Once there was a hotel in a big city. This hotel was achieving on average 80% occupancy, a good and profitable situation. However, it was hard work. Most guests stayed only a night or two, and there was strong competition from other hotels in the city.
One day, the manager thought about this. "My people are spending too much time trying to win guests. They are too busy with promotions and marketing, and competing to win business is a big distraction". So the next day he announced a change in policy. From now on, all guests would have a minimum stay of 6 months. He decided to apply it immediately, affecting all the guests currently in the hotel, even though most of them only needed to stay for a day or two.
The next day the manager pointed out to his team that there was no need to waste time trying to win customers, because with his new rule, high occupancy was guaranteed for the foreseeable future. He reassigned the sales and marketing people to long term strategic planning and projects.
Some of the guests were very annoyed, but other guests thought that since they had to pay for six months, they would cancel the rest of their business trip and just stay where they were.The hotel was very busy and quite a jolly place, although in actual fact guests were slowly leaving. However, they paid for the full six months, so everyone connected with managing the hotel was quite happy.
After a couple of months, one of the former sales people decided to look at the bookings. Surprisingly, he discovered that no new customers were booking into the hotel. He took this information to the manager, who quickly realised that this would cause a problem once the six months was finished. The hotel would be empty. He looked into it further, calling some regular guests who were no longer booking when they travelled to the city. Time after time, he was told that they were not interested in six month stays, only wanting to stay for one or two nights. For this reason, these former customers had regretfully transferred their business to other hotels in the city.
The manager decided to pose this problem to his teams now busy with long term planning. Quickly, they realised this was a serious problem.
However, it wasn't long before the solution became clear.
The next day, the manager invited the managers of all the other hotels to a meeting. He explained the benefits he saw from imposing a minimum stay of six months, but there there was a problem because other hotels were still offering one or two night stays. The managers from the other hotels were very impressed.
The next day, they all announced a minimum six month stay.
For some reason, shortly afterwards, the convention centres in the city closed down. A few months later, the managers of the hotels in the city travelled to the state capital, to lobby the government about unfair competition in other cities.
I wonder how this story will end.