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Marrying owner and operator
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Marrying owner and operator

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Viability's Guy Wilkinson writes a monthly column for Hotelier Middle East Magazine. This article originally appeared in November 2011. ...

Viability's Guy Wilkinson writes a monthly column for Hotelier Middle East Magazine. This article originally appeared in November 2011.
For more information about Viability, please visit http://www.linkedin.com/company/2347942 or http://www.viability.ae/

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  • 1. 24COMMENT Marrying owner and operator Viability director and managing partner Guy Wilkinson urges early caution when establishing a relationship with your owner; decisions taken at the outset can have repercussions later on the eye contact is never established and the operator is unceremoniously removed from the short list. Equally, it can be very unfortunate if key members of the contract nego- tiation team are absent from subse- quent dealings with the owner. The pre-opening period can be a crucial testing ground for the owner-opera- tor relationship, when a lot of money has to be spent without seeing any immediate return, and a lot of major COLUMNIST decisions made in quick succession. I have seen too many examples of ‘dis- connect’, when the owner has to deal hen a hotel owner is seek- with myriad new team members from W ing an operator to man- age his/her property, it’s a bit like a courtship. I know this is a cliché, but neverthe- less the comparison can reveal a lot the operator’s side — be they techni- cal services staff, pre-opening special- ists or incoming GMs — while those friendly faces from the development department or regional director’s about some of the pitfalls inherent office are unavailable for comment. in the process. Let’s just get the pre- Of course, the same problem can dictable analogies out of the way. also affect the operator, if for exam- It begins with a ‘beauty parade’, in Let’s hope that your owner-operator relationship is more stable than this slippery marriage scenario. ple, outside advisors involved with which the operators each strut their the contract negotiations are not stuff and show off their assets to win retained as owner’s representatives. the owner’s favour. It proceeds to a ‘pre-nuptial agreement’ with a single THE PRE-OPENING PERIOD CAN BE A I realise I have something of an axe to grind here, but the reality is that party, before a full marriage contract CRUCIAL TESTING GROUND, WHEN A LOT OF a management contract provides a is signed. As in modern society, the MONEY HAS TO BE SPENT WITHOUT SEEING framework for all subsequent inter- alliance may only last say, 10 to 15 ANY IMMEDIATE RETURN actions between owner and opera- years, before a divorce becomes inev- tor, and its first and arguably fiercest itable — and sometimes earlier, due testing ground is the potential mine to ‘irreconcilable differences’. In oth- field of design, construction and pre- er cases, of course, marriage is like reality, however, the best corporate who is making the lion’s share of the opening. Why not keep on hand the going bald — there’s no parting… alliances may well be based on just investment in a hotel, and taking very people who dotted the i’s and which would all mean, by inference, such a relationship. The final deci- way more risk than the operator. He/ crossed the t’s at the contract stage, that the humble hospitality consul- sion regarding which operator gets she rightly expects to be treated with to keep tabs on the practical actions tant often plays the successive roles appointed often depends on the rap- the utmost respect, and to deal with resulting from those long-considered of chaperone, minister and marriage port established between the owner mature, experienced hotel people decisions? Not only that, but surely it guidance counsellor! or their representative, and one single who can share — or at least relate to is important to recognise the value of The first tip I would offer those individual from the management — the outlook of a very rich and suc- retaining those loudest well-wishers about to embark on such a relation- company, be it a development direc- cessful business person. Of course, the at the wedding, those who always ship is to remember that both before tor or someone more senior. Thus the ability to find other common ground remember to send anniversary flow- and after all the features and ben- role of all staff of a hotel chain is sen- — in terms of language, culture, inter- ers? At the end of the day, it all boils efits, terms and conditions have been sitive, from the junior support staff ests, even politics and religion — is down to relationships. HME discussed and negotiated, what ulti- to the senior decision maker, as is the also important. mately matters is that the two par- ability of a chain to offer personnel Too many times have I seen my ties actually like each other. In many continuity, ideally over many years. hotel-owner clients’ expressions on ways, the union of two large organ- being sent a junior representative to Guy Wilkinson is a partner of Viability, a isations like an owning company MEETING EXPECTATIONS ‘sell’ them the virtues of a giant global specialist hotel and real estate consulting firm and a management company would At the end of the day, the owner chain. The PowerPoint comes out, the in Dubai. Email him at guy@viability.ae seem very different to a marriage. In rightly views him/herself as the one slick brochures are distributed, but November 2011 • Hotelier Middle East www.hoteliermiddleeast.com