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One Man's Opinion Vol 2, No. 4

In my last One Man’s Opinion, I discussed my epiphany about the “majors” and the “minors” in the hotel management arena. This was not so categorized in order to denigrate the “minors;” indeed, in the process of completing one of the assignments about which I wrote, I have gained an enormous level of respect for the manner in which some of these “minors” (included in this group was one of the largest hotel companies in the world, albeit, an independent, third-party manager) conduct their businesses.

The third-party manager may be my new favorite discovery. The companies that populate this space are comprised of smart, dedicated professionals, who ply their trade on behalf of owners, using the brands as the platform on which to provide returns. They can be brand-agnostic, as they have developed over time an ability to glean best practices in operations across brands and apply them to their day-to-day oversight of full-service and select-service hotels, branded and independent, alike. One regional manager may have a dozen or so hotels under his or her oversight, and those dozen may consist of several brands and brand families. These folks need to be agile and nimble, and their managers at all levels need to be flexible. This is the flexibility that, on paper and, they might argue, in practice, benefits their client, the hotel owner.

So, what makes the independent manager(s) so good? Let me count the ways –

  • fee flexibility
  • term flexibility
  • understanding of multiple brands’ standards
  • receptivity to owner involvement and strong owner approval rights
  • solid and robust reporting
  • staffing guidelines with fewer managers

These are just a few.

As the major brands are more accepting of franchising, the independent management companies have proven to be up to the task of taking on the day-to-day operating roles in a variety of hotel brands and types. It took me a long time to understand why, but now I get it.

Four Corners Notes

This is the first OMO I have written since legendary coach, Dean Smith, passed away in Chapel Hill at the age of 83. Many already have extolled Coach Smith for his innovations in basketball (including the Four Corners offense; as an aside, Coach Williams honored Coach Smith by opening the first home game after Coach Smith’s death by standing on the sidelines and calling the play by raising his hand with four fingers showing. The Tar Heels got a back-door layup on the play), his concern and mentorship for his players, his equality of treatment of stars and benchwarmers and his commitment to civil rights in the ACC, the State of North Carolina and Chapel Hill itself.

The principal of FCA, Michael Shindler, has over 40 years of sophisticated legal and transactional experience in commercial real estate, of which the last 30 years have been spent in the hospitality field.