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Guide To Hotel Management Companies for 2024
By HotelOperations.com
Wednesday, 19th June 2024
 

This guide will show you what hotel management companies are, what they do – and give you a list of the biggest hotel management companies today.

My team and I reviewed each company to give you the latest stats for 2024 and this guide was created from interviews I’ve done with leaders and experts in hotel management, including:

  • David Chu, Senior Vice President at GAM Hospitality
  • Mark Keiser, Chief Development Officer at EOS Hospitality
  • Scott Curran, Chief Operating Officer at Reneson Hotels
  • Susan Barry, Principal at HIVE

First, let’s start with the basics….

What is a hotel management company?

A hotel management company manages the operations of a hotel or group of hotels on behalf of the hotel owners.

This includes overseeing the hiring, training, and management of employees, implementing marketing and sales strategies, managing budgets and finances, and ensuring the overall quality and profitability of the hotel.

How are hotels managed: the hotel landscape today

Hotel management companies are perhaps best viewed in the context of the broader hotel ecosystem today. Here’s how Susan Barry, Principal at HIVE and a former Starwood Hotels executive, describes it:

  • Brands are the big signs that you see on the outside of a hotel. They are the IHGs, Best Westerns, Wyndhams, Hiltons, and Marriotts of the world. They license the use of their name and playbook for running a hotel to an ownership group.
  • “The ownership group is the investor that puts up the money and owns the real estate. They’re running a real estate business, but because hotels are cash-flowing entities, they’re also making money on the day-to-day operations. Brands have a very intricate playbook for how hotels should be operated and usually, if not always, require the owner/investor to hire a professional hotel management company to run that hotel on their behalf.
  • Hotel management companies are the operators. They hire the staff, run payroll, and ensure compliance with local, state, and national laws. They do everything required to operate the hotel according to the brand’s playbook because the owners are focused on real estate investing.”

“The way I see it, brands guide the hotels on standards and consistency,” says Scott Curran, COO at Reneson Hotels, which is both a hotel owner and management company. “It’s our responsibility to make sure we’re representing brands in the right way, make sure that we’re operationally running in the right way, and doing what we need to do to so that guest has so much fun at our property in Napa that when they book a vacation in New York, they’re thinking, ‘I want to stay at Hilton Garden Inn, too.’”

What do hotel management companies do?

Hotel management companies are responsible for overseeing the operations of a hotel on behalf of owners, in compliance with brand standards as outlined above.

Hotel management services typically include:

  • Hiring and training staff
  • Leading and managing these associates day-to-day
  • Driving demand through marketing, distribution, sales, and revenue management
  • Converting demand into profits through efficient operations and appropriate cost controls
  • Ensuring guest satisfaction
  • Managing the hotel’s finances

Ultimately, all of this is done to ensure the hotel business is as profitable as possible for the hotel owners.

“Third-party hotel management companies create convenience for hotel owners,” David Chu, SVP of GAM Hospitality says. “Investors don’t want to get bogged down by the operational nature of hotels. They will tell their managers, ‘We bought this hotel and want you to run it for us.’ They may not know anything about labor, operations, or hotel accounting. They just want the manager to come to them on a monthly basis and tell them what’s going on and where they need to improve and invest.”

Read the full article here

HotelOperations.com helps you empower your teams to delight guests and drive profits. We believe that hotel operations is where the biggest opportunity for value creation in hospitality exists today. Excellence in hotel operations means happier guests, more revenue, and more profits. Here, you’ll find research, case studies, and insights from some of the top hotel operators in the world that you can use with your teams.

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