Hiring an asset management firm is all about finding the manager with the experience and integrity that best match up with the type of asset being managed and the business goals and philosophies of ownership. That sounds pretty simple, but to get to the right management company hire, a number of questions need to be asked and answered relating to experience, managerial discipline and business integrity.
There is no substitute for experience.
What does “experience” really mean? To the savvy property owner, it means a manager who brings many years of experience with a number of property types and a consistent track record of profitably. As we can all attest, experience is the foundation of decision making because the best managers draw regularly from their experience. The best asset managers are able to leverage their experience to find the right onsite general manager who, in partnership with the asset manager’s senior leadership, will hire the property staff. The asset manager’s ability to get the onsite management and staff to function as a cohesive unit almost always translates into consistent bottom-line profitability. In addition to the management of day-to-day operations, the best asset managers understand how to manage major account relationships, capital improvement projects and vendor relationships and effectively communicate regularly with ownership.
Branded management can be even more challenging; correspondingly, the large brands will almost always insist that the property is managed by a group experienced with branded hotels. Even if your property is not a nationally branded property, hiring a manager with brand experience means that you are hiring a group that has operated in a disciplined environment where the maintenance of high standards is expected.
There are some fundamental questions concerning experience that ownership needs to pose to any prospective asset manager. Specifically, these include:
- How many years and what type of properties have been managed?
- How does the prospective property manager’s experience align with the targeted priorities of the property owner?
- Did the properties previously managed consistently hit their profitability goals?
- What is the extent of experience with branded properties?
- Is there any experience with managing capital improvement projects?
Always hire an asset manager who possesses integrity.
Integrity is the quality of being honest and trustworthy, and those who possess it and hold themselves to high standards are the type of asset managers you want to hire. In a business relationship, integrity starts with honest and consistent communication with both the ownership and the brand. There are times when honesty requires the disclosure of unpleasant or problematic news, and it is the right manager who has the integrity to not only deliver it but possesses the skills and experience to bring solutions to those problems to the discussion table. The right asset manager starts with the fundamental goal of building trust with ownership starting from the first day of the relationship and continuing through the entirety of the relationship with frequent collaboration between the asset manager, ownership, brand (if a brand is involved with the property being managed) and onsite management.
There are some fundamental questions concerning integrity that ownership needs to pose to any prospective asset manager. Specifically, these include:
- Is the prospective asset manager a good communicator?
- What does the prospective asset manager’s references say about honesty?
- Does the prospective asset manager have a talented group of senior managers supporting their business efforts, and do those individuals appear to share the CEO’s standards of integrity?
About the author: Michael Gildersleeve is the founder and CEO of Phoenix-based Patton Asset Management. Mr. Gildersleeve started his career with the Marriott Corporation. During his 35 years of hospitality industry experience, Mr. Gildersleeve has successfully tackled virtually every challenge imaginable in the hospitality business, including the oversight of a number of capital improvement and property repositioning projects.Mr. Gildersleeve can be reached at 602-524-4482.