Top practitioners of hotel asset management believe the discipline is poised for growth going forward as a clearer career path is defined and better tools emerge.
Editor’s note: This is the second entry in a series looking at various aspects of asset management in the hotel industry.
REPORT FROM THE U.S.—Improving the pool of available talent, recognition of top performers and improvements in data and technology are all expected to help propel the discipline of asset management forward, sources said.
Greg Kennealey, a board member for the Hospitality Asset Managers Association and portfolio manager at KSL Capital Partners, said there isn’t a clear trajectory for someone to become an asset manager in the hotel industry today.
“We’re trying to institutionalize what the role is and what the career path for it is,” Kennealey said. “Right now, if you ask 10 different asset managers how they got into the industry, they’ll have 10 different answers.”
Melissa Silvers, HAMA president and principal at SCS Advisors, said asset management has a growing presence on college campuses and hotel and hospitality programs around the country.
“More schools have asset-management classes,” she said. “There are more graduates coming out of college with a better understanding of asset management then say five or 10 years ago. A lot of people who are asset managers now never had an asset-management class. They learned on the job or worked in operations.”
Larry Kaminsky, EVP at Fulcrum Hospitality and HAMA board member, said exposing more people to asset management earlier will not only better prepare people to work in the field but will expose it to more as a potential career path. He said a lot of that work can be accomplished from an association perspective, as well.
“We are very dedicated to working with universities and trying to engage students in HAMA as early as possible to help them get an appreciation for what asset management is all about,” he said.
In addition to wanting to draw in and prepare more young people, sources said there are also efforts underway to better recognize the elite in the discipline. A lot of that work will come through HAMA’s certified hotel asset manager designation, which is designed to honor the cream of the crop.
Kaminsky noted this is important because asset managers are asked to understand various aspects of the industry, from hotel operations to the dynamics of being a real estate investor.
“I have to spend a lot of time with property teams and educate them on the investment and real estate side of the business so they’ll get a better appreciation for what an asset manager is looking for,” he said. “It’s a different perspective than the day-to-day operations.”
Issues for asset management
Sources said asset managers across the industry are still grappling with how the recent wave of brand consolidation—headlined by Marriott International’s purchase of Starwood Hotels & Resorts Worldwide—will ultimately affect the discipline going forward.
The Marriott-Starwood deal was trumpeted as a positive for Marriott because of how it boosted the company’s size and scope and therefore increased its negotiating power. That could work out to be a positive for hotel owners and operators when it comes to things like negotiating with suppliers or online travel agencies, but sources said it could make brand-owner negotiations more difficult.
“When they control 30 brands under the Marriott organization, that gives them a tremendous amount of power relative to an owner of one to a dozen of their assets,” Kennealey said. “So how do you maintain the appropriate balance? That’s going to get harder. I don’t know what the answer to that is.”
Silvers said the jury is still out on how the acquisition will play out overall.
“You have to wait out that transition period,” she said.
Kaminsky said with the transition currently taking place, it’s important for asset managers and those working at the property level to be as vocal as possible with Marriott about how changes affect them.
“There are all sorts of implications of combining that Marriott is working through, and owners have to do work themselves as a result,” he said. “It’s about understanding the initiatives that are rolling out and the transition activity and making sure you’re very vocal (when changes might have) negative implications to a property.”
Opportunities for growth
Sources said the growing availability of different kinds of data are changing the way asset managers are able to look at a property’s performance and identify areas of possible improvement.
Kennealey said he is excited by the specific data that is now available for things as varied as online reputation management to nonroom revenues like food and beverage and golf. He said the efforts to account for other streams of revenue have been pioneered by hotels in Las Vegas and are now filtering through the industry.
“You have hotels where the room revenue is less than half of the total, so it’s not the whole story,” he said.
Kennealey said there are huge opportunities both for the discipline and the industry for people to figure out better ways to collect and synthesize data that could be easily digested at a property level.
Silvers said moving into new geographies is another opportunity for asset management, which is why HAMA is putting significant focus on international growth. She noted many hoteliers and investors internationally are still being introduced to the concept and how it can help them.
“I think there’s a lot of growth internationally,” she said.