News for the Hospitality Executive
The Evolution of Asset Management into a
Joseph S. Bello, CHA, July 2010
Back in the early 90’s, I had the pleasure of managing a wonderful hotel in the Walt Disney World area of Orlando. The hotel was located just outside the Main Gate of the park, and enjoyed a thriving business from domestic and international tourists.
When I accepted the assignment as General Manager of this fine hotel, I was informed that the ownership was a REIT. At the time, frankly, I was not familiar with a REIT, nor had I ever been involved in the management of a hotel that was owned by a REIT. My Regional Director brought me up to speed on “how things would work”, and handed me the card of a gentleman who would be my “Asset Manager”. More explanation followed, as I had reported to regional managers, district managers and other management company leadership folks, but I never had an Asset Manager to deal with.
Soon, my Asset Manager paid me a visit. He was a likeable person, quiet and studious. His background was accounting, and he had never actually managed a hotel himself, but had certainly taken a few vacations with the family.
For two solid days, we pored over the P&L. Line, by line, by line. As I answered all questions to the best of my ability, my Asset Manager took copious notes. To wrap up the visit, on day 2, we took a quick spin around the hotel, looked at the pool, a room, the tropical lobby and the health club. We shook hands, and, off he went back to his REIT headquarters.
Five days after the visit, my immediate supervisor received a lengthy letter from my Asset Manager, describing everything I was not doing correctly, and how the hotel, financially, could certainly perform better.
For each quarter for the next 3 years, the Asset Manager visits pretty much followed that pattern.
WOW! How things have changed!
After being an Asset Manager now for seven years, and having been involved in every type of hotel from small limited service properties to large resorts, it is amazing to me how this critical position has evolved. As my career prior to Asset Management involved General Management, Regional Operations and Regional Sales responsibilities, I feel as though I have a unique perspective on the importance of the relationship between the ownership and management of the hotel asset.
Here are a few points that I would like to share, knowing that our industry, and the role of Asset Manager, has evolved into a true value-add to the hotel investment. Before getting started with sharing a few ideas, let me say that the first thing Asset Managers need to know is this simple mindset: First and foremost, the Asset Manager is not the “Manager Police”
This may seem like a fundamental point. However, there is sometimes an air of “us vs. them” when it comes to ownership relationships and opinions of the management company representatives or the leadership teams at the hotel. This attitude fosters distrust, negates any possibility of harmony and mutually beneficial business synergies, and flat out takes the fun out of our business.
The management agreement notwithstanding, there are a variety of ways to foster and forge a partnership whereby the combined energy and resources of both parties work together to ensure that the hotel performs to its absolute peak. Some of those strategies are in the next bullet points.
Joseph S. Bello, CHA