Successfully Outsourcing Hotel Operations While Maintaining Control of Your Property

By Edward Donaldson VP Marketing, Small Luxury Hotels of the World | October 28, 2008

Within the Small Luxury Hotels of the World brand, many hotels have been owned and operated by the same families for many years. Some of our European members have had family ownership through generations. Today, however, owner/operators find themselves in a very different environment to that which existed even just 15 years ago. The hotel business is demanding of an individual owner's time and resources. Historically, one owner/operator is so intimately involved with his hotel that he sees no reason to record any details on the business. An owner/operator would then pass on this proprietary knowledge to his children and they in turn would manage the business pre-armed and educated in the dynamics of the hotel.

Today traditional owner/operators are finding that their children do no want to spend long hours toiling in a hotel and prefer to pursue other professions, such as law, banking or medicine. Consequently, the owners of small luxury hotels are finding it increasingly difficult to plan their retirement. They cannot pass the hotel on to their children because they are not interested and finding buyers is increasingly difficult. Additionally, many independent owners wish to retire from the business but not divest themselves of the asset. Indeed buyers today are extremely sophisticated and informed and demand of vendors a high degree of statistical information on the historic performance of the hotel, and not just audited accounts.

The dilemma therefore is if you are intending to retire from a life managing hotels, how do you plan for it? How can an individual owner prepare all the statistics that will facilitate a sale? How can a hotel be marketed to potential buyers? What if the owner does want to sell at all, but his children do not want to manage? How can an owner retain possession and not have to run the business or rely on another individual to manage the operation on his behalf?

One solution would be for owners to engage the services of a specialist management company who can make available to a hotel the full range of skills to ensure financial success. Generally speaking most individual managers are expert in one field of the hotel business including the three key fields of service, marketing and accounting/finance.

As the independent owners seek alternate solutions, management companies are fulfilling the needs of these owners. One such firm, Luxury Hotel Partners Limited, a niche European hotel operator specializing in the small independently owned luxury hotel sector, manages the properties on the owners behalf allowing them to retain the property as an asset, free themselves of the daily operational burdens and insure the future value of the property.

Knowing that in most cases the owners look at their properties as they would their own children, management companies like Luxury Hotel Partners often remain very inclusive by providing the owners of the hotels a high degree of control over their asset through a regular reporting program. Such management firms must fully appreciate that for a successful owner/operator to relinquish the day-to-day operation of his hotel is a difficult decision. It is key for the ownership and management to work together to ensure a not only a seamless transition, but also secure the overall success and profitability of the hotel continuing the legacy that has been established.

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Coming up in June 2019...

Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.