Hotel Management Oversight(HMO)
With the ever increasing cost of hotel development, operating costs and over-supply resulting in the threat of diminishing returns, hotel owners and investors are demanding a more hands-on involvement in the long term management of their assets.
Being a hotel investor is a complicated task and far more complex than any other real estate venture. It is vital to have a comprehensive skill set that includes an understanding and knowledge of hotel operations, management of revenues and costs, accounting, marketing, economics, the market, and preservation of the asset, to name just a few.
Ròya International offers a unique HMO service with one key objective: To ensure hotel owners strategic objectives – financial and non financial – are met. Our role is to provide a comprehensive liaison service between our client and their hotel management team. Our core HMO functions:
- Monitor ongoing financial performance by reviewing the actual performance compared to budget and forecast, while benchmarking against the competitor set
- Evaluate the sales and marketing process to identify that the performance is in line with the established competitor set and sales targets determined, advising on necessary adjustments to reflect current market conditions
- Monitor the competitor market by tracking occupancy and average rates and new supply in the market
- Review the budgeting process by assessing proposed budgets and other operating plans to ensure they are aligned with the Owner's best interests and the asset's potential
- Advise on management issues by evaluating strengths and challenges of the operation and reviewing industry trends and best practice
- Negotiate and administer contracts by ensuring contract compliance and renegotiation of contracts for optimal return on investment
- Monitor capital expenditure by reviewing annual budget proposals, evaluating expenditure impact on profitability and ensuring Capital Expenditure is aligned with the Owner's interests
- Monitor the asset by evaluating the efficiency and competitiveness of major systems, regularly inspecting the physical asset and verifying compliance with authority requirements
- Monitor the hospitality investment environment in order to advise the Owner on potential exit strategies by tracking sales prices for comparable properties and capitalization rates
- Monitor owner investment's performance monitor the investment by assessing cash flow and returns versus the original investment plan, advising on any variances