How Management Companies Can Benefit Hoteliers

The hospitality industry is coming off another strong year, making hotel investment an attractive prospect for business people in other sectors, as well as owners who want to add more properties to their existing portfolios. In a time of aggressive growth, it can sometimes be difficult for owners to keep up with the day-to-day operations of their properties, making management companies essential to the continued growth of the industry.

According to Joe Khairallah, COO of Marcus Hotels and Resorts, owners should look to their management companies as a resource. “A management company can help owners hire and train their teams and ensure—in both the short and long term—that each property is competitively positioned to deliver a strong return on investment,” Khairallah says.

A number of industry trends are impacting management companies and the way they interact with their hotelier clients. The first is an industry-wide labor shortage. Higher occupancy levels require more staff to keep the hotel running smoothly, and while it is a management company’s job to find, hire, and train that staff, it may be difficult to find candidates that match a property’s needs. “Talented people, who also have passion for the industry, are becoming difficult to find even when they interview with some experience. Many hotels are competing for that talent. In 2016, we are going to find that the way to gain the best new hires will be through social media,” Khairallah explains. The millennial generation, which relies heavily on social media in everyday life, has driven companies to be more media-minded than ever before.


Online reputation management will also be top of mind this year. Now, much of a hotel’s marketing and customer service efforts can be done online. Through targeted ads and social media postings, hotels will be pushed toward monitoring all social media platforms 24/7. “The cost of acquisitions continues to grow,” Khairallah says. “We are now servicing more and more millennials who choose their brand loyalty through social media apps and based on what others are saying about the properties. But they are also choosing to become loyal members based on their uncomplicated experiences.” By enhancing their experience through evolving technology such as keyless guestroom entry systems and mobile check-ins, hoteliers can continue to stay at the top of the pack.

Social media also presents another possible revenue stream. “It is not enough to simply make money now, you have to make money all the time. This can be done with skillful use of social media and revenue management,” Khairallah says. Through creating perception on a hotel’s social media sites—and monitoring and answering online customer reviews—management companies are able to influence how customers choose their next stay.

Additionally, management companies are helping hoteliers manage the rising costs associated with an economic uptick. “With rising food costs, minimum wage increases, and other skyrocketing costs, you have to be smarter about what business you go after and understand the profitability of that business,” Khairallah explains. “It’s all about buying the right business at the right time, and that’s what a good management company will help a hotel owner do.”