Mr. Bottois

Condo Hotels

Tips for Hotel Operators and HO Associations to Communicate with Owners in Private Residence Clubs

By Olivier Bottois, Managing Director & COO, The Whiteface Lodge Resort & Spa

Just as hotels operate more smoothly with focused guest communication, a private residence club must also provide consistent, informative communication to its homeowners. Homeowners have a stake in the success of the property from both a resort and a real estate perspective; anticipating and addressing their concerns is crucial to productive hotel-homeowner relationships.

From a real estate perspective, homeowners are entitled to receive information from the hotel on a regular basis, and they should hear about achievements, from accolades to new amenities, to generate a sense of pride in owning at a successful property. Homeowners should also be treated as hotel guests with additional benefits, such as a private Owners' Lounge or advanced notice about promotions. In monthly newsletters, encourage homeowners to reserve early for high occupancy periods and ensure they have updated information about services and promotions.

Hoteliers should generally expect to convey information regarding the hotel's operation and brand standards, and try to be innovative and personal when doing so. For instance, in addition to the monthly newsletter, consider hosting a reception while homeowners are in residence. Most private residence clubs have different structures, and the hotelier's role varies depending on how the entities are set up. While it is not generally his or her responsibility to provide ownership information (i.e. calculation of annual fees or offering plan questions), hotel operators should be well versed in homeowners' topics or issues in order to facilitate relationships between the entities. They should assess which topics should be delegated to the HOA Board versus topics that are related purely to hotel management and operations. Streamlining communication through multiple avenues reduces the amount of time a hotel operator spends tending to homeowner issues and puts homeowners at ease, as they receive relevant information on a more frequent basis.

In this era of ownership, hoteliers need to become aware of this new facet of the luxury hotel business and integrate homeowner communication into their daily business dealings. Building a positive foundation with homeowners will prove beneficial to all parties.

The relationship between management and residence owners at fractional private residence clubs is a complex one-it requires special attention to issues that are new to most hoteliers. With this in mind, here are the important things to consider when communicating with residence owners:

1). Communicate Consistently & Frequently

Owners have a stake in the success of the property from both a resort and a real estate perspective. Keeping them informed of resort news is critical. Utilize the HOA Board of Directors for this, as the Board typically receives inquiries from owners on a regular basis and can assist in distributing the message. Additional formal communication directly from the resort should occur on at least a monthly basis, and critical issues must be conveyed in a timely manner.

2). Outline the Structure and Role of Different PRC Entities

In most private residence clubs, a number of entities are involved in the property's operation: the Sponsor, Hotel Management Company, Spa Operator and/or Golf Management, the Homeowners' Association, etc. It can create confusion among both management and owners if owners do not understand the roles and responsibilities of the entities. Establish a clear distinction between what qualifies as an HOA matter versus a hotel matter, and give owners appropriate contact information and instruction for dealing with different issues. Also convey the limitations of information about these entities. Owners purchase the suite and its contents but not the hotel. It is unlikely that the spa or restaurant's financial performance would be shared, as they are separate from the HOA and this would only complicate communication. Owners should know what is happening with the amenities but not necessarily the finances of those amenities.

3). Explain How Annual Fees are Calculated

While this process takes place prior to purchase, ensure owners are informed about annual fees and explain how they are calculated. Owners speak to one another, and it's helpful for them to understand that variations in square footage or amenities, for instance, mean that fees are calculated differently for different residences. Additionally, while 90% of owners may never voice concern, the 10% who are challenged to pay monthly fees or are interested in the minutiae, want communication specific to budgets and the actual cost of operations. Once an HOA Board has approved the budget, they should communicate the budget in a detailed letter mailed to each owner.

4). Handle Owner Correspondence as Professionally as Guest Correspondence

Professionalism and privacy in correspondence are just as critical with residence owners as they are with guests, and treating them as such will help maintain consistency in the resort's image. Hire a database management firm to handle owners' contact information and keep it up-to-date, and employ a writer to add polish and a professional message.

5). Send a Monthly Owners Newsletter

Not only do newsletters keep owners informed, they have the advantage of reaching all owners with the same message at the same time, so that some do not receive information ahead of others and potentially miscommunicate the message. Know your audience, and choose e-news or a mailed newsletter based on the owners' ability to receive email communication, as well as the cost of delivery and their willingness to pay for it. E-news is cost-effective and can be posted online for future reference, but mail is still the only way to reach some owners. Consider asking the HOA and the resort to write two different columns so that owners receive information about the full spectrum of issues.

6). Educate Owners about Brand Standards and Their Value

Purchasing in a private residence club is buying into the benefits and prestige of a five-star lifestyle. However, once the purchase has been made and owners acquire financial responsibility related to service or facilities, often questions begin to arise regarding the necessity or importance of certain initiatives. The General Manager must educate the HOA Board and homeowners on brand standards and convey the minimum negotiable standards, as they cannot be compromised. Reinforce that maintenance of these standards is inextricably linked to the value of the real estate investment, as well.

7). Explain the Offering Plan

Making a real estate purchase in a private residence club is no different from any other real estate purchase with the exception of the complex offering plan. Essentially, owners are purchasing a second home with a deed and all the associated paperwork; however, in this case, the paperwork is more extensive and the legal language requires interpretation for many. Owners will continue to have questions after they purchase, even if the great majority of them have taken time to understand the offering plan.

8). Communicate when Owners are In Residence

Take advantage of personal time with owners when they are in residence. One-on-one attention is valuable and conveys sincere interest from management. There are many ways to do this: hold informal weekly meetings, which owners in residence may attend to learn more about happenings on property; host owner receptions; walk the property with them one-on-one; or create a communications binder and daily activity sheet that owners may consult for up-to-date information when they are in residence.

9). Request the HOA Organize its Own Communications Committee

Owners should be communicating through the HOA as much as possible. Ask the HOA to organize a committee whose role it is to provide suggestions to improve communication and to introduce new avenues for communication. While the Sponsor will usually budget for owner communication in the early stages prior to transfer of control to the HOA, the Association will eventually absorb the cost of communication and will determine themselves what is a reasonable and most effective level of communication.

10). Offer Tools or Avenues for Owners to Communicate

Consider launching a password-protected extranet that allows owners to correspond with management as well as among themselves. Make it the responsibility of the HOA to maintain and monitor the extranet. Additionally, an annual meeting is required, per the bylaws, and this is another good opportunity for owners to meet one another and for management to communicate with owners as a group.

Olivier Bottois is the managing director and chief operating officer of The Whiteface Lodge Resort and Spa in Lake Placid, New York. The Whiteface Lodge is the first private residence club and fractional luxury resort in the Northeast region and the only Leading Hotel of the World in upstate New York. Bottois has 25 years of experience at exclusive hotels and resorts, such as The Connaught in London, Hotel Ritz in Paris, The French Presidential Palace in Paris, and The Peninsula New York plus 10 years in various management positions with Four Seasons Hotels and Resorts. Mr. Bottois can be contacted at 518-523-0520 or o.bottois@thewhitefacelodge.com Extended Bio...

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