HO­TEL AS­SET MAN­AGE­MENT

What you need to know about

Hospitality 9ja - - Table Of Contents -

Now, in Africa, ho­tel as­set man­age­ment is at­tract­ing in­creas­ing in­ter­est from de­vel­op­ers and own­ers and is set to grow in im­por­tance as the num­ber of hotels con­tin­ues to grow rapidly across the con­ti­nent.

What is ho­tel as­set man­age­ment?

To nd a deni­tion that cov­ers all as­pects of ho­tel as­set man­age­ment is not easy. One ex­am­ple is the deni­tion used in the book Ac­count­ing and Fi­nan­cial Man­age­ment, De­vel­op­ments in the In­ter­na­tional Hos­pi­tal­ity In­dus­try, by Har­ris & Mongiello: 'The com­mit­ment of re­sources for the pur­poses of en­hanc­ing value and max­i­miz­ing owner's re­turns'. This deni­tion and in­deed ho­tel as­set man­age­ment, gen­er­ally, pre­sup­poses that own­er­ship and op­er­a­tions are vested in dif­fer­ent par­ties. Another good ex­am­ple of a de  ni­tion of ho­tel as­set man­age­ment is given by se­nior lec­tur­ers Humphries and Judge, who de­vel­oped the brand new mod­ule Ho­tel As­set Man­age­ment (HAM) at the Ecole Hôtelière de Lausanne (EHL) in Switzer­land. They look at it as a closely in­ter­twined set of deni­tions:

This deni­tion looks at all as­pects of ho­tel as­set man­age­ment, not just at try­ing to in­crease the num­bers on the bot­tom line of an op­er­at­ing state­ment. The as­set man­ager aligns ob­jec­tives be­tween ho­tel owner and ho­tel op­er­a­tor, man­ages the re­la­tion­ship, and sets goals, mon­i­tors them, and re­ports.

Why does a ho­tel owner need a ho­tel as­set man­ager?

You could also ask, why worry as a ho­tel owner about de­tails and specications if you like to look at the big pic­ture? Per­haps the big ques­tion of any ho­tel owner would be why they would out source this re­spon­si­bil­ity to a sup­pos­edly bet­ter pre­pared pro­fes­sional. The an­swer is that an as­set man­ager can free up a ho­tel owner's time by tak­ing on those specic tasks, such as:

· Man­ag­ing a re­fur­bish­ment

· Rene­go­ti­at­ing a con­tract

· Mon­i­tor­ing monthly op­er­at­ing sta­tis­tics

· En­sur­ing that the ho­tel is re­act­ing to changes in the mar­ket

· Main­tain­ing a sus­tain­able and ex­cel­lent re­la­tion­ship with the op­er­a­tor

· Op­ti­mis­ing the use of avail­able space

· Cre­at­ing rev­enue-gen­er­at­ing ini­tia­tives that do not in­volve ex­ten­sive ad­di­tional cost – ow through to GOP

This de­tailed re­search and mon­i­tor­ing re­quires cer­tain skills an owner may not pos­sess, but which they can ac­quire through an as­set man­ager. This way, an owner can fo­cus on the big pic­ture and at the same time make in­formed de­ci­sions to drive rev­enue. To give you an ex­am­ple, we worked as the as­set man­ager on the owner's side for a 1,000- room four- star cen­tral Lon­don ho­tel un­der­go­ing com­plete ren­o­va­tion. One of the tasks was to dene and mon­i­tor the bud­get for small op­er­at­ing equip­ment, which for a ho­tel with 1,000 rooms, sev­eral restau­rants, and a large meet­ing space was signicant. The own­ers, a large bank, had no ex­pe­ri­ence ( and re­ally shouldn't have to ei­ther)in fur­nish­ing a ho­tel with thou­sands of cups, tea­spoons, and other bits of small op­er­at­ing equip­ment. By keep­ing both owner and, most im­por­tantly, the op­er­a­tor up­dated on spend­ing progress, we main­tained the bud­get and saved the own­ers' time. The own­ers, through the in­volve­ment of the as­set man­ager, main­tained an ex­cel­lent re­la­tion­ship with the man­age­ment of the ho­tel.

An as­set man­ager can be

on a monthly ba­sis –this is the most used form of con­tract due to the monthly re­port­ing re­quire­ment of hotels. In ad­di­tion, they are also used on an ad hoc ba­sis, for ex­am­ple, dur­ing a re­fur­bish­ment, whilst build­ing an ex­ten­sion, or in a ho­tel's de­vel­op­ment phase. If an owner needs monthly mon­i­tor­ing of a ho­tel, an as­set man­ager should ide­ally be ap­pointed for a min­i­mum of 12 months, as sug­gested im­prove­ments may take time to come into ef­fect. For ex­am­ple, if an as­set man­ager sees an op­por­tu­nity to in­crease rev­enue by sourc­ing out­side mem­ber­ship for the ho­tel's health spa, it will take at least six months for the new sales strat­egy to fully reect in terms of mem­ber­ship num­bers.

Source: Ecole Hote­liere Lausanne, Humphries & Judge, 2015

The as­set man­ager could be re­mu­ner­ated with a xed fee per month, or with a xed fee sup­ple­mented by a vari­able el­e­ment de­pend­ing on the suc­cess of the as­set man­ager's in­volve­ment.

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