ASSET MANAGEMENT REPORT
By Gregg Wallis
Senior Editor
A sensible strategy is key in the current environment
NATIONAL REPORT-With analysts predicting that hotels will be working on tighter margins, asset managers will need to work harder for every dollar earned.
“The current environment requires skilled asset managers, and will differ entiate the savvy asset managers from the reporters,” said Kim Gauthier, SVP of asset management at Hotel Asset Value Enhancement (hotelAVE), and current president of the Hospitality Asset Managers Association (RAMA). “Today’s asset manager must focus at a zero-based/micro-level to change processes and past practices to preserve GOP margin.”
In order for hotels to remain profitable , asset managers must work to drive value for the owner through accountability. “Our role as asset managers is to hold the managers themselves accountable and, unfortunately, when the brand is the manager as well, sometimes those lines can be blurred in terms of their responsibility to the brand and their responsibility to driving value for the owner,” she said. “Our job is to help make sure they are focused-and we are focused-on driving the value for the owners since they are the ones who really do own the business. It is holding them accountable.”
Gauthier has a list of best practices her firm uses to help properties maximize profitability. “Without divulging trade secrets, we share best practices from other places, [since we] have the opportunity to work with different owners, different markets, different brands, different size hotels, different locations,” she said. “The asset manager has a lens that is different and has the ability to take things that they view as best practices and help implement and apply them across various hotels for overall improvement.”
Work with brands to flex standards that don’t affect guest experience. This is especially important as labor remains a major issue for the hospitality industry. ”Any place where we can make minor adjustments to save on labor is good,” said Gauthier. “Maybe it is a service that is done overnight that doesn’t affect guest experience-not having the laundry being open 24 hours a day, but having the laundry only operating for two shifts a day. That would be something that is a clear example that doesn’t impact the guest and is very, very much behind the scenes.”
Compare staffing and operating costs of peak periods vs non-peak periods. “This is an example of where the skilled asset manager goes into very detailed analytics and really looks under the hood of things: stabilizing and holding the managers accountable for their productivity when times are busy, which is when there is better operating efficiency, and trying to have them implement and hold to those same productivity metrics when times are not as good,” she said. “It comes back to the labor concept of being able to save on costs across the board and having more consistency in the operation from a productivity standpoint. ”
Ensure there is an acceptable ROI of all marketing initiatives. “Marketing and sales dollars are intended to drive revenue so every dollar that is spent should have a conscious, targeted area in terms of what the benefits should be,” said Gauthier. “When I hear ROI, the go-to is always IO times. I have heard slightly less than that for some of the digital platforms and I have heard people quote more than that, but the point is, if you are going to spend money to drive revenue, it should have some sort of a benefit; otherwise, you are not spending the dollars in the right places.”
Link to the full article: Hotel Business
