“You need someone who can ask the right questions, capture and interrogate the information given to ensure that the hotel is running as it should, and who can indeed determine if you are making optimum profit.”
Having the money to invest in a hotel is one thing. But knowing how to run a hotel is a totally different ballgame. A degree may not be the solution. Having years of experience – on the other hand is a valuable tool when running a profitable and successful hotel. A hotel is a heavy investment. Getting a management company on board will take the headache away if you know exactly what to look out for and what to expect from them.
Know the Company
Take your time when vetting the management companies to ensure that you sign up a good reputable one. There are hundreds of management companies, and all of them will come with glossy proposals on how much profit they will make for you, cost-cutting measures, revenue tools and important networks that they have that will maximize income. You need to do a thorough background check before signing them up. Look at their track record, talk to other hotel owners who have worked with them, and monitor their stability. If they keep de-flagging hotels, you need to know why.
One size doesn’t fit all
Sign up with a management company that best fits your property. If your property is a beach resort, look for a management company which has similar hotels in their portfolio. More often than not, your property being the green apple among red apples could mean that is a new area they are getting into. Management companies plan their PR, sales and marketing activities to cover a majority of hotels within their portfolio, and then segment these activities in regions. If your property’s business model is different, you find that most of these activities may not work for your hotel. On the same note, the management company may not be in a position to invest a lot of energy and resources for one property.
Understand their Human Resources structure
Understanding the management company’s structure will help you understand their salary and wages expense. Management companies have varied staffing structures. You find some have certain positions that have to be filled by expatriates, especially in Africa and Middle East. Understand their salary and benefits structure, which in most cases, varies with regions but is a common practice in all hotels under their portfolio. Their staffing, salaries and wages structure will definitely have an impact on your profitability.
Know the basics and know the details
You cannot afford to know nothing about the business you have invested in and given someone to run it for you. If you cannot go to a hospitality school, hire an owner’s representative who has a very strong hotel background, at the managerial level. There are terminologies which will be used in reports and owner’s meetings that will definitely pass you by if you are completely green. You need someone who can ask the right questions, capture and interrogate the information given to ensure that the hotel is running as it should, and who can indeed determine if you are making optimum profit.
For more information contact: info@thehospitalityconsult.com