Aaron Greenman, Executive Vice President, Acquisitions & Development - EMEA gives us his vision of a third party manager's job.
How do you define the role of a third party manager? What are your missions?
As a third party manager (when there is a brand franchisor involved), or simply as an independent, professional hotel management company (when property has independent branding), Interstate’s mission is simple: to optimise all aspects of operations, and manage those operations on a day-to-day basis, to achieve maximum profitability for property ownership.
Who are your clients currently?
Interstate currently works with a variety of types of hotel owners, broadly categorised as high net worth individuals, private equity, REITs and other (banks/special services, etc.). Most premier owners of hotel real estate recognise that Interstate is an industry leader in managing their property-level operations in a way that supports and realises their investment goals.
You had 10 hotels in Europe in 2010, more than 80 in 2016 how many properties do you run currently?
Interstate currently operates close to 100 properties in Europe, including the UK and Russia & CIS Countries. We also have an active, signed pipeline of an additional 15-20 hotels currently under development.
What are your development targets for Europe?
At this time, we are squarely focused on achieving greater depth in our key European markets: the United Kingdom and Ireland, Netherlands, Germany, and Belgium, with a more opportunistic interest in France, Spain and Italy.
What are the key elements to manage a hotel efficiently?
There is a clear delineation in our management structure between the achievement of revenue and the control and optimisation of cost structures. Our extensive commercial resources expertly work with the brands and other distribution channels to maximise total net revenue per available room, while our operations, finance and procurement platforms ensure we are controlling every euro (or pound) going out the door towards operating expenses. Achieving the above while also ensuring guest expectations are met and hopefully succeeded is the challenge we wake up to every day, enthusiastic of our ability to accomplish this.
How do you see hospitality landscape within the next 5 years regarding management strategy? What about franchise and leasing?
All parties within the hospitality landscape have agreed and acknowledged that professional independent hotel managers like Interstate are the best solution for all stakeholders, allowing each to focus on its own core competencies and achieve optimised results. In Europe, leasing is still very much prevalent, but we see leasing as a financing strategy, not a management one. Having Interstate manage leased hotels for the lessee fundamentally brings the same benefits to owners of freehold assets.
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