Hiring a Hotel Management Company: 4 Things to Know
Finding the right hotel management company is among the most important decisions a hotel owner will make.
Once hired, a hotel management company manages the day to day operations of a property including hiring staff and marketing to more complex functions like revenue management, and business administration.
Hiring the right company can mean the difference between a property that has a steady flow of guests and one that is struggling to keep the lights on.
As experienced owners and operators, Naples Hotel Group understands what it's like to have to pay the mortgage on a hotel asset. We have worked with several investors who want to grow their real estate portfolio with a hotel but don't want to dedicate the resources to operate the hotel.
Over the years we've learned a few valuable lessons that have contributed to our success in hotel operations and our client relationships. Here's a list of what you should look for when hiring a management company:
Find the Right Fit
Seek a management company that has experience managing a property like yours. A hotel management company with a plethora of boutique hotels in urban downtown areas may not be the right fit for your branded hotel in a business district. It’s about finding someone you can trust, enjoy working with and has experience growing your type of property.
Consider Fees & Underlying Costs
Fees are one of the most important considerations when choosing a hotel management company. Savvy hotel owners want to control fees and maximize their revenues. The right hotel management company will want to do the same. A simple fee structure that keeps labor models and operating costs in line is a simple way to improve your bottom line. Being an active operator has helped us fine tune the budgets for each of our hotels so it's easy to spot when an expense is out of line. Having longstanding relationships with vendors keeps prices low on service.
Agree on Expectations
What are your expectations for the property and did you communicate them? Are you a new owner looking to grow, or an existing owner looking to reposition properties? Knowing your property’s needs and potential for financial performance is integral to setting expectations. That includes your property’s location, market, room count and meeting space. This is the analysis Naples Hotel Group considers when we put together a strategic action plan to execute on the owner's expectations.
Seek Accessibility and Transparency
Can you contact top executives within the management company when you have a question? Are they able to provide you with references or case studies from other properties they’ve managed? The hotel property is your asset as the owner. It’s the management company's job to care for the asset and ensure it is producing revenue. Maintaining good lines of communication between the property owner and management company are imperative.