New Hotel Owners Who Relinquish Control to Management Companies Are Putting Decision-Ma... - 0 views
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Lawrence Cohen, Executive Consultant and Hospitality Group Leader at Ne
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w York-area accounting and consulting firm Marks Paneth & Shron LLP, has published a commentary examining the conflicts of interest and dangers hotel owners face when hiring a third-party management company.
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hotel ownership requires strategic and operational decisions to be made in real time. As such, critical day-to-day decisions that can make or break a hotel's success are often not in the hands of ownership but rather within the purview of the third party management company.
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Lawrence Cohen, an Executive Consultant and Hospitality Group Leader recently examined the conflicts of interest that hotel owners face when hiring third party management companies. According to Cohen, owing a hotel requires both strategic and operational decisions to be made in real time. The problem occurs when real estate owners go from owning commercial property to owning hotels and are not used to making decisions on a daily basis. As a result, the most critical daily decisions that determine the success of the hotel do not fall into the hands of ownership but rather to a third party management company. These third party relationships may result in hotel management staff being loyal only to the management company rather than the hotel itself. Hotel owners could benefit by building a team with experience in the hospitality industry and hiring individuals loyal to the owner.