Smooth Operator

With 18 properties in its portfolio, HII will launch three this year in Quezon City, Ortigas and Makati. Last year, it opened four hotels to healthy occupancy and positive reviews from OTA (online travel agency) portals.

A hotel third party operator observes that one positive economic indicator is that more people are asking his company to run their properties.

“If you talk to finance experts, they point out that there is liquidity in the market. Potential investors are interested in tourism, and we get approached by people with that mindset,” says Luis Monserrat, founder and CEO of Hospitality Innovators Inc.

Dubbed HII, it is one of the few management companies in the hospitality industry.

“As a management company, our role is to handle all aspects of hotel operation. In sales and marketing, we make sure that the hotel has guests, occupancy is good. In service, the guest experience satisfaction is high. We manage financial aspects of the business: Costs are controlled; expenses are incurred efficiently; budgets are met, and the owners get their desired return on investment. Lastly, the assets of the owner are properly maintained. A hotel owner doesn’t have to worry about the day-to-day side of the business,” says Monserrat.

With 18 properties in its portfolio, HII will launch three this year in Quezon City, Ortigas and Makati. Last year, it opened four hotels to healthy occupancy and positive reviews from OTA (online travel agency) portals.

The performances of Hue Resort in Boracay and Hue City resort in Palawan, owned by businessmen Dexter and Dennis Lee, exceeded expectations. Established developers such as Ortigas & Company and Alveo Land likewise tapped HII to run their respective serviced residences at the Cirque in Cirkulo Verde, Pasig and Kasa Luntian in Tagaytay.

“Monserrat explains that creating awareness, pricing and service are critical factors for success. HII leverages social media as an important tool in marketing to customers."

“We work closely with OTAs as they are a growing channel in the industry. Once these hotels are listed in their sites, they get noticed and, hopefully, bookings. We also do promotional tie-ins with the OTAs,” he says.

Guest feedback is more important than ever since reviews are posted in real time. Aside from helping the hotel improve its product and services, the online reviews can also indicate a market trend.

HII prices range from P4,500 to P6,500 a night for a standard room in Makati—even cheaper with OTAs, compared with five-star hotels that cost P7,000 to P11,400 a night. Most of HII’s properties are existing brands, many of which were either condotels or serviced apartments, whose rooms have owners.

Monserrat says HII runs its condotels like a shared economy. The difference between an alternative lodging company, such as AirBnb for instance, is the business model. The CEO cites Parque España in Alabang, The Exchange Regency in Ortigas, KL Towers and Picasso in Makati, Vista Land’s Crosswinds in Tagaytay as examples wherein the developer provided condo owners another option to generate income.

“In our serviced residence program, we recruit the unit owners and set up a rental pool in the building. You don’t have to worry about your unit because it is operated like a hotel. You get a monthly income whether your unit has been occupied or not. From the revenues, you deduct the operational expenses and the earnings are distributed to the unit owners pro rata to the square meters or area they have in the pool. We’ve established that there is a market for this product. It’s more convenient than buying a unit and going through the conventional route of finding a broker and tenant,” he says.

On the other hand, alternative lodgings only earn when they’ve hosted guests in their room, condo or house. Meanwhile, the service provider/agent gets a commission. Moreover, the owner interacts with the client for collection or maintenance issues.

“With AirBnb, the owner is engaged with the guest. In our models, all of that goes away,” says Monserrat. Another HII advantage over the home sharing services industry is that its properties are in safe and centrally located neighborhoods.

However, Monserrat realized that in running condotels, the third party operator can be more effective when it also handles the property management.

“In a condotel, it’s helpful to run the property management so that everything is seamless,” he says.

Source:

Marge C. Enriquez. 2018, Jan 06. Smooth Operator. Business Inquirer. <https://business.inquirer.net/243654/smooth-operator>