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Hanover Inn R. I. P.

Hoops.jpgHave you ever wondered how well a private sector business would do if it were run as efficiently as Dartmouth College? Well, wonder no more! Today we are going to take a look at the Hanover Inn.

To say that the Inn is an under-performer is to emphasize the obvious. Despite its great location, elegant facility and the guarantee of steady College business, the Inn has lost money for several years. But now, in a sign of life from the Kim administration, the Valley News reports that the Inn may soon be given over to a private investor/manager.

Good for the Kim adminstration for looking afresh at this idea. Competent operators have long recognized that the Inn is badly managed; during the Wright years several hotel investors approached the College with proposals to take over management of the property and pay the College a guaranteed rent — only to see their ideas disappear into Parkhurst’s black hole of indecision. Sound familiar?

The hotel market in the Upper Valley has been strong for years. In the last decade, two new Marriotts were built in the Centerra Park just outside of town, and the first one has already added additional rooms. More recently, a boutique hotel has been trying to get planning approval for a downtown Hanover location. Occupancy rates for the Marriotts have long been well north of the sad 67% reported by the Inn. The restaurant business also does well, and the lively Canoe Club across the street from the Inn has been a success since it opened six years ago.

So why is the Inn failing? Why is the Daniel Webster Room — which should be the Upper Valley’s best restaurant — no longer open for dinner? Why do the amenity baskets in the rooms contain Goldfish cracker packets that are past their sell-by date, as President Kim himself perspicaciously noted? (Don’t laugh. I like this kind of attention to detail.)

The answer, friends, is that the Inn has been terribly managed for ages, but the reason for that fact might surprise you: the culprit is the College’s eight-person Office of Institutional Diversify and Equity (OIDE), currently run by a member of the Wright Olde Guard, Holly Sateia — a 35-year Hanover veteran.

Though its pressure has loosened up since the McKinsey Report, for many years OIDE made the Inn jump through the same diversity hoops in hiring that hobble the rest of the College. These restrictions may not be that much of a problem when hiring academics (the schools with which Dartmouth competes move equally slowly), but in a job market where good people get snapped up quickly, a competitive business can’t wait for months and months for the diversity bureaucrats to affirm that its search and hiring processes were sufficiently inclusive, and reached out to members of diverse minority groups, and ensured sensitivity to … well, you get the point.

By the time the Inn’s overseers had actually met all of OIDE’s cumbersome requirements and then waited for OIDE to certify that they had done so, the only people still around to be hired were, well, not the crème de la crème of hospitality professionals. The end result? The Inn has suffered from a consistent stream of bad management decisions large and small over the years, like spending upwards of $500k to refurbish Zin’s, or devoting untold employee hours to diversity exercises and the kind of soft-headed management training that passes for professional development at Dartmouth.

The Inn’s indelicate managers treat its rank and file employees so poorly that in 2005 the troops decided to unionize in order to defend themselves. Don’t get me wrong, I am no supporter of labor unions, but I believe that the old saying is accurate: management gets the union that it deserves. The Wright administration used to saw on and on about its spirit of community and such, but behind the PR façade its employees were calling in the Service Employees International Union Local 560 to protect them from the Inn’s managers. (This vignette is a pretty good metaphor for the past decade, don’t you think?)

Any competent hotel management firm looking at taking over the Inn is now going to have to contend with a tough-minded union, which will cost it time and money. Result: the College will get a poorer deal than it might otherwise have received.

The Valley News article ended with a lovely little coda, the kind of sotto voce editorial that a good writer inserts into a story without comment, but that an attentive reader savors. Reporter Susan Boutwell slyly chose to ask for an opinion on the Inn’s predicament from Joan Vogel, a labor and employment law expert and professor at Vermont Law School. Professor Vogel chirped: “Workers are right to worry about outsourcing. They want to preserve the pay and benefits they’ve accrued. They don’t want to be part of the typical corporate mentality.”

The typical corporate mentality? Does she mean the one that gives good service, satisfies customers and makes a profit? To her credit, however, Professor Vogel’s remark does summarize quite succinctly — even if inadvertantly — the Inn’s current problems. Sign her up to work for Dartmouth’s Office of Institutional Diversify and Equity. She’ll fit right in.


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