Gus Sader was brought in to revitalize the 296-room Historic Mayfair Hotel Los Angeles in October 2004—a former Best Western that had deteriorated over nearly a decade of mismanagement. After a $40 million renovation, the hotel—built in 1927—is slowlybeginning to mirror the days when movie stars like Mary Pickford and the Barrymores were regulars.
Sader, a graduate of the Institut International de Glion of Montreux, Switzerland, who did postgraduate work at Cornell, worked for Hilton, Hyatt, and Sheraton before being hired by Great Western Bank in 1991 to revive nonperforming hotels and restaurants with loans totaling $1.5 billion. Based on that experience he started his own hotel management company in 1994 to “offer hope and results to owners.” He attributes his success to lessons learned over many years and insights from fellow members of the Turnaround Management Association
(www.turnaround.org), which focuses on corporate renewal in a wide range of industries.
HFBE: What are the most important things you’ve done to turn around the Mayfair Hotel and Orchid Garden Restaurant?
GS: There are five steps I look at when evaluating a property. The first is situational analysis, which means xamining your budget and business plan and assessing strengths and weaknesses of every department. If you find a discrepancy, such as revenue is $100,000 and payroll is $200,000, it’s clear something isn’t clicking.
If you discover that the property is viable but mismanaged, the next step is management change. The issues may be cultural—they didn’t change with the trends, didn’t upgrade the menu and service—or it may be the people themselves. You may be able to salvage some employees but it’s hard to change people who want to stay in their comfort zone. I’ve learned to say, “Thank you for your hard work, but it isn’t working.”
The third step is an emergency action plan so you can stabilize the operation and calm investors who want to sell because they are not getting a return. I will tell the owners, “this business is viable but the existing management is not performing. There’s conflict and turmoil that’s affecting employees morale.” I say, “Give me three to six months, and I will review the whole operation, cut expenses, eliminate waste, enhance productivity and efficiency, so you start seeing results.”
Sometimes the owner does not have the financial resources needed to improve things. They owe money or refuse to put more in, so the fourth step is restructuring the business. We develop a new business plan and budget and go to the bank to say, “Mr. Lender, we need a million dollars,” explaining that to attract new business we need utensils, flatware, inventory, replacements for broken chairs and wobbly tables. The goal is to generate the income needed for a 10 to 15 percent profit over 12 to 18 months.
Return to normal is the last step— when you start seeing less frustration, less conflict, more guidance from leadership, more meetings. Normal things are happening. Guest satisfaction goes up, more conventions com to the property, the marketing people go out with the confidence that they can deliver what they promise.
HFBE: How did you apply those steps to the Mayfair?
GS: This was once the largest hotel west of the Mississippi, built in the twenties by Texas oil tycoons. It truly is historic, so I legally added that to the name when I assumed its management. My analysis told me that the Historic Mayfair has three things to emphasize as a selling tool. First is service—hospitality is based on service. We have incredible employees who are passionate about good service. That gets around. Word of mouth is your best advertisement on the planet. Second, we have very, very clean rooms. I’m honest, I’m a 3.5 star hotel and my product is tired, but the comfort is there. Housekeeping was a big focus when I took over. Now people walk into the rooms and say, “My god, it’s so clean.” It’s part of the return to normalcy—everything is clean, housekeeping has nice uniforms and name tags, rooms have all the amenities—new coffee machines, hair dryers, wireless Internet. Third, our hotel is very secure. That’s important to guests in downtown L.A. near the convention center.
HFBE: Where does the restaurant fit into your makeover?
GS: Breakfast was doing well, but we’d have only 10 to 15 customers for lunch and dinner. Six months later we won the best buffet lunch in town. Lunch and dinner shot up--475 to 550 covers a day. The value is terrific, we have great versatility, and our soups are absolutely exquisite. It’s a very international clientele and I take good care of them. My menu is American and European, and our new menu explains the origin of each plate—beef stroganoff from Russia, pizza from Italy. The buffet is a huge selling point for my banquet business.
HFBE: You talked about replacing staff who won’t change, but your chef has been there 20 years. Why?
GS: When I came on I said, “Chef, this isn’t working,” and he said, “Mr. Sader, thank you very much. I’m glad you are here.” He’s loyal and talented but wasn’t getting recognition or the opportunity to be creative. He listened to me, and a month later, I couldn’t believe the change.
HFBE: What’s the secret to being a successful manager in this business?
GS: You have to think like an entrepreneur. For example, our overnight guests pay $6 for parking, but lunch customers pay only $1. Who would pay $6 for parking when lunch is only $9.75? And what do I lose? They save money on parking and spend it on a $4 beer or $6 cocktail. You have to be a bit of a psychologist and must understand what guests want. They love that the Mayfair is a real value.
A good manager can’t stay behind a desk. You have to walk the property. I observe my employees, I give them feedback. But I never reprimand. If there is something to correct, I wait until they are alone and we talk about it.
My sales manager just left to join the convention bureau, so I learned all I could from her beforehand. We went out on calls together. It’s very important for clients to see the general manager visiting them, and even when I hire a new sales manager, I will continue to call on clients.
Vicki Meade is a frequent contributor to HOTEL F&B EXECUTIVE.
