Do you have the experience and expertise required
Overseeing the intricacies of day-to-day operations while planning for the long-term can prove to be a daunting task for hospitality asset owners and investors. Those complexities, compounded with a rapidly-evolving market environment, make an owner’s decisions harder than ever. Do you have the expertise and experience it takes to get the most out of your investment? Do you know the right questions to ask your management team? Do you have confidence your staff is fully aligned with your strategy and executing it as efficiently as possible?
An increasing number of owners and investors have found that engaging The Plasencia Group in Owner Representation services has been the key to improving performance while striking a better balance between their objectives and those of day-to-day operators. It starts with the critical questions asset owners and investors should ask about their investments. The below list is a good starting point for questions you can ask as you begin to assess the viability of your hotel management and operations efforts. How does your asset measure up?
How does your hospitality asset measure up?
What steps have you put in place to ensure that your hotel management team is always performing with your best interest in mind?
We believe it is critical to clearly communicate ownership’s short- and long-term plans for the asset through an established investment thesis that everyone, including ownership, management and our Owner Representatives, is working to execute.
What assurances have been put in place, typically through the management agreement with the operator (HMAs), to allow you to influence performance?
Given our experience in negotiating dozens of management agreements, with both brand and third-party managers, our Owner Representation veterans will ensure that your rights as owner take priority over the operating desires of a manager working at your behest.
Is your manager taking proactive steps to maximize your hotel’s revenue potential?
Our Owner Representation team, as a key focus of our efforts would:
- Confirm that your property’s competitive hotel set is properly aligned to include truly comparable hotels.
- Review your customer acquisition costs to ensure that they are aligned with your Sales Department’s strategy.
- Work with your operations team to establish a clear rate and occupancy strategy to drive maximum revenues.
- Identify untapped revenue opportunities using the hotel’s ancillary amenities and spaces.
- Work with your management team to target and drive corporate and group accounts from your competitor to your hotel.
- Establish a clear process to ensure booking decisions are made based on total guest spend and profitability and not solely on revenue.
Does your manager have a defined plan in place to maximize your hotel’s bottom-line profits?
As part of our ongoing Owner Representation activities, our team would:
- Work with the hotel’s staff to analyze existing and potential business to ensure that every booking decision is aimed at driving the highest possible profit margins without negatively impacting the quality of service.
- Track labor management and productivity and take action to correct operating inefficiencies.
- Examine the benefits and the costs of outsourcing labor in areas such as Housekeeping, Laundry and other operating departments.
- Ensure that a process is in place to competitively bid service and vendor contracts.
- Work with the food and beverage team to frequently review menu item costs and offering prices.
- Establish processes to determine how managers are dynamically adjusting expense loads as your hotel experiences changes in business volumes.
- Complete an energy audit to determine potential savings in areas such as guest rooms, kitchens, central plant and laundry.
Does your manager have established plans in place to maximize cashflow?
Our staff works with the property’s operations team to:
- Make sure that they are producing a monthly statement of cash and a cash forecast for future months.
- Ensure that management is taking a proactive approach to collecting on Accounts Receivable in a timely manner while also minimizing write-offs.
- Verify that the hotel’s financial staff is properly managing Accounts Payable in a fashion that maximizes cashflow for ownership.
- Validate that inventory levels are being managed in a manner that fully maximizes cashflow.
- Engage the services of an experienced third-party consultant to appeal your hotel’s real estate taxes.
What specific steps is your manager taking to actively protect your asset?
As a key component of our Owner Representation services, enhancing or extending the life and value of the asset are a key focus. We would:
- Bolster any existing preventative maintenance plans.
- Ensure that your manager has an effective risk management and disaster recovery plan in place to deal with emergencies such as ruptured pipes, guest emergencies, and major catastrophes like tornadoes and hurricanes.
- Coordinate the administration of warranties on key property operating components such as mechanical systems, elevators, pumps, kitchen and laundry equipment, etc.
- Establish a written plan that aligns decisions being made by management to your investment goals, be they for short-term or for a longer ownership horizon.
- Continually update a capital expenditure plan that focuses on asset preservation and profit enhancement.
Our Owner Representation Team
Meet our seasoned hotel owner representation and asset management experts. With over thirty years of experience, this respected team of hospitality industry veterans provides trusted oversight services to hotel and resort owners and investors.
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