I had the great pleasure of living in London for nine years. I saw boom and I saw bust. My happy shiny new London home dropped 50% in value as soon as it was bought. That experience made its mark and it was to prove fortuitous.
Ireland from around 2003 to 2008 lost control, its head and its reason. Property accelerated to levels higher than the best parts of European capitals – a fall from grace was inevitable. Pain was lurking and pirates were about to rush onto the high seas.
Turbulent is an understatement and hotels were right in the line of the tornado.
Exploding property prices created pyramid style wealth. Wealth created greed and greed fuelled oversized egos.
All of a sudden, property developers became expert hoteliers. They built lighthouses in bogs, created chaos and destroyed the carefully built hotels and hoteliers woven intricately over the years. It was inevitable that their house of cards would tumble and sadly, they would take down the good guys in their collapse.
Central to the chaos were two factors. First, there was an oversupply of bedrooms. Second, in the feeding frenzy at the trough, training, education, serving time and investing in service went out the window. Business was too good and problems could be solved by writing a cheque.
The future horizon was easy to assess. There would be three results. Good hotels and hoteliers would survive the storm with a lot of pain. Bad builders with big egos would cause untold damage. Small guys would get caught in the fall out.
...and that's exactly what happened!
In October 2008, at the beginning of our own personal recession, I wrote a letter to The Irish Times. Four years on, it is valid. Here's what I said then;
Ten Reasons Why a Recession is Great
I used to enjoy reading the newspaper. Today I don't, I'm almost afraid. You see, this recession thing has become a national obsession. It dominates our every move, twist and turn.
First there is fright, followed by panic, then heaps of fear and piles of anger. When all that settles down we are left with a dreadful hollow empty feeling and a terrible dread that recession will become depression.
But I'm not convinced recession is such a bad thing, in fact, I have come to the conclusion that a recession is great. The problem is, the more we have the more we think we need.
Let me tell you 10 reasons why:
- It means we have to solve problems without money.
- It asks politicians to solve problems without writing a cheque.
- It restores our view on the value of that little nest egg.
- It proves those funny little things can go down as well as up.
- It makes us appreciate everything that is free.
- It refreshes lost values and reinforces the joy of family, home cooking and being happily creative.
- It means we can relearn how to say 'no'
- It proves a whole generation wrong.
- It rebalances the soul of the nation.
- It releases us from greed, gluttony and excess.
- As the song goes, and what a good time to sing it! "Always look on the bright side of life".
Today, Irish hotels are in a very different place. Slowly they are coming out from four years in a deep dark trench, a battlefield. Some died, some have proved heroic and some fell on their own sword. The market had decided. Water was returning everything to its own natural level.
Good guys survived, pirates perished and some small guys were hit by the debris.
What lessons did the survivors learn?
- That the hotel business is not about revenue management first, it's about people.
- That real, sincere and humble service still wins every time.
- That arrogance, pomposity and greed are the death knell of any business.
- That staff matter and need to be grown, developed and nurtured.
- That marketing is more important than ever.
- That price, any price, needs to be fair and represent true value.
- That selling means going out and meeting people.
- That "it will do" won't.
- That the market decides.
Our hotels and hoteliers are world class. Just look around at the best hotels in the world and note the Irish name at the top.
As a people, we have suffered famine, poverty, oppression, conflict and really bad leadership by inept politicians. But Irish people are warm, friendly, welcoming and cheerful. More importantly, a history of struggle has made us resilient.
We have bounced back before and we are bouncing back again. We have learnt our lesson, we are applying those learnings. As the letter above said "always look on the bright side of life"
We are and we will and we are wiser for it.