When you think about hotel management you are likely thinking about the General Manager, Hotel Manager, Director of Sales, and other leaders within a hotel that run it daily. You are right, they are running the hotel, but who do they work for?
Today, I will tell you about hotel management companies. I will answer two main questions:
- What is a hotel management company?
- What do the hotel management companies do?
Hotel management companies
The concept of hotel management started in the 1950s when big-name brands like Hilton and Inter Continental have started to expand internationally. Hilton and Inter Continental would buy a building, make a hotel out of it and hire a local company to run the daily operations. The brands would play the role of the hotel owner that collects the profits.
This created hotel management companies that today specialize in running branded hotels under brands across all levels. Almost every branded hotel today has this or similar management structure.
The practice of hiring a hotel management company became so popular because it divided the responsibilities of running a hotel. It splits the risks between several companies.
Hotel management company’s responsibility
Now that we’ve identified what a hotel management company is, let us look closer at their responsibilities.
The management company runs the hotel operations ensuring that they run a profitable business. Their responsibilities include all operations from hiring and training the staff, ordering supplies, cleaning the rooms, selling meeting spaces to entertaining guests.
The General Manager reports to the hotel management company AND the owner that hired the hotel management company in the first place. GM’s responsibility is to run a profitable business and deliver profits to the owner by running the hotel.
To clarify in the context, the hotel owner could be an individual, a company, or a real estate/trust fund. These will vary depending on the type of hotel and the market. The role of the hotel owner is huge so will leave it for another day. We are about bite-sized hospitality concepts after all.
Do you know who the management company is at the hotel you last stayed at or had your internship at? Did you know that you can find out by checking for a plaque in every hotel lobby?