With recession-focused concern at the forefront of industry conversation, hotel owners and operators are dusting off contingency plans and discussing how best to prepare and plan ahead for the economic impact. Historically, when the hospitality industry faces a downturn, properties search for cost reductions and often consider clustering regional operations. This approach can be adopted for a number of reasons – such as the benefit of minimizing operating costs across a group of hotels, while also retaining coverage and focus on necessary tasks. Although positive reasons to embrace this style of management during a downturn, this is also a great tactic to use during times where labor is scarce – empowering fewer dedicated employees to implement their expertise across multiple properties.

“Clustering with a purpose” is a very valuable strategy that independent third-party management company, Sightline Hospitality, has used for years with their hotel properties located in markets like the Hawaiian Islands during both good times and bad. Leveraged most often in sales and marketing departments – by practicing this method, Sightline’s clustered properties have outproduced the competition and streamlined functionalities. Additionally, this approach is highlighting specialized roles, and as a result, boosting overall productivity and professional confidence.

While effective, this management style comes with the negative stigma that ‘clusters breed properties with no individual personality.’ This ideology is the complete opposite with Sightline Hospitality – instead, the third-party management company’s core values are rooted in insisting that each property within their portfolio maintain their own unique offerings and identity. With such a diverse portfolio of hotels, each with their own specific DNA, Sightline’s use of the cluster method in the Hawaiian Islands exemplifies their value of honoring and celebrating that individuality. Each hotel embodies their own signature that Sightline proudly embraces and develops the ongoing strategy accordingly.

As stated, clusters are usually implemented during times of economic downturn – but could they be here to stay for more management companies? Finding talent can be difficult in certain geographic markets due to a number of obstacles such as general interest in working in the hotel industry and cost-of-living increases. According to the U.S. Bureau of Labor Statistics, job openings within the hospitality and leisure industry are approaching all-time highs. This statistic showcases the significance of labor shortages that hotels are currently facing – so in some cases, maintaining this management style indefinitely can serve to be very valuable. Since utilizing this strategy, Sightline has seen above average revenue growth in the Hawaiian Islands due to an impressive increase in sales production for the clustered hotels. With this positive outcome, the third-party management company will most likely implement the “Clusters with a purpose” strategy in additional regions moving forward.

Eliminating/combining roles and job functions to reduce expenses during an economic downturn may be shortsighted. Consider “clustering with a purpose” today to retain/promote good talent, support professional expertise in key positions, outperform the competition in sales production, and enhance operating margins across a group of participating hotels.