Bruce Stemerman, Managing Director, Strategic Advisory and Asset Management
Asset managers have had a critical role during this industry downturn. In today’s conference panel “Asset Management: Checkmate or Stalemate,” I had the opportunity to speak about the state of affairs of our industry along with winning asset management strategies with my fellow panelists.
Over the years, professional hospitality asset managers have evolved from a small number of individuals to a more institutionalized group of advisors. While many owners and investors possess a solid base knowledge, what asset managers really bring to the table is relationship management. As asset managers, the mantra for our profession is to create liaisons and collaboration as opposed to threats. When we first begin an assignment, our first priority is to win the management team over—and build something that I like to call a “relationship of love and affection” with the hotel’s executive management team.
The panelists discussed the aggressive cost containment initiatives that operators and owners alike have implemented to avoid deeper net operating losses. So many of these changes have been positive and represent winning asset management strategies. Operators trimmed cost structures by reducing labor costs, closing or reducing operating hours of food and beverage outlets, renegotiating service and vendor contracts, and clustering sales and reservations offices. Many of these initiatives are here to stay, and a number of cost cutting initiatives will result in long-term savings for hotels.
What I think we must focus on as owners, operators and asset managers is achieving the highest flow through on rooms revenues, which is the income stream that has the highest profit margins. Looking for other sources of significant amounts of revenues and associated profits would be a big waste of time.
In our collaboration with owners and operators, it is our goal to provide the best service at the lowest cost to maximize profit on rooms revenues.
- Bruce
