The Hotel Times - June 2008 - (Page 28) BROKERS UPDATE Continued from page 24 good relationship with the existing brand because of notification issues involved in a sale, and with a prospective new brand if the decision is made to switch flags. Going global The internationalization of the brokerage business is evident in the fact that Hotel Brokers International changed to that name a decade ago, said Charles Fritsch, president of MBA Hotels, who until recently was president of HBI. He said the name change was ª part of an effort to expand our membership globally.º Cultural differences must be recognized, Hunter said. ª We had a group from England that wanted to buy in Florida. They deal one-on-one and it would be rude for a seller to negotiate with more than one party. Here in the U.S., at the height of buying offers, a seller would deal with many potential buyers.º For example, Mallory explained his thoughts on doing business in Dubai: ª You can send out a flyer to somebody in Dubai, or you can have somebody in Dubai. When you think of the dynamics of the upper segments of the market, finding a brokerage firm that has that kind of footprint and access to those capital markets day in and day out will give you better opportunities as a seller to tap these markets.º Mallory ' s company operates in 72 countries. ª I have people in London, Dubai and Paris who are hotel specialists. These are people who came out of the hotel business,º he said. But even brokers without significant international presence are seeing overseas action. Fritsch said he recently put a 5-star resort in Marrakech, Morocco, under contract because the developer ª is a U.S. citizen but a global citizen as well. He contacted us because the buyer is a U.S.-based company.º MUMFORD COMPANY Asking for references is crucial when searching for a broker, said Ed James, a principal with Mumford Co., who brokered a deal involving this Comfort Suites. Of course, technology has made all this easier. ª With the speed of e-mail, [everyone] can look at a property online, so the world is shrinking,º Frisch said. Changing roles As with all other areas of the industry, the role of the broker is evolving rapidly. As James said, ª It is critical that brokers stay on top of changes and take an active role in marketing the property to the right buyers and manage all the tasks between contract execution and closing. To be successful today, the broker must be competent and involved in marketing, financing, branding and legal issuesÐ and more than ever must be an active participant in the transaction.º ª With larger assets and portfolios, the role of the broker has become much more akin to that of an investment banker,º said Charles Human, a consultant with HVS International in London. ª With deal structuring and financing becoming much more complex, the skill set of a hotel broker needs to be broader and more sophisticated.º ª We see ourselves as having an advisory role,º said Fritsch. ª We' re not selling a house. There is not high pressure to make a sale. Generally we are representing the seller and what we have to offer is our integrity.º The brokerage industry will continue to grow ª as investors continue to see hotels as an industry that is not as risky as once thought, Fritsch said. It is the management intensive nature of the business that has brought that risk but the right broker will help with finding the right management company.º ª There is a certain amount of ego involved in owning a hotel,º Fritsch said. ª It' s up to the broker to make sure that is not misplaced.º And in the end, selling a hotel just might not be the right thing to do. ª If you have an agent who only sells hotels, they will tell you to sell,º Adler said. ª But it might not be the right time to sell. A hotel might be better off refinancing, or making some capital expenditures or bringing in a new management company. The best broker will be candid about all those options.º Similarly, Kudlak said, ª Increasingly, successful brokers serve as true advisors to their clients. We are able to assist clients with determining asset value, discussing optimal hold times based on their goals and assisting in creating optimal disposition timing and marketing.º hmm@questex.com 28 The Hotel Times June 2008 www.TheHotelTimes.com http://www.TheHotelTimes.com
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