The Beauvais Management Style

Scott Murray recently dropped by to chat with Kevin Beauvais, who is not only the Thailand area GM for Marriott hotels but the President of the American Chamber of Commerce as well. Kevin has been with the Marriott chain for twenty-three years, the last five in Thailand, while before that he worked at Marriott hotels in the USA in Illinois, New Jersey, New York, Minnesota, Massachusetts and Texas.

Kevin arrived in Bangkok in February of 1997, so he had at few months of normality before the July 2 devaluation set in, but as he recalls it was a wasn’t easy trying to get a hotel open and operating in an already overbuilt, overcrowded town with way too many hotels in a country that was going through an economic downturn. The following are excerpts from their interview?

So why did you decide to come to Asia? “I wanted to take the hotel business to a new level in both the physical plant and in service delivery. I thought Asia was the place to do that, so I threw my hat in the ring to be considered for an Asian opportunity. I wasn’t too concerned where I would end up, but when I heard it was Thailand, I was ecstatic

“Asia has always been at the forefront when you think of the world’s best hotels. In Bangkok, Hong Kong and Singapore there have been some remarkable hotels over the years, and they have really pushed the service and facility levels to great heights. And I still think Asia sets the standard for hotels, whether they be small boutique hotels or those that part of a large chain.”

How did these remarkable hotels come about? “Generally, big families were looking for investment opportunities, and in many cases they owned a piece of land somewhere so they decided to build a hotel. And I think when you go to that extreme with the physical plant, you then have an expectation of what the service levels are going to be. You can’t just provide the same service levels; you have to go further and provide an exceptional level of service. I think the two go hand-in-hand, because when you have an outstanding facility it’s easier to push for higher service levels.

“When you look at a hotel like the Oriental, it was recognized thirty years ago for really taking care of its customers. The staff did it the old-fashioned way, with 3X5 index cards, noting your preference, and then making sure that when you came back again they paid special attention to that preference. Today, we are all doing that and it’s easy because of computerization. But the Oriental deserves credit for establishing the system and really worked hard at recognizing guests’ preferences. And that’s what sets you apart in the hotel industry; everyone has nice rooms, everyone’s got nice pools but not everyone pays attention to their customers. Yet, here in Thailand, where people are so service minded, it makes it really easy to do that, because the primary way of thinking is being nice to people.”

What is the key to good management in your opinion? “I think continuity in management is very important. The hotel business is famous for changing managers every eighteen to twenty four months. But hotels that can keep managers longer will do better. I am far more effective today, after working here for five years, than I have been in any other job I’ve ever had, because I have never held the same position for five years.

“But the real key is can you continue to grow the business, and can you continue to provide a difference in the environment? I’ve seen this business grow from being mired in horrible economic times to double-digit growth in revenue, year after year, for the last four years. And that is really amazing when you look at the town we are operating in, and when you look at how overbuilt the hotel business is here. The fact we have been able to grow 17-20% every year for the last four years is remarkable. The first couple years you expect that, because you are coming from a lower base but once you stabilize and you get to the same level as everyone else, and you can still grow at double-digit numbers, it really means you are paying attention to how you grow your business.

“And it’s not just raising room rates, it’s a better yield on who your customers are. It’s looking at restaurants and saying these three are working great, but this one’s not. We took a restaurant that was marginally successful (J.W. California’s), shut it down, renovated it and came up with a new niche that’s really special, the New York Steakhouse, and it’s been sold out every night for the last thirteen months.”

Tell us about your clientele. “The JW Marriott was designed as a corporate hotel, to attend to the needs of the corporate business traveler meeting customers. But in 97 and 98, due to the downturn, business travelers stopped coming to Thailand, so there weren’t as many opportunities and there weren’t as many customers, so by default we went after a lot of leisure business. So for the first year forty percent of our customers came from the leisure market, whereas today only about ten percent of our business is leisure. And that ten percent is when we need it, in April, July and August, the months that are not big business months.

“We now are also now able to use to our benefit the relationships we established in the very beginning with our wholesalers and tour operators. So during the peak periods, when I don’t need much leisure business, I give them a few rooms, and we maintain our relationship. But then during the slow months I can get all the business I need and that’s helped us dramatically because I can fill those traditional valley periods, whereas a lot of hotels in town are sitting empty. So through the year, we don’t really have any peaks or valleys. Our occupancy fluctuates between 80% on the low side to 90% on the high side (we will run close to 84% this year). And the rate keeps growing, so even though our occupancy isn’t changing much, our revenue continues to grow in double digits.

“We are also helped by the Marriott Rewards Program, which with over seven million members, is the world’s largest guest recognition program and sixty percent of our customers last year were Marriott Reward users. (The hotel has 10,000 room nights a month on average.)”

So what gives you an edge in Bangkok’s extremely competitive high-end hotel market? “There’s service and there’s value. The worst hotel in Thailand has great service compared to the world standard. If you look at the service and you look at the value of your product, you will sustain the customer. Everyone can afford to go to the best, most expensive restaurant in town once a year. Not everyone can afford to go there three times a month. So you have to determine how people there are out there and how many people you need to fill your hotel, or restaurant. It’s a combination of service and value.

“The other component is retaining the staff you’ve hired because if you can do that you are going to be far more competitive. We have run single digit turnover numbers since we have opened and that’s made a huge difference in the way we run our business because we are not retraining people every month for specific jobs. There’s also guest recognition that goes along with that, there’s nothing like that lobby bar girl remembering you and calling you by name. That’s really powerful and I think because of the rote learning method here in Thailand people are very good at remembering names.

“I’m amazed at how good everyone here is at remembering names. The key is to understand what’s in the local market and then utilize it. Take the Steakhouse where we have thirty wines by the glass that we are trying to sell every day. It’s imperative that the girls there understand the complexities of what’s in the wine: where’s it from, what kind of grapes are it, what the blend is. And they are better than any staff I’ve ever had because they have good memorization skills. And that’s a huge plus in our industry that not many people tap into.”

Why is your staff staying? “We treat them with dignity and respect. It’s a simple philosophy and everyone says they do it, but how many hotel managers do you see talking to dishwashers or housekeepers? It’s easy to treat the front desk manager with dignity and respect, but to get down on all fours in the dish room and talk to the guys and work with the guys is a different ballgame and that requires a little bit of effort.

“When I first arrived I wanted to sit down individually and talk to each department without their manager about the employee opinion survey but I was told that would never work because they would never talk to the general manager because they didn’t want to compromise their boss, they wouldn’t be open and honest with me and the GM was too high up in the organization for them to talk to. But I was determined that they were going to learn to trust me and to tell me their problems, even if it took a couple of years. Now, lo and behold, four years later, and four opinion surveys later, sometimes I wonder what I started, now they tell me even more than what I want to know.

“We have created an atmosphere of trust, so I can go in and say, ‘What’s the problem, what’s the issue?’ ‘Well, we don’t have enough vacuum cleaners.’ ‘Well how many vacuum cleaners do you need?’ ‘Well, if we had two more vacuum cleaners it would really help.’ Well, you know what? There are two more vacuum cleaners a week later because I can talk to the manager, he can confirm that and then we can go get them. We’ve helped to break down the obstacles. Now what’s happening, four years later, is the managers are asking do you need any more supplies? Do you have what you need to do the job, what are the obstacles? They are emulating what I started four years ago and now it is happening automatically throughout our whole organization.”

How have your middle management Thais, who may not be as keen on getting their hands dirty, responded to this philosophy? “Middle management Thais have risen to the occasion because if they don’t, they no longer work for us. And I think the difference is I am exceptionally culturally sensitive, but I know what works in business for a hotel and I’m not willing to sacrifice that for some Thai taboo. I think you must be willing to work twice as hard than you ever have before, because I think people who think they can work a forty-five hour workweek and still do it can forget it. I have never worked so dam hard in all my life.”

How do you cope with all the demands on your time?“ I am in a position to be Chamber President this year, whereas a year ago, or two years ago, I couldn’t. The stability that I feel now, having been in the same environment for five years, gives me a position of strength, and so I better understand my environment. I understand what’s happening in my hotel, I understand what’s happening in Thailand. I’m also now the Marriott area GM for Thailand, a position I took which I took on last year, so I have additional responsibility for the other five Marriotts in Thailand (there are two hotels in Bangkok, one in Pattaya, one in Hua Hin, the other in Phuket a hotel – which also has a timeshare – and a serviced apartment is under construction on Langsuan, called the Mayfair), but with this extra responsibility I find I can create synergy for all our hotels together and that makes me more productive.

“At the hotel, we have developed a good team of people, which are predominately Thai. When we opened this hotel we had twenty expats, now we have seven. Today those thirteen people that used to be expats are now Thais, and they are doing a remarkable job. We have a better base of stability because now it makes more sense for local people to work with local people, than to bring in foreigners. There’s a time when foreigners are helpful because they bring in a specific skill, or a specific ability, that if used properly can be used to train other people.

“Hotels or businesses that start with twenty expats and ten years later still have twenty expats are horrible teachers. They might be good businesspeople but they are not good teachers. And I think in all businesses, teaching is part of what you do. Our responsibility while being in a country that is not our own is to teach and administer what it is that we know how to do.”

But isn’t it somewhat silly to think that foreigners can teach the Thais anything about the service industry? “We are not teaching Thais about the service industry, we are teaching them specific skills that will help them do their jobs better. We are teaching them about a reservation system, or a method of tracking and booking rooms, or a method of following business leads up. We are taking our Marriott infrastructure, which has existed for seventy-five years, and sharing that with our staff. I’ve hired a lot of sales people, all of whom have worked for other hotels before coming to us, and almost all of them have stayed with us.

“I think we make them successful because of our systems and procedures. And as more people learn and embrace these, they teach other people. When we opened our Phuket resort last December, we transferred forty people from this hotel to the JW Marriott in Phuket. That’s a huge success story: people were able to get a promotion or take a new job in another one of our hotels. So I was able to take forty people and have an instant Marriott pop up in Phuket - add water and stir, suddenly there was a core culture that was there, I didn’t have to bring in twenty expats to open that hotel.”

What about the involvement of Bill Heinecke? “We have two relationships with Bill. One, he is a franchisee, the Bangkok Marriott and the hotels in Pattaya and Hua Hin are franchise hotels, so we give him the resources and the marketing tools and his team manages the hotels, whereas the two JWs are Marriott managed. And in Phuket, Bill is our joint-venture partner; Bill invested fifty percent of the money, while we invested the other fifty percent.”

How do you make sure your hotels are maintaining the high standards that Marriott sets? “We have monthly owners meetings so that we can track key issues and ensure communication, and we do regular audits of the hotels to make sure they are meeting our brand standards and that our guests and employees are happy.

“Marriott is not a large franchisee company of our full service hotels, so we are pretty consistent across the board whether we have a hotel in Dubai, Bangkok or Chicago. Hotels that do huge franchising tend to have huge inconsistencies; one’s a dump, one’s great.”

Tell us about your work with the Chamber. “I have a solid base here, the hotel’s working very well so I am able to be as effective in less time because I have good people who allow me to go outside the hotel and do other things. With regards to the Chamber, I believe in giving back to the environment in which we work is very important and there’s a lot of ways we can do that. This is my second term on the Board of Governors and I have been active with the Chamber since the day I arrived.

“I felt that with a new Executive Director, Judy Benn, and with some basic infrastructure changes, the time was right for me to make an impact on the Chamber with my organizational management ability. Everyone has different skills but I felt that my skill set really matched what was going on now.

“Last year with the Board of Governors I was able to help with the office move, with hiring a new Executive Director, and with getting a new website up and running. But now it’s essential to the operation of the Chamber that we get all of these working together.”

What you are doing differently as President? “I think in the past it was not uncommon for a Chamber President to field a lot of phone calls every day. But I’ve tried to set the Chamber up to operate as a business. The Board of Governors, consisting of fifteen people, is elected by general membership; the Board then elects the President. The President then elects four vice-presidents, who I have given three or four specific committee responsibilities.

“Now when I get that phone call asking for advice on automotive problems I can refer that person to the Chairman of our Automotive Committee; he is expert, he’s working in the automotive industry, and he and the Automotive Committee can help that person with what they need. The Automotive Committee then, if it has a bigger issue, brings it to its Vice-President, who then brings the issue to the board if it needs a position paper, or if needs support of the Joint Foreign Chambers, and then the Board makes final decisions and recommendations. I then champion the issue as the President, but I’m not dealing with every single issue, the same way I’m not dealing with every single issue in the hotel.

“I think this has made us a much more organized Chamber in an extremely short period of time. And it’s a matter of specific roles and responsibilities and more importantly, for a non-profit organization, accountability. Everyone wants to be on the Board, but not everyone wants to work very hard. So now I have four vice-presidents who are held accountable for making sure the committees are having their meetings, that there’s a goal for the year, that there’s productivity and that there are issues being addressed and reported back to the board.

“We are also trying to reach out and make sure we have a Chamber that is inclusive for all people, and I think that’s the real key to what we are trying to accomplish. We need the big multinationals with their resources and their cash and people, but we also need to make sure that we are providing either the resource or the link for our SMEs to get business done in Thailand. And the big multinationals usually have all the support they need; they don’t really need the Chamber, it’s the little guys who really need the Chamber.

“We are also trying things we haven’t tried before. The Aussies are good about social nights, so we have started having monthly social nights, and this has reached out to a different group of people within our Chamber. We have to continue looking for new ways to make sure we get that inclusion and that involvement. Some people want to go to committee meetings; some people want to go have a beer. We have to provide different avenues for people to be involved.

“The other piece of that is our website. Clearly as you look at today’s technology, we had a website that was archaic, so we have invested in a new site that is professional, and professionally managed. It gives people what they need, but more importantly, it gives them a link to anything they need to find.”

What was your criterion for selecting your VPs? “I selected the four individuals because they brought either a wealth of knowledge I didn’t have, or they have leadership skills and ability, and more importantly could assume the presidency in years to come. I think grooming and developing is very important, just as it is in the hotel business, and the Chamber has struggled because there hasn’t always been an heir apparent.”

What about juggling the demands on you as Chamber President? “I can’t be expected to go to every function. In any given month we hold thirty to seventy functions whether it be committee meetings, luncheons, dinners or briefings. That alone can be a full time job and that’s what we expect of our Executive Director, who by and large, attends every function of the Chamber, within reason. So it’s important for me as President to be where I can add value.”

What are your impressions of Prime Minister Thaksin? “The Prime Minister has to be one of the most approachable PM’s we’ve had in a long time. He’s very intelligent and savvy, but I think he has been in a position of such comfort for so long that it’s hard for him to really understand how to reach out to people. His handling of the media perhaps shows some insensitivity. He wants what best for Thailand though, people don’t go into politics to have fun; people go into politics to make a difference. And he’s got the ability to make a difference. He’s the first prime minister to ever have a majority support him in the political process, and that’s a big step forward for Thailand when it comes to political reform. I think we can expect some big changes, some of those will be positive and some of them won’t.

“I think that with Thaksin’s skill, ability and desire, if he has enough good people working with him, and a majority in the House and the Senate, he can really move some legislation forward. Thailand has had so many prime ministers in the fifty years; it’s no wonder that reform wasn’t accomplished more quickly. It’s way too many people in too short a period of time. But if the country can keep people in positions longer, and there’s accountability, I think Thailand can be very successful.

“What has Thaksin done while he has been power? During the election, he promised three things: the THB30 medical scheme; the million baht per village scheme; and the debt moratorium. And you know what? He’s accomplished those; he has met his campaign obligations. So now the challenge is, there has been a lot of talk about a lot of legislation, but where’s the real progress? The current government is at the crossroads where it has got to start to show progress on what its agenda is. I think they have been very busy and very diligent, and they are working on a lot of things, but working on it and getting it through legislation are two different things. Now that there is a majority in the political process, some if these things need to come to fruition.”

What needs to be done to entice more foreign investment? “I think the single biggest issue is we have to do a better job of embracing the one-stop shop mentality. It’s gotten better working through the BoI, but there are still a lot of bureaucratic steps to go through. The one-stop shop for visas has made that process easier, but a lot more needs to be done. By and large, when you look at the countries in Asia that are successful, it’s because these processes are streamlined and more efficient.”

Anything else? “I think what the BoI and the Ministry of Commerce needs to better to understand is that it’s not about who’s coming here. The real issue is about who is not coming here. Who are we losing to China, Malaysia, Vietnam and Singapore, and why? I think a tracking of the business coming to South-East Asia, but not to Thailand, would tell us what we need to change to provide better tax incentives and schemes.”

Ed. note: Kevin is now the General Manager of the JW Marriott Phuket Resort and Spa.