Resort Hotel Asset Management

OBJECTIVE

Our objective is to maximize the hotel’s value through improved financial performance combined with the maintenance and improvement of the quality of the building. We bridge the gap between the ownership and the management, assisting the owner, financier, or any other interested entity of the hotel asset.

Our goal is to enhance value through a combination of improved cash flow, property market positioning, effective capital expenditure, and the monitoring of management performance. The processes involve the creation of a plan, then the ongoing monitoring of management performance, to create a well-structured hotel real estate investment for stakeholders’ benefit.

STAGE ONE: THE PLAN

First, ownership objectives are fully understood in relation to capital investment and the investment horizon. A plan that meets these unique goals is created through detailed information gathering.

Results
 A plan that gives a clear picture:
  • The situation of the asset
  • Its competitive positioning and the strengths, weaknesses, opportunities and threats of the asset
  • Details the plans and actions needed to improve the value of the asset
  • Taking into account the exit strategy of the owner of the asset
Achieved by:
  • An evaluation of the hotel investment, its financing status and structure
  • The estimate of the hotel value through effective forecasting taking into consideration any new supply
  • Reviewing the operating financial data
  • Reviewing the business plan, and revenue and marketing strategies
  • Study of the competitive set
  • Reviewing all areas of operations
  • Within any franchise agreements a cost/value relationship review
  • Clarifying the effectiveness of the management and if applicable the management agreement
  • Reviewing the quality of the property and the capital expenditure history and plans and future strategies
Summary

Numerous challenges and opportunities need to be assessed to ascertain priorities to improve value, perhaps it is the re-use of space, re-positioning through investment, or producing a clear capital expenditure plan with a defined ROI analysis. One area is critical, that is monitoring the performance of management and all areas of operations and revenue management on an ongoing basis. Be it management by a third party management company, or by independent management hired by and reporting to the owners, stakeholders and board members.

STAGE TWO: ONGOING MONITORING OF INVESTMENT IN THE ASSET AND THE MANAGEMENT PERFORMANCE

On an ongoing basis we communicate with the management, providing the gap management solution between ownership and operator.

Operation effectiveness and financial performance, benchmarking the property
  • Review and revamping if required of operating standards, concepts and market positioning
  • Overseeing the annual budget for owners approval
  • Review of monthly actual financial performance versus budget and previous year
  • Comparing performance to competitive set
  • Monitoring revenue management and distribution strategies
  • Ensuring efficient cost controls
  • Examine the ongoing effectiveness of the marketing and sales processes
  • Check the guest’s survey satisfaction feed back
  • Effective use of working capital and capital investment requirements
  • Keep an eye on additions to competitive set
  • Check any upgrading of competitive set
  • Watch revenue management strategies at competitor properties
  • Management contact negotiation
Capital expenditure decisions
  • Assessment of the property’s exact capital requirements
  • Building survival, financial and physical reality check
  • Long term plan balanced with shorter term 5-year capex plan of management
  • Building life cycle major equipment and structure plan
  • Optimize and best care practices for the asset
  • Renovation and upgrades
  • Refurbishment and annual maintenance plan
  • Perform asset risk analysis tailored to current market conditions
  • Evaluate various refinancing opportunities to reduce debt costs or free up capital for other investment opportunities
Management compliance
  • Administer and renegotiate management contracts
  • Monitor expectations and conflicts between owner and operator
  • Advise owner on factors influencing operator bargaining power
  • Evaluate management effectiveness and cost/value analysis
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