The current hotel climate is certainly experiencing a degree of uncertainty in the form of mixed messages. Reports of an expected hotel boom or vast improvements in tourism numbers are surfacing, yet as we move in the hospitality circles with our ears to the ground we are still noticing a lot of properties that are in distress. So the big question is when is a hotel in trouble? When and who should an owner call for help?
Generally speaking, hotel owners seem nervous to hand over management of their property to a hotel management company. This is probably due to a period in this country when hotel management companies were not living up to expectations. Much has improved over the last decade, but owners are still hesitant and some prefer to go it alone, not realising that this is a very dangerous choice. With no hospitality experience or knowhow, a hotel can soon run into financial distress and without warning an owner will be faced with many tough decisions.
Having recently been part of the business rescue process up at Shelley Point Hotel, Spa and Country Club on the Cape West Coast, it was clear to us that although hotel owners are often mavericks in business, a non-hotelier is not equipped with the skills to manage, operate or market a hotel. This is a management company’s purpose; it’s what we study, live and breathe. It’s our job to monitor trends and stay ahead of the game. As hotel professionals, BON Hotels would easily detect if a hotel is entering dangerous territory. It takes an experienced hotelier to acknowledge and quickly address problems in good enough time to rescue the business and turn it around.
BON Hotels has developed a business rescue program for the distressed hotel market and has included a targeted fee structure with performance targets and a policy of risk-to-management-company through signing over a portion of its management fee should the hotel not perform.
Shelley Point has taught us a great deal and we have proved that in as little as a few weeks, we are able to make a significant difference to the bottom line. With an experienced set of eyes and a smart restructure, the damage can often be rectified in a matter of weeks.
