A hotel, just like any business, ultimately must remain profitable to keep functioning. This requires its owners and managers to not only look at the day to day workings of the hotel, but also to see them in relation to a longer-term look at the larger financial picture. This is not as simple as cutting costs at every opportunity; rather, it necessitates a consistent focus on effective and efficient use of resources. This is where hotel asset management comes in.
Your hotel asset manager focuses on operations, human resources, and property concerns to ensure that the property achieves its maximum profitability. And in a boom market for hotels, the opportunity to achieve more for your property is tremendous.
Making Focused Purchases
Purchases for hotel properties can be difficult. You may want in the abstract to make the purchases that will achieve the most additional revenue at the lowest accompanying cost. An asset manager makes assessments on these issues every day, balancing cost concerns with opportunities to grow revenue. When the market is strong, costs may increase for the best people and the best appurtenances. Still, the cost should be balanced against the opportunity. The hotel asset manager will usually look at costs relative to the overall financial picture; a slightly higher cost for someone or something than can greatly increase revenue opportunities might be a better purchase than someone or something that costs less but has a weaker revenue impact.
Selling at the Right Time
Sometimes sales should come when the hotel is performing well. Hotel asset management means more than just selling non-performing assets; it means capitalizing on the opportunity to gain the best return on those assets. The asset manager needs to look at long-term trends and expectations. A property may look to be maximizing revenue, at which point selling high can yield new developmental opportunities and greater growth over time through new asset acquisition.
Hotel asset management looks at both present and future market expectations to make acquisition and sales decisions. Current revenue and costs matter, but a strong asset manager generally focuses on the bigger picture.
