When it comes to managing a hotel, owners often rely on trusted hotel management companies to oversee operations and drive performance. While these partnerships are critical to the success of a property, there is another player that can provide unparalleled value to owners: the hotel asset manager. Acting as the owner’s advocate, a hotel asset manager brings a strategic, financial, and operational perspective that is fully the vision of the owner.
At LHA we put together some of our thoughts on ways asset managers bring value to the table that could be helpful in evaluating your current needs for an asset manager.
Revenue Optimization and Expense Control
Hotel management companies are focused on day-to-day operations, but an asset manager specializes in a big-picture view of revenue and expenses. They analyze revenue streams across all departments to ensure every opportunity is maximized. They can also uncover cost inefficiencies, such as excessive labor costs or high vendor pricing, and implement strategies to reduce them without sacrificing quality.
Advocating for Ownership’s Interests
A hotel management company often prioritizes their own standards or the brand standards, which may not always align with the owner’s financial goals. Asset managers provide an unbiased perspective, ensuring the owner’s vision is at the forefront of all decisions. They hold management companies accountable, questioning capital expenditure (CapEx) proposals to ensure they deliver measurable ROI and are truly necessary.
Strategic Capital Expenditures
Speaking of CapEx, asset managers are instrumental in guiding investment decisions. A management company might suggest costly renovations to meet brand standards or enhance the guest experience, but are these upgrades aligned with the owner’s long-term financial goals? An asset manager conducts feasibility studies and ROI analyses to ensure every dollar spent works harder for the owner. They’ll also negotiate with contractors and vendors to get the best pricing.
Operational Efficiency
From staffing levels to energy usage, asset managers delve into the details of daily operations to identify inefficiencies. For instance, they might recommend energy-saving technologies or adjustments to housekeeping schedules that reduce costs without affecting service levels.
Crisis Management and Risk Mitigation
Whether it’s navigating a pandemic, responding to natural disasters, or addressing economic downturns, asset managers provide strategic guidance during crises. They utilize years of experience to help owners adapt quickly and mitigate financial risks, ensuring the property remains resilient.
Maximizing Asset Value
At the end of the day, a hotel is an investment, and an asset manager’s primary goal is to maximize its value. They work closely with owners to develop long-term strategies that align with their financial goals, whether that means increasing cash flow, improving the asset’s market positioning, or preparing the property for a profitable sale.
While hotel management companies are vital to operational success, their priorities may not always align with ownership’s long term financial goals. A hotel asset manager acts as a dedicated advocate for the owner, ensuring that decisions are made with a focus on maximizing profitability and long-term value. From identifying revenue opportunities to preventing unnecessary expenditures, their role is indispensable in protecting and growing the owner’s investment.
If you have questions about the role of the asset manager, we would be happy to provide more information. Send an email to Teresa Holden at [email protected].
Additional articles on luxury hospitalty are available at the LHA library.