Evolution of Hotel Asset Management

Abstract

As the hotel industry’s structure has become more complicated over the past decades, the asset management profession has likewise been evolving. To understand its genesis and current status, this article documents the evolution of hotel asset management from its early troubleshooting role to its present ongoing role of maximizing hotel values for owners. Based on a survey of hotel asset managers, this study found that these asset managers are highly educated, all had hotel management experience before becoming asset managers, and most had also been hotel developers. Many of the asset managers began their careers as hotel operators, but a substantial number began as consultants. Increasingly, asset managers are involved in analyzing strategic issues and making operating recommendations intended to improve the value of a hotel asset. Responding asset managers reported spending substantial time in monitoring the asset’s financial performance, operational reviews, and capital expenditure analysis. Typical performance measures are value creation, financial performance, operating measures, asset utilization, and growth measures, using such common metrics as gross operating profit (GOP) and revenue per available room (RevPAR).