By Joanne L. Harris Contributing Editor

First comes love, then comes marriage. But can the honeymoon really last? What can be done to ensure that owners and managers stick it out for the long run?

Michelle Russo, president of Hotel Asset Value Enhancement LLC, a third-party asset manager, and panel members will discuss the requirements for making the marriage work and the value of doing that during a panel session at the 26th annual NYU International Hospitality Industry Investment Conference in June.

One of the foremost requirements of an outstanding relationship, according to panel members, is communication, which includes listening as well as speaking skills.

"Develop open lines of communications at all levels-property, regional and corporate offices," said Barry Bloom, senior v.p., portfolio management at CNL Hospitality Corp., a company that manages 136 properties in the United States and Canada. “We meet systematically in person or by phone at least monthly to discuss sales and marketing, financial performance and capital planning. This ensures that we communicate issues that are or may be out there."

All parties need to communicate current or potential trouble spots as soon as they arise.

"It’s when you come to a meeting and get the unexpected that you have problems," said Craig Mason, senior v.p., asset management of Host Marriott Corp., a real-estate investment trust that manages 115 assets in the upscale and luxury tires, including Four Seasons, Hilton and Marriott brands.

In addition, both parties must buy in to the short- and long-term plan and have a clear understanding of the objectives and roles up front.

Hotel Capital Advisers is a real-estate investment advisor to Saudi investor Prince Alwaleed Bin Talal. The company has a 22 percent ownership in Four Seasons Hotels and Resorts and about 4.9 percent in Fairmont Hotels & Resorts.

"Without a buy-in, there’s a divergence between what the owner and management wants," said Todd Noonan, v.p. of Hotel Capital Advisers. "At the end of the day, someone will win, but you’ll spend your time arguing merits instead of implementing the plan."

"Evaluate customer surveys, meeting planner scores and associates satisfaction," Mason said. "If our associates are happy with how we’re running the hotel, they’ll be in a better demeanor to serve the guests better," he said.

The panel said that the makeup of an ideal relationship starts with the fact that owners can’t micromanage. If they tell their management to do something, they have to give them time to make the change. If they see that management is not making an effort to implement change, then they might need to step into the picture.

"For example, [management] may not see a problem with an expense because they think that they are performing in line with a sister hotel," Russo said. "But we have already macro-researched the expense area, and we know they could reduce it."

"If, after a time, the situation doesn’t change or the profit-and-loss statement takes a further downturn, they provide management with a competitive analysis and give them specifics of what they want to see done," Russo said.

Ownership must support the manager in his or her profit-making efforts, whether through capital investment or resources, and provide the tools needed to execute the plan.

"The owner needs to bring knowledge of business and credibility and be able to communicate that our ideas are valuable and should be considered," Bloom said. "We have to educate them in the financial aspects of the business, listen to what they have to say and make decisions promptly."

"The manger, in return, needs to bring a cooperative attitude and to embrace the concept that ownership can be an additive," Bloom said.

Management also has to accurately forecast revenue and expenses. They need to make not only brand-based decisions, but also those that will attain the return on investment to justify the owner’s investment.

"We identify market trends to the owners as well, so we can help set their expectations and they can measure their results against what’s actually going on in the market," Russo said. Mason explained an example of how they value the property management’s involvement in the decision-making process. "We just finished a major renovation in a New York hotel," he said. "We designed the plan and investment strategy, but we brought in designers and architects and the Marriott corporate senior executives to work with us. We wouldn’t spend a dime without their input, because we want them to own the investment as well."

"Nothing takes the place of a personal visit to the property," Bloom said. "Walk the property to understand it. Stay there to get the feel that the guests do."

Because neither owners not managers can plan from hindsight or unforeseen market plunges, the success of a relationship is based on focusing on the factors that will take the business forward.

"Don’t discuss what happened in the last 30 days, but what you can do in the next 18 months," Noonan said. "If business is bad, it’s bad. Ask yourself what you are doing to adjust to the economics. Don’t blame the operator for your own economic woes, and don’t focus on historical results."

Like a marriage, a successful business relationship isn’t based on what you do when the sun shines on your profit line, but on what you do when rain threatens to wash it away.