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1 November 2017

Best Management Practices for Less Experienced or “Mom and Pop” Owners

By Robert A. Rauch, CHA - President of RAR Hospitality
  • Best Management Practices for Less Experienced or “Mom and Pop” Owners | By Robert A. RauchBest Management Practices for Less Experienced or “Mom and Pop” Owners | By Robert A. Rauch

If you are considering a management company because you feel you are not keeping up with the nuances of distribution channel management, human resource management, digital marketing, accounting and the changes in the industry that have driven us from art to science like revenue management, you are not alone.

There are best practices for every facet of the hotel industry and there are many ways to approach improvement of your hotel management short of hiring a company to manage your hotel. If you have decided that you need a management company due to inexperience or desire to retire or semi-retire, there are three things you should look for:

Common values and culture: When looking for a hotel management company, it's important to look for a company that is aligned with your own values and company culture. Having common beliefs about how your hotel should be operated and your guests taken care of will help you be on the same page as your management company.

Management style
should also be considered when looking at different management companies. Does the management company require onerous paperwork from managers, thus making it difficult to be the face of the hotel? Perhaps you prefer a company that encourages "management by walking around" rather than having managers sitting behind a desk all day. There are various styles and it is important to understand the style you are comfortable with that will ultimately provide the healthiest of both relationship and returns.

Innovative technology
utilized within the day-to-day operations should be a focus when searching for a management company today. The art of hospitality is now becoming the art and science of hospitality. Staying aware of and implementing technology that will help your property increase revenue, operating profits and net income is crucial. Technology should not be implemented for technology's sake but it should aid your hotel in staying ahead of the competition and meeting your guest's expectations while protecting the value of the asset at all times.

If, on the other hand, you feel you do not want or need a management company, one thing that a "mom and pop" owner can do is hire a management consultant firm for specific tasks. These might include accounting, marketing, human resources, training and more. Further, a consultant can advise you on when to sell and how to position your hotel for sale; they can review brands, soft-brands or approaches to managing as an independent and much more.

How do you know if you need support in today's more scientific environment?
There are three simple tests. The first is revenue—are you able to develop a business plan for 2018 that shifts market share from OTAs to a direct channel and are you completely aware of all business that is in your market area and how to fight for it via digital marketing and sales? The second is operations—do you have comprehensive operating procedures for front desk, housekeeping, engineering, safety and security, food and beverage, sales and marketing (that includes your web site) and analytics that tell you what is going on in each area? The third is accounting—do you have P&Ls that reflect variances, are completed in a timely manner and are set up with the Uniform System of Accounting for hotels and are you able to put together a 2018 budget utilizing all available data?

There are answers to every question in hospitality and we are here to help! I will be at the Lodging Conference in Phoenix this week and the American Hotel & Lodging Conference in New York later this month. To a great November, tax reform and the holidays!

Robert A. Rauch, CHA

Robert Rauch, CHA, is a nationally recognized hotelier and President of R. A. Rauch & Associates, Inc., a leading hospitality management and consulting firm. Rauch has over 35 years of hospitality- related management experience in all facets of the industry. Widely recognized as the 'hotel guru', Mr. Rauch maintains a blog where he expounds upon insights and trends in the hospitality industry at www.hotelguru.com. Along with the blog, he also publishes Hospitality Innsights, an electronic newsletter that is distributed monthly. Mr. Rauch held nearly every position in the hotel business including General Manager of full-service Four Diamond hotels for Hilton and Embassy Suites. His education includes a bachelor’s degree in Hotel Administration from Western International University and a master’s degree in Tourism Administration from Arizona State University. He is a Certified Hotel Administrator and has served as chairman of numerous tourism organizations nationally and in the western U.S. He has been directly involved in developing several leading brand hotels, some of which the firm still owns and manages. R. A. Rauch & Associates, Inc. currently operates hotels in California, Arizona and Colorado with several under development.


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