Frequently Asked Questions
To help you gain a better understanding of our management and business philosophy, we have provided brief answers to a few common questions. To receive further communications on that subject from MHG, please click on the question that most interest you.
1. Why would I need a management company?
When it comes to business, there is not one solution to fix all deficiencies. In fact, not all hotels need a management company. We believe that if your hotel is not achieving your desired goals in the areas of service, operational efficiency and profitability, then there is probable need to consider introducing additional expertise to the equation. You may need a group of specific services or full management services. In any case, the current status of your hotel will determine your needs when compared to your investment and operational goals.
2. Should I go with a brand or be an independent?
It can be a painful realization at times when we must write sizeable checks to a franchise company. The ongoing consideration is whether those dollars were well spent. Could you have gotten that revenue anyway? In today’s business environment competition is driven by global, national and regional presence. If you own a hotel in an urban or near urban market, chances are you are competing against at least two major brands. As an independent, it would almost certainly be a losing proposition. The level of exposure, training, support, loyalty and global recognition that is usually received from a brand is essential. While there are some affiliations of independent hotels that do quite well, they are often conducive to primarily specialty hotels, boutiques or properties of a resort nature. That being said, having a brand is great, however, it is essential to choose the most appropriate brand for your property and market. We have seen hoteliers make the mistake of not playing by the rules of the game. They have found that loosing 25% to 35% of top line revenues is much more painful than the signing of a check to pay franchise fees.
3. Why is my hotel not getting its fair share of the market?
This is probably the most common question received from owners during the initial consultation. It is a very important question. The good news is that there are many good answers as well. There is an old saying: “The proof is in the pudding”. It’s true. “We would often say the proof is in the [Hotel]”. The answers to improvement often reside in the individual experiences at the property by the guests, employees and vendors. When conducting an initial SWOT analysis of a hotel, we are often amazed at how much the general manager and staff knows regarding the solutions to improve the current performance of the property. They often can identify most of the needed strategies for change and generally take pride in their work and hotel, but lack the leadership and empowerment to make effective change. Here are a few items that will get the ball rolling in the right direction
- Get involved in the process and be a part of the working solution
- Ensure clear, detailed and realistic revenue goals for your hotel
- Be sure there is an ongoing sales & marketing effort being executed
- Utilize all available brand promotions, tools and resources appropriate for your market
- Set annual, quarterly, monthly, weekly and daily (revenue, quality & service) goals. Be sure to review them often against performance
- Have regular revenue meetings and execute them with a set agenda. Identify (negative/positive) trends and implement strategies to gain improvement where necessary
- Know the pricing sweat spot for your market and your hotel. Set your pricing structure according to optimal market mix to maximize your yield
- Know your market compression trends and be prepared to maximize rates when available
- Develop a reward system to encourage successes!