Lit up building next to ocean

Condo-Hotel Management
Requires Transparency

Condo-hotel management offers a unique opportunity to grow portfolios, but it comes with a challenge not found in traditional hotels: working with multiple owners, while trying to maintain a consistent product and guest experience.

HOTELS Magazine – By Guest Contributor on 11/14/2019

Condo-hotel management offers a unique opportunity to grow portfolios, but it comes with a challenge not found in traditional hotels: working with multiple owners, while trying to maintain a consistent product and guest experience.

Contributed by Jack Geraci, corporate director of operations, Charlestowne Hotels, Charleston, South Carolina

Because each condo unit is owned by someone different, consistency is not only difficult but imperative for the property’s success. Navigating that terrain can be challenging at first, but it’s not impossible if approached with transparency from the management company. Here’s how to do so.

Lean on a strong board

Keeping in mind that every condo-hotel project may be different, typically the property will have a board of directors that represents the entire ownership. Usually this board is comprised of five homeowners who volunteer their time and make decisions for the ownership as a whole. This board will communicate directly with the management company, so it’s important to have a strong group.

That strength starts with a little show and tell. That is, the management company needs to be transparent in everything it is doing. At this point, there is no such thing as oversaturation in reporting. Whereas this over reporting wouldn’t be a necessity with traditional hotel owners who know the business, it’s essential here. Provide the top analytics and, in a short amount of time, make sure the board truly understands what you’re doing as a management company.

For the first six months that you work with the board, provide analytics for everything from revenue management, marketing and IT projects. The expertise the management company brings to condo owners may not be fully known during the early stages of the relationship. By showcasing the value through analytics, both parties can be on the same page and review the most important information together. Even further, you will build credibility and strengthen your relationship with the board during this process.

From there, you will be better poised for homeowner presentations, which can be laid out in more layman’s terms. The property’s bylaws or management agreement will detail how often you get the opportunity to communicate with individual owners. You may only get the chance to speak with them twice a year, so that’s why a direct relationship with the board of directors is your lifeline.

Help owners take ownership

Just because the management company doesn’t always have direct access to individual owners doesn’t mean they aren’t important to the success of the property. They have the opportunity to make or break a consistent guest experience. As the management company, it’s your job to help owners take ownership of their investment. Again, transparent reporting is essential.

Condo-hotel units aren’t like traditional hotels where every room has the same FF&E package. Individual owners have individual tastes, and the units reflect that. While the homeowner association’s capital fund will cover the costs of any renovations needed in public areas, it’s up the homeowners and their wallets to pay for the upkeep to their condos. Sometimes it can be tricky to convince owners that their units need work—after all, homes are very personal assets. Or, if the owner lives in another country and hasn’t seen the unit for awhile, for example, it might be difficult to convince them it’s time to shell out the money to renovate.

As a third-party management company, it’s your job to convince homeowners that consistency across the board will only help to drive revenue. But it’s impossible to force everyone to decorate the same way, so it really comes down to a unit grade program.

A unit grading program will ensure fairness for all. Owners know that an “A unit” will have the opportunity to be booked before a “B unit”, and then before a C, and so on. However, you won’t find success in simply sending D-graded owners a list of demands. Letters should be sent with the unit’s grade, suggestions for renovations and guest’s comments about the condo. Additionally, provide photos and videos of the unit so that the owner can truly understand what needs to change.

Remember that money talks. You can also provide statistics on what higher rated units typically earn. You want owners to understand that the changes you request will lead to a greater opportunity for bookings and revenue potential.

Not only will transparent reporting and communication garner buy-in from owners already part of the rental program, but it can help to capture interest of homeowners who have yet to join. And the more buy-in you get, the better for the bottom line for everyone.