanced to create a thorough Talent Engine and an ESG hotel brand that includes sustainable practices, work-live designs, and employee ownership.
Doing business deals in the hoteling sector can be a complex process, and success often depends on a variety of factors. Here are some key stats on this topic:
- According to a report by PwC, the hotel industry is expected to see continued growth in deal activity in the coming years, driven by consolidation, portfolio optimization, and other factors.
- A survey by Deloitte found that the most important factor in negotiating successful hotel management agreements is aligning the interests of both parties. This can involve finding ways to incentivize the hotel operator to achieve certain performance targets, while also protecting the interests of the property owner.
- Another survey by Deloitte found that 80% of hotel owners and investors believe that brand affiliation is an important factor when negotiating hotel management agreements. Choosing the right brand can be a key part of a hotel’s business strategy, and negotiating favorable terms with the brand can be crucial for long-term success.
- A report by JLL Hotels & Hospitality Group found that the Asia-Pacific region is seeing a surge in hotel transactions, with deal volumes increasing by 54% in 2018 compared to the previous year. This highlights the importance of understanding regional market dynamics when negotiating hotel deals.
- Finally, a report by HVS found that hotels with higher levels of customer satisfaction tend to achieve higher room rates and occupancy levels, making them more attractive to investors and potential partners. This highlights the importance of focusing on the guest experience when negotiating hotel deals.
Here’s what’s imperative for winning over deals in this sector:
Developing a Strong Negotiation Strategy
The first step to successful deal-making is to develop a strong negotiation strategy. This involves assessing your goals and objectives for the deal, as well as the strengths and weaknesses of the other party. By understanding your own priorities and the motivations of the other party, you can develop a negotiation strategy that is tailored to your specific situation.
One important aspect of developing a negotiation strategy is to identify your “walk-away point.” This is the point at which you are no longer willing to continue negotiating and are prepared to walk away from the deal. Knowing your walk-away point helps you to stay focused and avoid making concessions that could negatively impact your business.
In addition to understanding your own goals and objectives, it’s important to research and prepare for the negotiation. This might involve gathering information on market trends, researching the other party’s history and reputation, and analyzing the current competitive landscape. Armed with this information, you can develop a negotiation strategy that is informed and effective.
Another key skill for successful deal-making in the hospitality industry is effective communication. This involves not only articulating your own needs and priorities but also actively listening to the other party and understanding their perspective.
One effective communication strategy is to ask open-ended questions that encourage the other party to share their thoughts and feelings. This can help you to better understand their priorities and motivations, which can in turn inform your negotiation strategy.
Active listening is also critical for effective communication. This involves paying close attention to the other party’s words, tone, and body language, and responding appropriately. By demonstrating that you are listening and responding thoughtfully to the other party, you can build trust and rapport, which can be critical for successful deal-making.
Creativity and Flexibility
In the hospitality industry, deal-making often requires creativity and flexibility. This might involve finding new ways to structure a deal that is beneficial for both parties, or being open to alternative solutions that are outside of the traditional negotiation framework.
One strategy for creativity and flexibility is to focus on interests rather than positions. This means looking beyond the specific terms of the deal and focusing on the underlying interests and priorities of both parties. By identifying common interests and priorities, you can develop a negotiation strategy that is mutually beneficial and maximizes value for both parties.
Another strategy for creativity and flexibility is to build a strong relationship with the other party. By building trust and rapport, you can create an environment of collaboration and problem-solving, which can lead to more creative and flexible solutions.
In many cases, successful deal-making in the hospitality industry requires effective teamwork. This might involve working with colleagues within your own organization, or collaborating with external partners and vendors.
One strategy for effective teamwork is to identify and leverage the strengths of each team member. By understanding the unique skills and expertise of each person on the team, you can develop a strategy that maximizes the strengths of the group.
Effective teamwork also involves clear communication and coordination. This might involve regular check-ins and progress updates, as well as clear roles and responsibilities for each team member.
In the hospitality industry, deal-making often involves a certain degree of risk. This might involve financial risk, reputational risk, or operational risk. Effective deal-making requires a clear understanding of the risks involved and a strategy for managing and mitigating those risks.
Managing risk is a critical aspect of success in the hospitality industry. Whether it’s financial risk, operational risk, or reputational risk, failure to effectively manage risks can have serious consequences for businesses. In this article, we will explore some of the key strategies and best practices for managing risk in the hospitality industry.
Identifying and Assessing Risks
The first step in managing risk is to identify and assess potential risks. This might involve conducting a risk assessment that looks at all aspects of the business, from financial risks such as pricing and revenue management to operational risks such as food safety and security. By understanding the potential risks that the business faces, it becomes easier to develop strategies to mitigate and manage those risks.
Another important aspect of risk identification and assessment is to stay informed about external factors that can impact the business. This might include changes in regulations or laws, shifts in consumer preferences or behavior, or shifts in the competitive landscape.
Developing a Risk Management Plan
Once potential risks have been identified and assessed, the next step is to develop a risk management plan. This involves developing strategies and tactics to mitigate and manage potential risks.
Cultural Awareness and Adaptability
One of the most important skills for successful international deal-making in the hospitality sector is cultural awareness and adaptability. This involves understanding the cultural norms and practices of the other party and adapting your negotiation strategy accordingly.
In many cases, cultural differences can impact business practices, such as how negotiations are conducted, the importance of building personal relationships, and the significance of non-verbal communication. By understanding and respecting these differences, you can build trust and rapport with the other party, which is critical for successful deal-making.
Another important skill for international deal-making in the hospitality sector is language proficiency. Being able to communicate effectively with the other party in their native language can help to build trust and rapport and ensure that important details are not lost in translation.
If you do not speak the other party’s language fluently, it is important to have a qualified interpreter or translator present during negotiations. This can help to ensure that both parties fully understand the terms of the agreement and can prevent misunderstandings that could negatively impact the deal.
Legal and Regulatory Knowledge
In the global hospitality industry, legal and regulatory requirements can vary widely from one country to another. It is important to have a solid understanding of the legal and regulatory requirements in the country where the deal is taking place.
This might involve working with local legal and regulatory experts to ensure that the agreement is compliant with local laws and regulations. It is also important to have a clear understanding of the potential risks and liabilities associated with the agreement, as well as strategies for mitigating those risks.
Networking and Relationship Building
In many cultures, personal relationships are critical for successful business dealings. This is particularly true in the hospitality industry, where building strong relationships with suppliers, partners, and other stakeholders is essential.
Networking and relationship building can take many forms, from attending industry events and conferences to hosting business dinners and social events. By taking the time to build personal relationships with the other party, you can create an environment of trust and cooperation that is critical for successful deal-making.