Hotel & Motel Management - December 29, 2008 - (Page 58)

» BY JENNIF ER KOVAC S, SENIOR EDI TOR Tight management will be key in downturn comes bargain shopping, and guests already are ﬂocking to third-party booking sites trying to ﬁnd deals. And if hoteliers react by slashing rates, “There goes the neighborhood,” he said. Faced with pressure from both clients and competitors, management companies may ﬁnd themselves forgetting to react instead to the economic environment, said Jerome Cataldo, EVP of development for Hostmark Hospitality Group. “If you can maintain the rate structure, that’s the best thing to do. Lowering rate will not bring back demand,” he said. But it’s a Pandora’s box many may want to open once the property next door takes a peek. “It’s difﬁcult if someone starts that ball; it does have a tendency to snowball. All you can do is try individually as a property to maintain your rate integrity,” Cataldo said. Habeeb HOSTMARK HOSPITALITY GROUP Growth Properties, ﬁrst is focusing on broader moves like reducing waste, from keeping fewer cases of linens and food in stock to making sure lights and heat are turned off in guestrooms when unused. “For us, it’s a ﬁne-tuning process, and we take our everyday practices and turn it up a notch,” he said. Seek opportunities Amalﬁ Hotel Chicago is one of the 27 hotels managed by Hostmark Hospitality Group. Hold rates Habeeb noted that with a downturn often 58 HOTEL & MOTEL MANAGEMENT | THE ADVISOR DECEMBER 2008 www.HotelMotel.com HOSTMARK HOSPITALITY GROUP t’s safe to say 2009 will be a difﬁcult year all around for the lodging industry. However, with revenue expected to drop right along with demand, management companies especially will be put to the test. And with all signs pointing toward this downturn not having hit bottom quite yet, Bob Habeeb, president and CEO of First Hospitality Group, said the biggest challenge in the coming year may be how it eventually unravels. “We’re in a brawl with no rules. This is something we haven’t experienced in my lifetime. … I think we’re going to have to be patient and prepare for the worst, but we can’t even gauge the worst,” Habeeb said. So until the future becomes a bit clearer, Habeeb said he anticipates some paradigm shifts will be seen within management companies to prepare for whatever the future may be. “You have to hunker down and assume we’re going to be in a period of weak demand. Restructure costs as best you can without signiﬁcantly impacting guest service,” he said. I While management companies will face challenges, those with solid histories who are open to potential acquisitions or are marketing themselves to new owners stand to ﬁnd a world of opportunity. “Every crash is a boom in waiting,” Habeeb said. Cataldo said Hostmark will look to its history of providing transition management services to involuntary owners like lenders or court-appointed receivers FIRST HOSPITALITY when bankruptcy scenarios come Control costs into play. “The ﬁxed costs are the ﬁxed costs, and “Usually in times of turmoil, it results in those are hard to do anything about,” Catal- new management opportunities for us. We do said. From taxes to utilities, some expens- have a long history of doing that,” he said es can’t be avoided. Ciro said the coming year also will be a Cataldo said for management compa- good time for hotel owners who aren’t seeing nies, efﬁciency will become key. And when the results they would like to bring on help. the bulk of any given budget is spent on per“It’s going to be a good time for managesonnel, taking a look at stafﬁng becomes the ment companies to go out and provide serlogical next step. vices to underperforming hotels,” he said. But, Cataldo added, making staff cuts, jkovacs@questex.com like anything else, can only be done to a certain extent before business is affected. “That’s a dangerous thing to do, and we very much believe that’s too short-sighted if you cut things to the point it’s affecting customers. I think it hurts you in the long run. You Hostmark manages both independent and ﬂagged lose those customers,” he said. hotels, like the Embassy Suites Palm Desert (Calif.). Vince Ciro, VP and director of business development for http://www.HotelMotel.com

Table of Contents Feed for the Digital Edition of Hotel & Motel Management - December 29, 2008

Hotel & Management - December 29, 2008 Contents Viewpoint Outlook Purchasing Companies See Green and Save Purchasing Chart Designers Target Lifestyle, Lobbies and LEED Design Chart Construction Chart Construction Outlook Bleak Lending Chart Lenders Tighten Standards in Uncertain Market 2009 Requires Changes Across the Board Brokers Chart Brands Chart Building, Developing a Brand Tight Management Will Be Key in Downturn Management Chart Year of the Turtle: Slow, Steady Will Win Race Owners Chart Consumer Trends

Hotel & Motel Management - December 29, 2008

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