Picture this: you’ve purchased a site, found the ideal brand and operator and the hotel management agreement is drawn up. Happy days. There’s a named brand ready to display proudly on the front of the building and a solid strategy in place.

Set and forget, right? Well, not so fast.

We’re all familiar with the big brands of hotel land. And so are travellers. But gone are the days where just a brand name and what comes with it – the lifestyle, the experience - is enough to capture a guest’s attention, particularly those in the Gen Z demographic.

We’re increasingly seeing that hotels need to tap into the wants and needs of Gen Z to see longevity and ROI. Namely, they need to have the connection to place and locality that these travellers seek, whether that’s through the hotel’s design, operations, F&B offering or other.

So, how can you lean into this while your asset bears the name of a global hotel brand that has ‘set in stone’ marketing and strategic guidelines? Here’s what an asset manager will say.

Start your journey on the front foot

The idea of being driven by an operator and the proposal(s) that come to you? Outdated and less likely to end in success in the long run.

Why? A hotel should always be designed to match its market.

Approach the operators with brands that are most likely to fit the product and market – this is where an asset manager can help. Together, analyse the market and what will resonate with guests. Then, approach the brands that will provide the best fit for this vision. This approach has proved successful for many of Axsia HTL’s clients, including owners behind the soon-to-open 1 Hotel Melbourne and Four Seasons Hotel Melbourne, as well as The Tasman, a Luxury Collection Hotel, Hobart.

Be involved in the running of your asset

The shiny strategy packet presented by your operator is always enticing and usually a good start. But it’s not the be-all and end-all.

You need to consider budgets, goals and marketing activities that match the market and deliver what guests want and need. And you should review these over time to ensure they continue to deliver ROI.

Performance to market is vital; it will drive profitability as a result. Operators will be receptive to this as long as you are respectful and knowledgeable (which is where an asset manager can help).

The head office of an operator has its value, but always consider how you access it. Plus, we’re starting to see the downsizing of corporate offices and less experienced management teams being placed into properties.

Being involved in and having your finger on the pulse when it comes to the running of your product will ensure it runs its lifecycle and that you can capitalise on opportunities quickly and swiftly. Take one of Axsia HTL’s clients, a resort in Far North Queensland, as an example. The owner found the property to be competing against an aspirational competitive set, creating a harder RevPAR target for the operator to achieve. So, we sat down and together identified target market customer service gaps. Today, the asset is outperforming a set of very optimistic benchmarks.

Consider a franchise license agreement

Franchise operator agreements are prevalent in the US but are yet to catch on as strongly in Australia. While a hotel management agreement (HMA) hands over the management of a hotel to a hotel brand/operator, a franchise license agreement (FLA) gives the hotel owner the right to operate the hotel under the franchisor’s brand in exchange for a fee. Consider it like this: you can influence the outcome under an HMA, but you can direct the outcome under an FLA.

An FLA can be highly beneficial for owners because they reap all the benefits a big name can bring, but you have total control of your own infrastructure and, ultimately, your revenue. You’re not at the behest of a big company telling you what the best strategy is.

And if this sounds daunting, this is where a hotel asset manager comes into play. They can support owners through a product’s whole lifecycle, consistently review its feasibility to ensure ROI and advise on appropriate strategies.

Related Reading:

Is Gen Z driving hotel trends and opportunities? – Axsia HTL

Hotel Franchising – The Future in Australia - Axsia HTL

Axsia HTL Case Study: How a collaborative approach can lead to improved market positioning and financial benefits