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Drawing upon their decades of experience in the hospitality industry, Karima Zaki and Stephen Beck founded Strato Hotel Consultants last year. The principals of the San Diego-based firm focus on aiding smaller, boutique hotels–independent or franchised–weather the current economic storm with an array of services that include sales and marketing strategies to yield management and operations, as well as filling executives positions at the property. Its staff of 15 is currently working on assignments for 10 hotels. GlobeSt.com recently spoke with Zaki about the company, the impact of social media on room-night sales and what hoteliers can do to survive today.

GlobeSt.com: Why did you launch the company?

Zaki: My partner and I both worked for Hilton Hotels. I was an area vice president and he was a regional director of sales and marketing. What we could see in our roles was that sometimes the interests of the owners and the interests of the brands didn’t necessarily overlap. When we went out on our own we wanted to take our expertise, the experiences we had collected over two decades, and go to ownership groups of smaller hotels that didn’t necessarily have the resources that a big company like Starwood, Hilton or Hyatt has. And say to them, ‘You need these resources, but you don’t need to hire them permanently onto your staff. You can use us.’

Our firm is not just a sales and marketing or a management firm, which is what most of them out there do. We don’t do only feasibility studies. We can identify what the problem is and bring the solution to the table. That is what stands us apart from some of the other companies that do bits and pieces of what we do.

We saw the writing on the wall. We launched the company last year when business travel was starting to be viewed differently. AIG highlighted that fact when it had a big party even though it was taking TARP money. We knew these times were going to be even more difficult. We need to strap in and be prepared for an E-ticket ride because it’s going to get really interesting out there, and for a while.

GlobeSt.com: What can your group bring to the market that other hotel groups don’t?

Zaki: We require significant experience and depth in order to work with our group. Our folks typically come from large operators and have regional and senior level experience. Very often firms hire very young people right out of college, who do a lot of the analysis work, but who don’t necessarily have on-the-ground experience. Without a doubt, that is our biggest difference. When we go into a hotel, we don’t look at it from the viewpoint of, ‘Gee, I wonder how to fix it.’ We’ve experienced it in one way or another already and we’ve already been in a position where we were called on to fix it. Rough times bring out a whole different skill set. It’s very different from operating a hotel when times are booming, like they were in ’05, ’06 and ’07, when you would practically throw your door open and people would come.

GlobeSt.com: You target smaller, boutique and independent hotels. Why? Will you work with franchised hotels?

Zaki: Yes. We offer our services to ownership groups that don’t necessarily want to start hiring an attorney or a revenue management person full time. We can offer all of those services to level the playing field with the big boys. Because we come from the big boys, we know how they operate. And there is really no reason, especially with the Internet and social media, why a smaller independent operator, even if it is franchised, can’t succeed the same way the bigger hotels can. The conversation in the next year or two within the brands is going to be how do they reinvent themselves because the need for a big brand in order to draw people to your hotel is waning as we speak. If you’ve got a really sharp website, a good marketing effort going on and if you know where your presence needs to be, you don’t need an 800 number anymore. The brands need to be talking about that now, but I’m afraid they are not going to talk about it for a while.

GlobeSt.com: Can you discuss your current assignments and who is asking for your services?

Zaki: I can’t disclose the properties. But I have gotten a reach-out from several capital investment groups who are looking to line up their resources to start going into the hotels and doing assessments. Some of these folks have between $30 billion and $50 billion worth of money to invest and they are waiting to assess whether the bottom has been hit or not. We have met and have come to a fee schedule agreement to where we will be dispatched pretty soon by the lending and the investment community to go in and help. We are poised to do a variety of things. We can either fix it before it’s completely broken. We help can from the receivership end if the court says it’s broken. Or we can help keep the interim [management] going until a building either goes into foreclosure or is put on the market voluntarily. In some cases, I’m hearing that some owners have come to the point where they are just saying, ‘I’m defaulting on this and I’m giving you the keys back.’ In those situations, the lenders are sitting with assets on their hands that they don’t know what to do with. They are not hoteliers, it’s not their core competency. We are poised to interact in any of those situations and the calls are coming in probably twice as much as they were even three weeks ago.

I chatted with somebody yesterday who had three hotels. For him, the difference between defaulting on a loan and being able to just survive until the crisis is over is probably about six to eight points in RevPAR. We looked at his portfolio and all of his hotels are underperforming to the market. So there is an opportunity for us to keep him afloat for a year until the crisis is over. That is exactly what we are skilled in doing.

GlobeSt.com: What is the impact of social media on sale of hotel rooms, and how can a hotel owner take advantage of it?

Zaki: In July, we conducted a conference called, “Social Media Explosion Meets Hotel Marketing.” People talk about social media, but a lot of people really don’t understand it and don’t feel comfortable enough to jump in. The misnomer out there is that you have to do everything all at once and you really don’t. First of all, two very critical things have to be in place. Your product has to be good and your service has to be outstanding. You can’t invite people in and then not give them memorable experience to talk about. And you must have a really good website because social media should drive traffic to it, and it should be a great storefront that represents you well. It’s like going by a retail window. You are not going to have beautiful things inside and leave the window dressed with your subpar merchandise. It doesn’t make any sense.

Having said that, a hotel, especially a boutique or independent property that has a great presence on Facebook, that is controlled by the property, needs to say relevant and conversational kinds of things because your social media conversation is not advertising. If you approach it from an advertising or marketing standpoint, people get that and it turns them off. They want to hear relevant things as to what might interest them. If you’re an independent hotel that has a great restaurant or you are in an area that does wonderful things, you are even more at an advantage. You can continue that conversation about things that people find interesting. There are some hotels here in town that tweet about the SeaWorld fireworks, or the temperature of the water and the surf conditions. Those are things that are interesting to people and keeps your presence out there and it keeps the conversation going. We are big advocates of it. What we are not advocates of drawing with a broad brush. Not everything venue or medium is appropriate for everybody. We can identify what a hotel should be in and what is okay to leave behind as opposed to saying, ‘you should all be tweeting’ or ‘you should all be on Facebook or LinkedIn.’ It’s not that kind of a solution.

GlobeSt.com: What can hotels do to survive today?

Zaki: The hotels that are going to suffer the least recognize that regardless of the economy people are still very conscious of price value and they are willing to pay for what they feel is a good value. You can add value without adding cost. You really can. Something as simple as really focusing on your service levels can set you apart from the guy next door. And that means not having to cut rate, but being able to justify the rate that you are charging is fair. We are not advocates of cutting rate for the sake of cutting rate.

I stayed at a hotel recently where they stopped the concierge services at 8 p.m. It was a resort, and I will tell you the room rate was hefty. I can understand cutting the concierge service, but the hotel had put nothing in place to replace the process, not necessarily the person. So if you got shifted to the front desk, they simply told you the concierge was closed and they couldn’t help you with anything. It would have cost very little to train the front office people to be able to carry that baton through to the evening, but it wasn’t thought about. They just cut the service. Those are the kinds of things that are strategic mistakes that don’t need to be made. I wrote about the experience. I went on Yelp.com and said I was very disappointed. I paid a very high rate and didn’t feel the service was commensurate with what I paid for. Hotels can cut too quickly and it’s not always the smartest thing and it certainly is almost always a mistake in the long run.

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