If you’re reading this, then it’s safe to say that you’ve done alright with hotel asset management through the years. As the hospitality industry ushers in a predictable era of decelerating revenue increases, you understand that increasing net operating income (NOI) is the only surefire way to fight a flat-lining RevPAR and enhance asset values. But even the best players can’t win it all by themselves. There’s NOI in team. The harsh reality is that there are hidden expenses within all property management operating costs that can be reduced if organizations could only put the right people on the sidelines.
SIB has recently released a whitepaper exploring some of the common hurdles and solutions to effective hotel asset management. Download today.
Well-run businesses are susceptible to a litany of unnecessary costs resulting from factors like over-service, local and regional expenses not covered by GPOs, and poor pricing relative to what’s available in the market. Unfortunately, even the best negotiators can fall short for the simple fact that they don’t have a data sample large or diverse enough to make informed decisions at the level necessary to achieve a bottom-dollar price for the services rendered.
Sure, there are many that know a great deal about the hotel business. At the end of the day, however, costs are still costs. Comparing these costs within your industry alone is a dangerous practice, as the entire industry could very well be paying unnecessary premiums for services that are provided to others at a fraction of the cost. Furthermore, organizations often view negotiated discounts and GPO pricing as one in the same. That can be a dangerous mistake. If you aren’t aware of where to look for these variances, then you’re setting yourself up for failure.
Without the help of an outside team of experts, internal administrative tasks are getting left unattended inadvertently and unbeknownst to ownership. Paying for things like recycling when the city picks it up for free, or over-service—why pay for 20 phone lines when you only need five?—represent costs that add up, yet easily can be avoided. That’s why the stigma surrounding third-party experts is so dangerous for property owners. Often, it is assumed that good business relationships alleviate any cause for concern. Frankly, it’s blissful ignorance. Don’t fall in to this trap.
Ownership groups stand to gain significantly by hiring outside resources for asset and property management services. Specialized third party asset management companies like SIB provide skilled and experienced personnel for a fraction of the cost of in-house human capital. Rather than replacing people in current roles, good third parties align with your team and earn their pay solely based on measurable ROI.
At SIB, we have access to enormous data sets that we’ve created through years of experience working across a variety of industries. We can provide unparalleled insight into whether category-specific rates are market appropriate. With comprehensive market knowledge, we can help you gain true leverage in negotiations and ultimately reduce costs to help you improve your NOI.
SIB will take the lead in working with your current vendors to identify service levels and contract terms, check for contract compliance, correct billing errors, and obtain credits or refunds as appropriate. We’ll also identify service optimization opportunities and negotiate better contract rates and terms based on our extensive database of benchmark rates. This all comes with no disruption to your current service. Best of all, SIB assumes 100 percent of the risk throughout the entire process: you pay nothing unless we are able to find opportunities to reduce your costs.
Contact us today to schedule a kickoff call and start saving.