Third-party managers and asset managers need to view their operations through the perspectives of their hotel owners and then follow through with action to ensure they are accomplishing everything the owners want to achieve.
Some marriage counselors might suggest that two keys to a successful relationship are the way we handle money and open lines of communication. Full disclosure. No skirting around a direct question. No ulterior motives.
The relationship between property or asset managers and hotel ownership must be comparable, a mutually beneficial balance of brass tacks (operations) and thinking on the same wavelength (strategy).
For property managers, the challenge in making this relationship thrive includes working with multiple ownership groups—from sole high net-worth investors to private or public equity groups. Each of these ownership groups is also likely to have its own reporting standards, preferred personnel policy, overall philosophy as to how a property should be run and expected return on investment.
The brass tacks component
Regardless, for many of us, this process starts with impeccable, forthright operations. This means timely and honest management procedures that don’t skirt around issues, and that includes accurate and transparent reporting regarding occupancy, average daily rate, gross and net revenues, expenses, maintenance, receivables and the personnel roster, as well as a hands-on approach that delivers weekly touch points.
Regardless of whether we hold some interest in a deal or are acting strictly as a third-party manager, we must also understand that it is the owner’s money that is at risk and embrace our fiduciary obligation to that owner. It is our responsibility to know where an asset stands day in and day out, not hoping to come up with some kind of “correction” at month’s end (or specified reporting interval) if accounts don’t balance out satisfactorily.
For many operators, an important factor in executing on this imperative is to emphasize this principle both in the C-suite and at the property level. In particular, property managers must be entrepreneurial, taught and encouraged to act as if those receipts and receivables are “their” money. If accounts are aging, if we have a large payroll coming up that we must cover, then do something about it. Similarly, don’t let a personnel issue, or equipment need, fester. Act like an owner and get it taken care of—pronto.
The strategy part
Adopting this posture will go a long ways in perfecting our “short game” of daily operations. Next, honest, regular communications, preferably in person, must be the foundation of the long game that cements the relationship with ownership.
There are several important areas in which property managers can enhance the ownership posture. These include keeping abreast of key staffing issues in today’s employment environment, everything from the most appropriate protocols and policies regarding background checks and drug testing to wage rates and competing with other industries for quality individuals. Property managers can also be of great assistance, taking an owner’s view to market intelligence. This can mean helping ownership better understand a given property’s competitive posture or identifying opportunities for acquisitions or new builds that fit a precise investment strategy.
Overall, it is also important to be able to handle constructive criticism from ownership and respond with solutions, but, also, have the confidence to put forward one’s own position with the real-world data that will prove a point. Be proactive. Make sure you keep ownership informed of new human resources systems and policies or technologies you are implementing as a property manager. Solicit feedback. What can we do better? What can we help you with? Also, ask if you are missing opportunities in working together. As the saying goes, “What has made me great won’t necessarily keep me great.”
Today, we find that ownership groups are asking more questions and checking out the details of our operations more closely than in years past. As property managers, we wouldn’t have it any other way. Acting like an owner will help us pass scrutiny with flying colors.
Kerry Ranson, a 21-year veteran of the hospitality industry, is chief development officer at HP Hotels.
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