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Hotel Management Assessment Consultants

Cayuga Hospitality Consultants are able to aid in this basic requirement of the hospitality industry through their knowledge and experience in key leadership positions throughout the industry and their years of consulting experience. Our consultants are able to quickly and comprehensively perform:

  • A hotel management assessment
  • Evaluate a management team
  • Assess the culture of an organization
  • Check for policies and procedures that may impede productivity
  • Evaluate quality of service and facilities
  • Bring actionable solutions to owners and operators

Hotel Management Agreement Consultants

Hotel management agreements among the large branded management companies follow what by now has become the standard formulation for fees, at least before the negotiation commences. The base fee and incentive fee are now well known in the industry and expected as the starting points in most manager-owner negotiations. Our consultants readily:

  • Calculate the Base Fee in hotel management agreement
  • Calculate the Incentive Fee in hotel management agreement
  • Balance Hotel Owner Objectives and a Management Company’s Incentives
  • Implement a Hybrid Formula to Help Calculate the Incentive Fee

Training and Development Consultants

Cayuga Hospitality Consultants will offer results-driven solutions to:

  • Elevate levels of service
  • Support cultural change
  • Create positive work environments
  • Establish plans and deliver training and professional development
  • Assist ownership and/or management through reorganization or rebranding transitions.

Cayuga’s consultants understand the complexities of managing a diverse workforce and provide prudent and comprehensive solutions to their assignments.

Hotel Management Agreement Bargaining

The Hotel Management Agreement (HMA) forms the basis of the ‘bargain’ between the management company and the owner in a typical, full-service branded hotel management agreement. These are the provisions that are likely to be negotiated over a period of weeks, even months, assuming bargaining strength exists on both sides of the negotiating table.

The trend is to set out the basic business terms first in a Letter of Intent (LOI) before proceeding to the ‘definitive document’ phase. 

Some basic terms:

  • Brand Selection
  • Identification of the Parties
  • Description of the ‘Hotel’ or ‘Project
  • Residences

Once you have a fundamental understanding of these, you can then focus on what is actually negotiable in the HMA:

  1. Term Length and Conditions
  2. Performance Test
  3. Revenue-Based Fees
  4. Incentive Fee
  5. Other charges such as technical service fees
  6. Furniture, Fittings, and Equipment Reserves (FF&E)
  7. Budget Approval by the Owner
  8. Capital Expenditures
  9. Owner’s Financing
  10. Credit Enhancements: These are sometimes provided by management companies to enhance the owner’s ability to finance the hotel. 
  11. Employees
  12. Hiring and Firing Key Personnel
  13. Indemnification and Insurance: It’s typical for the management company to expect the owner to indemnify the management company against all claims, losses and liabilities, except for those arising out of the management company’s acts that constitute willful misconduct or gross negligence. 
  14. Damage and Destruction: Property insurance is provided by the owner with coverage acceptable to the management company. 
  15. Sale of the Asset
  16. Agency (termination and wrongful termination)

These are many but not all of the negotiating considerations. Many other areas are addressed in the HMA, such as governing law, dispute resolution, etc. They require experienced counsel as well as hotel development and operational expertise. 

What is the Difference Between a Manager and Leader

As you may know, there is considerable discussion in the literature and at various forums about factors that distinguish a “Leader” from a “Manager”. Many people make no distinction, assuming that a person in a management position must be a leader as that is inherent in the position. Such people confuse “positionship” with “leadership”, for the mere occupancy of a position does not guarantee real leadership.

Managers tend to focus on the immediate situation as they function in the present and are usually measured in this way. While they are peripherally aware of the future, they really don’t spend a lot of time contemplating it.

Leaders, on the other hand, do look to the long term, realizing that the present is a fulcrum future direction and results. If they were chess players they would be thinking several moves ahead. Leaders mostly think strategically, managers mostly think tactically.

Managers focus on the process of management and immediate efficiency more than leaders do. Leaders think about how they invest their time creatively and surround themselves with, and develop, the strongest talent so that those talented people can grow and do more and more over time. Leaders believe that if they do so, their people will do a better job of watching and improving the processes than the leader could do himself or herself.

Leaders understand that compensation is a satisfier, not a true motivator. Once this satisfier is in place at an acceptable level, people are motivated by the nature of the work, the challenges, opportunities to learn and grow, and whether or not their bosses support and care about them. Managers, on the other hand, often think of their subordinates as responding best to financial rewards and incentives.

Someone once said that “Managers get work done through other people,” but leaders “develop people through work”. Since leaders need to know what “makes people tick”, they want to know a subordinate’s long term goals and aspirations so they can fashion ways to combine personal goals with the work at hand, as well as the organization’s goals. The current buzzword for this is “alignment”. For any given project it may be less important to know people’s long term goals, but for organizational growth and success it is necessary over a period of time. Leaders tend to be contemplative and social, managers are often impatient and mentally preoccupied.

Leaders recognize that individuals are motivated differently and so consistency is not an absolute virtue in their recognition of people. Some people may like public praise, others may appreciate the opportunity for more flexible time, for example. Managers emphasize systems more than they do people or personalities. Many manages do not recognize that a policy is not a regulation and “hide” behind policy when a vexing situation arises, wherein the right thing to do is to deviate from established policy.

Managers tend to think more about what has been done before and try to make incremental improvements, while leaders like to challenge themselves and their people to bring out their best in ways they never thought possible, so quantum leaps can occur. They establish new paradigms.

A manager’s priority, from which he or she usually derives the most satisfaction, is based on process and efficiency. “Getting it done” is their byword. Leaders enjoy success too, of course, but tend to revel in it more when it leads to growth of individuals and the organization. Their greatest satisfaction comes from having others who succeed them rise to greater heights than they did.

Leaders use time as a reward and seek to invest their attention where it can have the most upside impact. People usually have the most opportunity to grow and become truly great where they already demonstrate strong performance, and so leaders tend to avoid remedial projects or the constant oversight of weaker performers. Instead, they spend more of their time with the people most likely to bring the greatest advances in the future. Managers tend to focus more on problems to solve than they do in boosting people to previously unachieved excellence. Leaders are “fire lighters” (passion), managers are “fire fighters.”

Leaders try to get to know people and understand them in a personal way without being invasive or inappropriate. They evidence compassion as well as objectivity in their decision making. Many managers tend to be more “cut and dried” in their working relationships, which can be perceived as insensitivity. Leaders “think with a cool head and a warm heart, not a hot head and a cold heart.”

Some of the best managers are very good at studying “best practices” and ways to “build a better mousetrap”. Leaders tend to look for more of the “Einsteins” and star performers who are likely to find a better alternative to eliminating mice than the snap trap. Leaders possess and look for creativity. Managers are more conformity minded.

Leaders are all about finding and cultivating talent and are not threatened by it. Managers usually want to feel more in control of their surroundings, not the least of all because highly talented people can be very independent and often “difficult to manage”. Leaders often have stronger social skills than managers do and are better prepared to deal with strong egos. Many managers lean toward inflexibility.

As headstrong as many leaders can be, they know from experience that being headstrong can be a liability, and they have learned to listen and be accepting of other’s points of view. Managers may be more focused on what they believe to be the “right way” to do something and may be less open to hearing divergent views. Leaders may not always enjoy hearing opposite views, but they evidence the concept of “let the best idea win.”

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