Here’s a scenario that is not unique
Advertisements
- An internationally branded hotel is in trouble because of the Coronavirus
- It is on a site owned by its Local Authority, to which it pays a ground rent
- It is in a property owned by a pension fund to which the Owner pays a building rent
- It has furniture and equipment paid for on a finance lease from a finance company, as a cost to the Owner
- The hotel has an operating overdraft from a local bank
- The Owner is a franchisee of the international brand, paying royalties to the brand. The brand has no local presence
- The hotel operation is managed by a third party management company that is paid a fee by the Owner
- The Owner has employed an Asset Manager to oversee their investment
- The General Manager is on the payroll of the management company, who charge the cost the hotel
- The other core management and operational staff are on the payroll of the Owner
- Certain departments are staffed by sub-contracting to third party service companies, and by zero-hour or temporary staff
- The Owner is a foreign investor who never visits the operation of has any direct contact with the management or staff
With such a tangled web, it’s a big challenge to all involved to make timely and practical decisions that are relevant to dealing with staff, guests, suppliers, financial sources and others in a situation such as the one we are experiencing now.
Howard Field
Financial management career within the hospitality industry. Unit, divisional and corporate level experience, and as independent advisor to owners and investors. Actively involved in educational and professional associations and sector charities. Specialist in the Uniform System of Accounts for the Lodging Industry.
