What is a Hotel Management Company?
Managing every aspect of a hotel can be time-consuming and stressful. That’s where hotel management companies come in.
A hotel management company is a business entity that provides hotel management services to hotel owners and investors. These services may include hotel operations, marketing, accounting, and human resources. Hotel management companies typically have a team of experts who can help hotel owners make their properties more successful by providing operational, commercial, and marketing support.
If you’re looking for a hotel management company, it can be tough to know where to start. With so many companies, how do you choose the right one for your business? In this article, we’ll discuss some key things to consider when choosing a hotel management company. We’ll also give you tips on evaluating different companies and finding the one that’s right for you.
Why Work with a Hotel Management Company?
There are many reasons why hotel owners may choose to work with a hotel management company. Some of the benefits include:
Marketing and Branding Support
A hotel management company can help hotel owners build and promote their brands. They often have knowledge and experience in marketing and branding and can help hotels reach their target markets.
Streamlined Operational Workflows
Hotel management companies have expert staff who can help hotel owners optimize their operational workflows. This can help hotels run more efficiently and effectively to reduce expenses and provide a quality guest experience.
Optimized Staff Training and Development
Hotel management companies can provide hotel owners with training and development programs for their staff. This can help hotels maintain high levels of service quality and customer satisfaction.
How to Choose a Hotel Management Company
When choosing a hotel management company, it’s important to understand your budget and define your goals. You should also research the company’s reputation and set expectations accordingly.
Understand Your Budget
Many factors go into determining how much money is allocated to your property. The budget should be developed per your hotel’s specific needs, which may take time to determine. The budget should also be based on the number of rooms, revenue, and refurbishment requirements.
Budgeting is a vital part of any business and is no exception for hotels. A hotel budget is vital for planning and financial activity forecasting. Creating a budget is not easy, but there are some steps you can take to make it easier to do. To start, prioritize the items that are essential to the success of your hotel and how they affect the quality of service you provide to your guests. Budgeting this way will enable you to adjust as necessary.
When selecting a hotel management company, it is important to know the fees associated with their services. Third-party management companies typically charge a percentage of the hotel’s total revenue. This fee can vary depending on the company and the services they offer. The average is between 3-4% of total revenue. It’s crucial to understand how much you can reasonably pay for hotel management services and to find a company that offers a fee that aligns with your measures of success.
Define Your Goals
Before you begin your search for a hotel management company, it’s important to know what your goals are for your hotel. What are you looking to achieve? Do you need help with marketing? Operational workflows and staffing efficiencies? Staff recruiting, training, and development? Renovation management? Once you know what you need, you can narrow your search and find a hotel management company that can help you achieve your goals.
Some hotel owners may choose to work with a hotel management company to outsource some of their responsibilities. Hotel management companies can help owners manage their businesses more effectively and efficiently. This can include services such as marketing and branding support, streamlined operational workflows, optimized staff training and development, and more. By working with a hotel management company, hotel owners can focus on their core business goals and tasks while still providing high-quality hotel services to their guests.
Explore Company Capabilities
When choosing a hospitality company, you should know how the company operates. It’s important to know the company’s growth and performance history.
As you begin your search, note what level of services you’ll need. Not every management company is going to provide the support your hotels need to continue growing. A larger management company may have a full roster of hotels already that prevents them from offering high-level support. A growing company may not have the resources to provide the support your business needs. It’s beneficial to keep these limitations in mind as you browse management companies.
Hotel management companies also offer a range of services. Some specialize in a particular type of hotel. For example, as a luxury resort and spa, you won’t want a management company specializing in a startup boutique hotel or a select-service property. And as a startup, you won’t need a company that caters to 5-stars.
Others offer a full range of services, from operating a hotel to consulting for other property types. Make sure the company offers services that match your needs and budget. In addition to operating your hotel, a hotel management company can provide consulting services, improve financial performance, offer staff training and development, and more. If you need these services, look for a full-service hotel industry expert.
Look Into Company Reputation
Whether setting up a new hotel or trying to manage an existing property, it is important to look into the company’s reputation. There are many ways to discover a company’s reputation in the hospitality industry, including:
- Visiting the management company’s website
- Reviewing the company’s current portfolio of hotels
- Perusing TripAdvisor reviews on that property
- Contacting hotels within their portfolio to get a better understanding of what it’s like to work with them
If you’re looking for a management company to run your hotel, consider the company’s track record with consumers. You don’t want to work with a company with a poor online reputation. For example, upset customers may leave negative reviews and seek another company for services. In this situation, you’ll want to pay attention to how the management company responds to these reviews. Check into their online presence and ensure they can address issues quickly and effectively.
Setting expectations is often overlooked when choosing a hotel management company partner. The company you choose should be able to provide references and case studies that you can share with stakeholders and your management team to help you make a decision. Your chosen company acts on your behalf, so you rely on them to take care of your properties and team members while maximizing your revenue. Because of this, it’s critical to maintain alignment.
Setting the right expectations is crucial to creating a happy guest experience. The wrong expectations will result in negative reviews, lower customer loyalty, and lower revenue. Hotel management companies that understand guests’ expectations will deliver on those expectations. Setting expectations will help you distinguish your hotel from competitors and create a consistent message across your marketing channels.
Check in regularly on their progress. This will help ensure that your hotel is running smoothly and meeting your expectations. In addition, it will help maintain good communication between you and the hotel management company.
Check monthly or quarterly reports, as these outline how the hotel performs financially, operationally, and guest-wise. Reports should also include any recommendations or changes the hotel management company recommends. Reports can be used to measure success and track goals over time.
Visit the property yourself and talk with staff members about their experience working with the company. You can also attend training sessions offered by the hotel management company or sit in on meetings between them and your team. Regular communication helps build trust between you and the hotel management company, which leads to better results for your hotel property.
Manage Your Hotel Revenue with Prosper Hotels
Even hoteliers operating a small independent hotel can benefit from a hospitality revenue management solution. You don’t have to be part of major hotel brands like Marriott, Hilton Garden Inn, or Hyatt to benefit from revenue management. You don’t have to be in major metro markets like Atlanta or New York to reap the benefits.
Contact us today to learn more about how Prosper Hotels can help improve your revenue and increase profit, regardless of your size, brand, or market.