Why would a hotel owner need an asset manager? The unique skills and knowledge an asset manager brings are invaluable. While a strong general manager may report directly to ownership, an asset manager or consultant can provide expertise in areas such as digital marketing, revenue management, engineering, housekeeping, front office operations, food and beverage, sales, and most importantly, budgeting and financial management. Their safety and security knowledge is often beyond that of many GMs. They also have the contacts to hire everyone needed and understand the human resources and legal requirements of operating in your state.
Embrace the relief and peace of mind that a comprehensive asset management process tailored to your specific needs can bring. It involves a deep dive into historical financial information, the annual budget, and your business/marketing plan, all with the best interests of the hotel and the owner in mind. This thorough review ensures that no aspect of your hotel’s operations is overlooked, providing a sense of security and comprehensive service.
The firm does not need a proprietary assessment mechanism to evaluate the market and competition, carefully review the management agreement, and regularly meet with property team members to understand focus and direction. However, the asset manager or consultant must be at a level well beyond the GM and must be able to:
Monitor the hotel’s financial performance, analyzing revenue, expenses, and profitability
Provide market analyses and develop long-term strategies to improve the hotel’s market position
Refine operations to increase efficiency and reduce costs
Identify and mitigate potential risks to the hotel’s financial health
Work with ownership to make informed decisions about investments and potential sales
Enhance the hotel’s brand and market presence through targeted marketing and sales strategies
Implement improvements and upgrades to increase the hotel’s value over time
In essence, an asset manager helps ensure the hotel is a wise investment, maximizing its potential while keeping a close eye on its day-to-day operations and market trends.
What should you expect from a professional?
You should receive a monthly summary report for ownership, including a review and analysis of hotel operations and financial statements, budget, and capital improvement reviews. Additionally, sales and marketing evaluations, a review of expense requests, third-party contracts, leases, and concession agreements, and any spending outside of the budget or national averages are required. Thisregular reporting will keep you informed and in control.
Annual reporting should include a review of the annual business plan and assistance with its preparation, custom-made to the owner’s needs. It should also include historical performance, forecasts, capital expenditures, budgets, market summaries, capital account summaries, and return on investment analyses.
Who performs the asset management?
If you require a team due to the sophistication of your business, a strong operator, marketer, and finance executive makes for a good team. Hospitality principals typically assigned or available to assist might include a CFO, HR expert, and other disciplines as needed. A food and beverage executive is a must for a full-service hotel. If you have a simple, limited-service hotel, a consultant can assist if he/she is a strong generalist. With a robust asset management team, you can feel empowered and supported in your business decisions.
Given the current debt scenario, where loans are maturing, a seasoned pro or asset management team can advise on renovations, using automation/technology at the hotel, and much more. The hotel industry is now more science than art. The team that an asset manager or consultant can bring might include a broker for loans or valuation or any number of experts. Typically, you can get free advice from a consultant on your first visit.
Special Note: Our thoughts, prayers and empathy are with our Los Angeles area brothers and sisters – to all hoteliers, please consider being generous with any of our neighbors in LA who need short-term accommodations!
Robert A. Rauch+1 858 663 8998R.A. Rauch & Associates, Inc.
