Last week I mentioned the entrepreneurial opportunities I discovered on my trip to the Middle East. Hotel owners and developers, who in the past relied primarily on a brands management because of contractual limitations, are becoming very demanding.
This obviously is not unlike the North American situation where owners and developers have employed the services of management companies to add value to their investments. A management company provides an interface to the actual brand and manages the property from a different perspective than the brand owner.
Low and behold, the owners have begun to realize that if they want to have their investment managed in their own best interests, they should manage it themselves. Thus they are starting up their own management companies.
The owners feel that they are the only ones taking risks. Several owners that I personally spoke with both in North America and overseas told me that in their opinion the only value the management company provides is the General Manager, placed in the property by the management company. In addition they feel that the management company actually on occasion runs interference.
The problem is that Hotel owners and developers are not hoteliers and their preference more often than not, is not to be involved in the property management. The opportunity that exists is to create a relationship with the owner whereby the owner realizes that the management company actually works for him and not the management companys shareholders.
I have presented proposals to developers that clearly outline how our company shares in the downside as well as the upside. The response has been extremely positive because it is a win-win as well as lose-lose situation.
How you create that relationship or perception is up to you, just remember to write your proposals and contracts from the perspective of the person that foots the bill.
In Hospitality
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