How Temporary Hotel Management Provides Solutions during Turnover/Vacancy
In part one and part two on this subject about interim hotel management, the circumstances, typical users, types of assignments and when it does and does not make sense were addressed. In this part, the importance of planning from a shorter term perspective is looked at and why it is a critical aspect at the beginning of the takeover by a temporary manager or management team. Interim Hotel ManagerTraditionally, the hotel management plan will cover a minimum span of twelve months with financial projections for the next one to ten years. A comprehensive capital budget, especially if there is a franchisor mandated PIP (product improvement plan), would also be incorporated with its own set of estimates and projections. This long term plan will also include a detailed sales and marketing portion in conjunction with the operational aspects. A hotel motel consultant working on behalf of partners will often expect an exit strategy factored in for payback of the investors along with a possible disposition and sale of the hotel at a future date. In many a interim hotel management situation, the considerations as to income, capital expenditures and sales and marketing are reduced to focusing on a much shorter window of time, sometimes eight to ten weeks or twelve months at best. If there is to be a sale of the hotel, this is often predicated on achieving some minimum income level so as to attract the best price. Or, it could be based on a drop-dead date where the market would bring the highest comparable value, say within the summer months but no later. There is also the issue of cash flows if it is a distressed hotel. Vendor payables, employee payroll taxes and other expenses may need to be brought current before the hotel can get the highest return after debt service. Based on these variables and timelines, a typical 90 day plan would include: Focus on Maximizing the Revenues month to month. Daily Bottom Up approach to Staffing and Expense Controls. Immediate steps to Collect and Restrict Cash. It is important that an interim hotel management 90 day plan define what will be accomplished within these 3 areas. Peak day occupancies, staffing guides and accounts receivable collections all play a critical role. Look for more detail in the next installment on this subject…
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