Knowing when to hire a hotel management company is critical to the success of your hotel. Here are our top tips to consider.
Whether you own a hotel already, are in the process of acquiring one, or have plans to build one in the near future, you’re going to want the best possible resources to maximize your investment. There are numerous methods and strategies to do so, but there is one question that you must ask – when is the right time to hire a hotel management company?
When You Know It’s Time to Hire a Hotel Management Company
- Gross revenue and net operating income (NOI) have been dropping even in an upward market.
- Hotel expenses continue to creep up faster than industry averages.
- The management fee you charge your partnership is only slightly less than what you would pay for a professional hotel management company.
- Your partners are purely investors and you are the only one with hotel management experience, or no one has hotel management experience including yourself.
- You and your partners are not seeing eye to eye on how the properties are currently being operated.
- You have significant employee turnover and do not have time to spend hiring the right people and training them properly.
- From laws and city codes to employees and franchise requirements, your team can’t keep up with the constant changes at your hotels.
- You don’t have time to review property conditions, but your hotels are looking neglected and need some TLC as well as upgrades and renovations.
- You often find yourself literally working on property due to staff shortfalls.
- Work consumes you, leaving no extra time for a personal life.
- You are approaching retirement, but still want to retain your hotel assets.
- Hotel management is a part-time gig for you while you are holding down a full-time job. Assets worth tens of millions of dollars should be given undivided attention.
- Loyal customers that have stayed at your hotel for years are not returning – and you don’t know why.
If you are experiencing any of the above unsatisfactory situations, then it’s definitely time to start looking for a hotel management company.
But, where to begin? There are many companies to choose from and it’s imperative that you find a good fit for both your investment team and the hotel. Here are our top tips every hotel owner should consider when shopping for a hotel management company. We will address this topic in much greater detail in our upcoming blog next month.
What Types of Hotels Does the Company Currently Manage?
Not every management company manages all hotel types. We recommend looking for a hotel management company that specializes in operating hotels like your own.
Do They Have Industry References?
One of the best ways to judge the capabilities and successes of a hotel management company is to ask around. Not only can you request formal references, but you can also put the word out within the hospitality industry and see what other hotel owners have to say.
Are They Able to Provide the Exact Services and Reports You Need?
Different management companies provide different services, but many of the basic services are more or less the same.
Where is the Management Company Located in Reference to Your Property?
It’s essential that the management company is close enough to get to the property whenever necessary. Do they have regional offices?
Which Company is the Best Fit for Your Hotel Ownership Group?
You are going to be entrusting your hotel assets to these people and working closely with them on a daily basis. Make sure you choose a company that has experience operating your type of hotel and provides a realistic, strategic plan for achieving your financial goals.
At HMG Hospitality, we operate hotels as if we own them and your hotel’s success is our success. Contact us today to learn how our hotel management company can maximize your market share by driving more revenue to the top line and more profit to the NOI line.