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The Value of Human Capital Investments
Federico Moreno-Nickerson, Vice President Of Development, Apple Leisure Group (ALG)
For many hotels, training can be viewed as another expenditure driving up already high labor costs.This is not the case at all. In fact, CBRE’s 2016 report Trends in the Hotel Industry found that total labor and related expenses accounted for 42.8 percent of total operating expenses in 2015. While the number is an average of labor costs incurred by U.S. properties, it is also a strong indication of an issue faced by many hotels worldwide, including various resorts in the English-speaking Caribbean and Europe, where there are several AMResorts®-branded properties. Each team has a host of cost control measures put in place, depending on the needs of the hotel and local laws governing labor. However, ALG also views staffing expenditures as an investment.
Labor Costs vs. Training Investments
As Robert Mandelbaum, Director of Research Information Services at CBRE Hotels’ America Research pointed out in an article in Hotel Management, “to extract value from rising labor costs, the training of hotel employees is critical.”
Regardless of where resorts are located, we have long shared Mandelbaum’s view that employee-training programs can result in increased productivity, improved guest satisfaction, revenue growth through upselling and lower employee turnover rates. In addition, as ALG offers resort brand management, through AMResorts, in 28 destinations across seven countries, we are in a stronger position to focus on career and skills development at the managerial and executive levels.
The nexus between hotel profitability and investment in mid-management through executive-level staff is salient. These are the team members who are deciding and executing revenue management strategies, efficient operational systems and budget forecasts. So it’s imperative to attract talent that already comes to the role with strong fundamental knowledge and experience.
Through a New Generation Management Trainee Program, middle managers acquire the skills to adapt to operations across our various destinations. We maintain this existing talent pool of qualified managers from which we can readily staff new hotels and segue the properties from ramp-up period to profitability much more quickly.
Building Talent Pools for the Long Term
ALG additionally offers an Executive Development Program, for top corporate officers, general managers and their direct reports, and a Managers Development program, for all key members of a property’s operations team.
Keeping hotel managers and executives abreast of the latest technologies and strategies on the market can result in enhanced hotel revenue
The first program is done in conjunction with Cornell University’s SC Johnson School of Business; the second with the University of Pennsylvania’s Wharton School of business.
Both curriculums provide top talent with a well-defined career path that will allow them to grow with the company and allow AMResorts to maintain greater retention among company managers and executives.
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As Deloitte states in the report What Price Talent?, “talent pipelines run on longer time-scales than economic cycles or short-term strategic targets.”
The significance of retaining staff at the managerial and executive levels is typically obscured by the conversation surrounding frontline labor issues. But the resources and time invested into staff development at ALG have resulted in higher employee satisfaction, with the latest anonymous survey showing a nearly 90 percent satisfaction rate.
In addition to employee happiness, AMResorts corporate culture has also resulted in various industry accolades, including being ranked fourth in CNN/Expansión Magazine’s list of Mexico’s best company cultures in the 2019 survey. Acknowledgements like this, coupled with our training programs, have contributed to our reputation as a hospitality employer that offers career longevity.
As Deloittle’s What Price Talent? report puts it, “Return on Invested Talent (ROIT) represents a lens through which the complexities of the financial impact of talent can be analytically viewed retrospectively and converted into the more financially nuanced perspective of the boardroom and wider investment communities.”Building a talent pool for the long-term is essential to building better bottom lines.
Teaching Today’s Strategies for Tomorrow’s Growth
The hospitality industry is a rapidly changing business landscape where revenue is impacted by new technologies constantly coming to market and travelers’ evolving purchasing habits.
ALG’s vertical distribution strategy plays a major role in driving revenue for resort owners. But training managers and executives on cutting edge approaches to revenue management and operations, as well as sales and marketing, equips them to further increase hotel profitability.
We have forged partnerships with leading institutions worldwide, including Cornell University for a three-year Master Certificate in Hospitality Management, and with Mallorca-based tourism education institute JSF Travel & Tourism Business School on a three-day executive summit on maximizing digital offerings, to make our staff stronger in the key areas of resort management while supporting their ongoing professional development.
Along with the long-term career prospects that our management training programs offer our team members and prospective hires, it is through these programs that we ensure our managers and executives are continuously educated on the latest tools and strategies affecting hotel revenue today.
Career Development at Every Stage of Advancement
We also recognize that some of the most successful hotel executives have risen through the ranks, starting their hospitality careers in frontline jobs.
So ALG also has fundamental key talent development programs in place at all AMResorts-branded properties: a minimum of one dedicated training room, one full-time training manager with a year-round training program and a full-time English instructor in non-English speaking destinations.
Beyond these vital elements, ALG has additionally rolled out official training centers throughout various properties. To cultivate the skills of operational staff and executives at Dreams Tulum Resort & Spa, ALG partnered with Mexico’s Anahuac University to develop a curriculum that covers areas such as Sales & Marketing, Advanced Management, Leadership for Senior Executives, Front Desk, Human Resources, Food & Beverage, Housekeeping, Budgets and more. In 2017, we trained more than 1,200 AMResorts leaders.
This comprehensive selection of training and development programs are an investment for ALG. Certainly, they give ALG a more competitive edge when attracting candidates from top talent pools.
Deloitte’s 2017 Global Human Capital Trends report finds “companies with dynamic career models outperform their peers by providing continuous learning opportunities and a deeply embedded culture of development.”
With five active, formalized training and development programs and the potential for still more in the future, ALG is a frontrunner in hospitality career development, giving our owners an unparalleled competitive edge.