Hotel Asset Management A World Apart The leading Hotel Asset Management Company serving Asia Pacific region S i n g a p o r e B a l i N e w Z e a l a n d i n f o @ g l o b a l a s s e t s o l u t i o n. c o m w w w. g l o b a l a s s e t s o l u t i o n. c o m
Table of Contents Asset Management for Hospitality: Key Benefits, Scope of Work Why Hotel Asset Management? Hospitality Consulting Support Development Support Operation Focusing on your Requirements Hotel Asset Management Consulting Operational Services Company Core Competencies Contact Information 3 9 11 11 11 13 13 13 13 15 18
Hotel Asset Management Key Benefits Definition Hotel asset management is the fiduciary responsibility of managing the lodging investment to meet the specific objectives of ownership. The asset manager's role in building value is analysed at both property and portfolio levels. What We Do At Global Asset Solution our hotel asset management services and solutions include providing the latest techniques in asset management and insight into current lodging-market and operational challenges. Scope Our scope includes management contracts, managing the manager, benchmarking property performance, and the capital improvement decision. The following pages provide more information on the key areas of our hotel asset management services and solutions: Monitor Hotel Financial and Operational Performance Track Hotel Sales & Marketing Targets Hotel Asset Monitoring & Control Capital Expenditure Check Hotel Management Contract Compliance Optimize Hotel Investment Strategies 3
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Monitor Financial and Operational Performance Review of actual hotel performance versus budget and prior year, oversight of budget approval process Benchmark versus comparable properties Review of rolling forecasts and business on-the-books Monitor effectiveness of revenue capture and cost control Monitor all charges from the management company Monitor sales and marketing activities Monitor guest and staff satisfaction surveys Monitor channel delivery and cost per booking by channel Monitor balance sheet and working capital requirements. Mission Bring the triangle closer together 5
Track Sales & Marketing Targets Monitor market rate, occupancy and RevPAR trends Monitor key demand generators by market Monitor planned supply additions Monitor refurbishment and expansion activity at competitor properties Monitor all pricing and distribution activity at competitor properties Owner Focus Counterbalance Objectives 6
Asset Monitoring & Control Capital Expenditure Monitor physical condition and anticipated capital expenditure requirements Monitor all major systems for quality and suitability - HVAC, PMS, telephone, Internet, TV/video and all relevant interfaces Ensure owner's interests are fully safeguarded by preserving consultants and advisers on property matters as required Review and advice upon all contracts with third parties on owner's behalf, particularly in regard to leases and material contracts Monitor all refurbishment and expansion activity on owner's behalf Check Management Contract Compliance Advise on initial selection and appointment of management/franchise company Monitor on-going performance and contractual compliance Scrutinise all charges for contractual compliance Evaluate system delivery, CRS performance, web performance and overall strengths and weaknesses Optimize Investment Strategies Conduct annual reviews in comparison with initial investment objectives Estimate market value and evaluate alternative strategies, such as further investment or expansion versus continued ownership Monitor comparable sales activity and trends in asset financing 7
A Tailor Made Approach 8
Why Hotel Asset Management? Critical Questions to hotel owners/investors: Does the operator position the hotel to maximize its value? Does the revenue team effectively apply yield management principles? What are the key cost positions and how they are managed? Do managers have specific and stretching targets? Do they deliver? Does the operator apply their preventive maintenance plan? Potential Consequences without Hotel Asset Management Lacking transparency and control of revenue, cost and operations management, and hence your property s value Unbalanced, short term focused management approach Increased renovation costs due to poor maintenance Mismanagement of working capital Operation holding large amounts of cash and inventory Operation withholding facts Brand building at the owner s expense Partial compliance with management agreement 9
Focusing on Owner Success 10
Hospitality Consulting Our hotel consultants offer you guidance through the complete process of selection and negotiation. Working towards a completion of terms most favourable to you, we start with an extensive study into the market, the potential competition and the most suitable management structure, followed by a letter of intent, analysis, due diligence, and ancillary documents. Our hotel consultants can also give you an operational hospitality view to support some legal aspects of hotel operation matters. This includes the revision and negotiation of management contracts, lease and franchise agreements as well as sales and acquisitions of hotels whether existing or under construction. We provide support on legal aspects of hotel operation matters by offering an operational hospitality view. Revision and negotiation of management contracts, lease and franchise agreements as well as sales and acquisitions of hotels whether existing or under construction, all come under our hotel consultants duties in this area. Development Support a. Planning phase: Financing, Design and Construction b. 10-Month Prior: Pre-opening Support c. Soft Opening: Monitor Performance and Investment d. Post Opening: On-Going Asset Management Operation Support As a premier hotel asset management company, our success lies in our proven ability to successfully create long-term value and consistently deliver impressive financial results for hotel owners. Our hotel consulting staffs have the experience and expertise to strategically position hotels in local markets while also creating product differentiation to gain a significant competitive advantage. Whether your hotel is full service, select service, or a lifestyle (boutique or luxury) property, and regardless of its size, Global Asset Solution's hotel asset management services can provide customized revenue-generating hotel operations for your property within its unique market segment. Global Asset Solution leverages comprehensive support services such as market intelligence and reporting, expert sales and marketing, human resources, procurement, next-generation IT, finance, and risk management, to create high-performance operations designed to generate increased revenues and profit margins for owners. 11
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Focusing on your Requirements & Budget You want to keep control of the operator? Does the operator apply their preventive maintenance plan? Does the operator positioned the hotel to maximize its value? We tailor our services to your needs, from external support to full control of the operation. You can select various options: Hotel Asset Management & Strategic Advisory Consulting Targeted Support Full Management Operation Services Monitor performance and investment Review ownership s objectives Management agreement compliance Benchmark operating performance Budget review/ approval Monitor operating performance Consistent/transparent operational reporting Financial Review Liquidity management Approve and monitor capital expenditures Sales growth in the competitor environment Guest & employee satisfaction Ensure that all information, positive or negative, reaches the ownership Balancing quality and cost objectives Focus on profitability, cash flow and returns on investment Realize the full value of the hotel assets through a continuous process of value creation and enhancement Acquisition - Takeover Hotel opening support Feasibility study Assist with real estate valuation 10-year projection & ROI Centralized accounting Higher flow through & maximize profit Renovation Exit strategy Mixed-use & branded residential sale planning In addition to marketing and central reservation, we provide full management: Onsite responsibility for all aspects of property operations, including staffing, service standards, security, and maintenance. Utilizing time-tested and proven hotel standards. Management support can be long term or during a transitional period. 13
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Company Strengths and Core Competencies GLOBAL ASSET SOLUTION is the leading Hotel Asset Management Company serving Asia Pacific and Middle East. The Asset Management and Advisory division provides a comprehensive range of hotel development, operations, management and strategic planning advisory services specifically tailored to each individual asset's challenges and opportunities - with the overarching goal of maximizing profitability and value. For more information, please visit globalassetsolution.com Unique Experience in Hotel Handovers & Hotel Openings (+10) Leading Edge Concepts combined with in-depth Experience Up-to-date Trends, Ideas & Philosophies Each of our handovers were different and had their challenges; for instance, hotel black listed from tour operators, long list of unpaid suppliers, rebranding, poor relationship with operator, leasing retails in a mall, assisting with the sale of apartments, managing large renovation, or even in country with international embargo. No one in the industry provides as much dedicated support, information, services or value. We tackle "tough" issues, providing clients with the wisdom of experience and clearly defined options for action. Repeatedly we have proven ourselves by getting quick results with minimal expense. We implement actions that will immediately improve sales and cash flow. We standardize our approach to each project and then adapt it on case-to-case basis. Our team is qualified to provide these services because our firm has a unique combination of analytical expertise coupled with actual handson experience. We attend and frequently speak at all major hospitality industry shows. Our consultants are constantly learning and educating on cutting-edge concepts that can make you money. Uncommon honesty and integrity, our experience and reputation speak for itself. We are active member of the Hospitality Asset Manager Association. Mr Alex Sogno co-wrote the second edition of Hotel Asset Management Practice & Principle'. He is also the President of Hospitality Asset Manager Association Asia Pacific. 15
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Pro-forma & Financial System Review Highest Quality Strategic Planning & Asset Management Services Creative fee Structures Global Asset Solution is an Independent Asset Management Company Fast response & Measurable Results Global Asset Solution can help you eliminate crucial and costly errors made in the first years. We can set-up standardized financial models to integrate large portfolio: create financial database (historical, actual, budget), create analytical "switchboard" of the portfolio. These models are applicable for P&Ls, market share analysis, tracking account receivables, flowthrough, FF&E reserve. Our services are custom-designed to meet the particular needs of each client and property that we evaluate. Our Executives have worked on high-profile Initial Public Offerings (IPO) at the London Stock Exchange and the Dubai International Financial Exchange. In each case, the financial reporting and data mining were critically important. Our fee structures are reasonable and often creative and fair to both parties. Tailored to the client's needs, Global Asset Solution fee structures eliminate conflicts of interest. Independent from traditional hotel consulting companies to avoid conflict of interest (e.g. leaking of financial information), and independent from the owner to guaranty complete objectivity and superior competitive results. We direct much of their attention to maximizing current revenue, controlling expenditures, increasing value and sometimes positioning the property for a transaction. Besides the operational know-how, we have extensive experience in the finance and real estate valuation. After all, how do you want to add value if you don't know how to valuate an asset? Repeatedly we have proven ourselves by getting quick results with minimal expense. We implement actions that will immediately improve sales and cash flow. We standardize our approach to each project and then adapt it on a case-to-case basis. 17
Contact Information If you are looking for a hotel management company to assist you with your project get in contact with us today and we will provide you with the information that you are looking for and a full proposal for our services: Mr Alex SOGNO Managing Director Global Asset Solution T +64 21 127 9076 sogno@globalassetsolution.com 61 Club Street, Singapore 069436 415 Hamurana Road, Rotorua 3072, New Zealand www.globalassetsolution.com Mr Sogno is the founder of Global Asset Solution and an industry leader in Hotel Asset Management. He has lectured frequently and published several articles on hotel real estate finance and asset management. Mr Sogno is also the co-writer of the new Hotel Asset Management' textbook published by the Hospitality Asset Managers Association (HAMA), the American Hotel & Lodging Education Institute, and the University of Denver. Mr Sogno is the founder & President of the Hospitality Asset Managers Association Asia Pacific, comprising 56 economies throughout Asia and Oceania. Brief Overview - Mr Sogno began his career in New York City after graduating with honors at Ecole Hôtelière de Lausanne, Switzerland. Mr Sogno established a number of business ventures, initially focusing on hospitality and real estate valuation. He joined HVS International New York, and he established a new venture at the Cushman & Wakefield headquarters in Manhattan. During this period, Mr Sogno supervised major hotel transactions (over 900 hotels), and provided technical support for valuations and financial projections for hospitality facilities throughout the USA, Canada and the Caribbean. In 2005, Mr Sogno began working for Kingdom Hotel Investments (KHI), founded by HRH Prince Al-Walid member of the Saudi Royal family, and was employed to asset manage a large portfolio of luxury full-service hotels in 21 countries in Europe, the Middle East, Africa and Asia. As Vice President of Asset Management, Mr Sogno had diverse responsibilities including: asset management of various hotels including Four Seasons, Fairmont, Raffles, Mövenpick, and Swissotel, valuation of all KHI portfolio, assisting with the Initial Public Offering (IPO) of KHI at the London Stock Exchange and the Dubai International Financial Exchange. As hotel asset management interests increased, it was a logical evolution to open Global Asset Solution in 2007. The acquisition of Hamurana Lodge Boutique Hotel in New Zealand marked the beginning of the operation/management within the group in 2009. The development efforts are focused primarily on five star resorts, although select business oriented boutique hotels with extensive amenities in prime city locations are currently under consideration. From Bali to New Zealand, our brands includes: F&B Hotels F&B Select Services F&B Lifestyle 18