The Expanded Role of the General Manager in the Era of Ownership
By Olivier Bottois, Managing Director & COO, The Whiteface Lodge Resort & Spa
With the advent of mixed-use hotel projects - hotel condos, private residence clubs, fractional ownership models - the role of the general manager is evolving. Today, a license in real estate can be every bit as useful as one in hospitality. Yet most of us have been learning by doing.
In the luxury segment, in particular, the level of hotel amenities and service are of utmost importance in the decision to purchase five-star full or fractional ownership property. The hotel product and service are critical to the success of the private residence club. As a result, contemporary general managers play an integral part in both the hotel and real estate, and, in order to prosper in this new era, they must adopt a new skill set.
The five-star hotel general manager once was an innkeeper, greeting and entertaining guests, socializing at various events, and generally providing public relations for the property. Over the past two decades, a significant shift occurred internationally. The role became more focused on business. While serving the guest was still important, it became the general manager's responsibility to ensure that the finest service was delivered profitably. The general manager had to become more involved in marketing and finance, among other areas of the operation.
Today, a growing number of hoteliers are finding that the position has further evolved with the introduction of private residence clubs. At the high end of the fractional ownership market, private residence clubs offer partial or full ownership in a five-star level resort with larger size residences than most fractional properties and the 24-hour services that are unique to luxury hotels and resorts. In this model, the general manager continues to market the hotel but also has real estate as a shared goal. With hotel owners focused on the "big picture" of a quicker return on investment with real estate and lenders monitoring performance closely, a general manager's decisions regarding management and marketing of the overall product are much different than before. This is especially so for independent properties.
The general manager of an independent hotel with an ownership component has three primary roles: (1) innkeeper, (2) sales and marketer, and (3) owner-guest liaison.
Owning a Lifestyle
Increasingly, hotel guests are willing to pay a premium for a fraction or full ownership at a world-class resort. Why? They are buying prestige and lifestyle. The lifestyle offered at private residence clubs such as The Whiteface Lodge centers upon location, amenities and service-a complete luxury experience that is maintenance-free. The general manager develops and maintains this lifestyle for guests, prospective buyers, and homeowners.
In these situations, the general manager's responsibilities have increased in scope. With millions of dollars in real estate sales at stake, they are directly linked to the level of service and recognition that the resort uses to generate buyers. For independent properties, s/he typically oversees affiliation with a luxury brand (i.e., Leading Hotels of the World, Preferred Hotel Group) and works to generate accolades to give the resort credibility and prestige-with the ultimate goals of driving real estate sales at a higher price.
Becoming a Marketing Maven
General Managers of high-end hotels with private residence clubs have to understand and embrace the role of real estate in the luxury hotel model, as real estate enables the resort to be debt-free within a short period of time. This is significant matter, given today's interest rates. While hotel operations must show a profit, the level of success and speed of real estate sales allows ownership to more easily obtain financing for future projects. If he is able to effectively assist in the growth of ownership, the general manager will have successfully done his or her job. Moreover, real estate sales generate owners' fees to assist with operational costs, allowing the hotel to run even more profitably.
The new general manager markets not only the hotel but also the real estate and therefore, s/he should have a clear understanding of the property's positioning from the very beginning. For example, a resort and private residence club might consider two Web sites-one dedicated to real estate and one dedicated to the hotel. They have the same demographics but address the consumer at two different stages of the process.
Real estate networking is critical, so the general manager's day-to-day responsibilities now include hosting receptions for brokers and entertaining buyers. The person in this position should also work intimately with public relations and advertising firms (working with agencies that have experience in hotel real estate is preferable). For independent hotels without a brand and with limited corporate support, s/he should be involved to ensure consistency, which only furthers the project's legitimacy.
Liaison with Homeowners
As general manager of a luxury resort with a private residence club, I serve two roles for homeowners. The first is as the hotel operator for items like rental agreements or space-available programs offered by the resort management to residence owners on an individual basis. In this capacity, I provide continual information about the resort's activities, construction, and enhancements.
However, I also act as the president of the homeowner's association (HOA), so I may address any topics related to the offering plan and its meaning. Involvement with the HOA includes managing relationships with hundreds of owners on a daily basis-from hosting one-on-one informal coffee gatherings with residence owners to responding to the owners' Web site on topics related to the resort, the sponsor, the management company, future developments, or the HOA. Part of this role is gathering residence owners together, creating a community of people who will, over time, develop friendships and refer future real estate leads to our broker. At our weekly coffee gatherings, my primary goal is to ensure owners are informed; however, it is also a way for them to network with one another and part of my role is to promote this network.
It's also my responsibility to review the expenses of the resort with the homeowner's association on a monthly basis, as occupancy levels affect the costs of running the resort. Many owners make emotional purchases of condominium/second-home models with little understanding of the offering plan, and often, the education of the new owner starts after they have already purchased the property. It is best that the real estate broker explains the plan with clarity at the time of sale, along with the assistance of the hotel operator, who is responsible for providing the luxury resort lifestyle and service experience.
Much of this education involves branding and finance. While Four Seasons and Ritz Carlton have clear, formalized standards as major hotel companies, independent properties should educate their owners that organizations like Leading Hotels of the World are more than member/marketing organizations-they set brand standards for the resort. We need to clearly communicate benchmarks and position the resort appropriately not only with hotel guests but also with owners. After all, owners assume many of the operational costs of the resort and want to understand how and why their money is being spent. Part of this process is educating the owners that they are buying into a luxury hotel, not a typical condominium, and that with a luxury hotel comes amenities like turn-down service and 24-hour valet parking. If these services were removed, the real value would drop in proportion to its status as a highly reputable hotel. These are straightforward concepts; however, GMs must impart them repeatedly and conscientiously in order to make efficient progress on the hotel/resort level.
While it is true that the general manager's role has changed radically over the past 30 years, this new role is really an amalgam of old and new. In today's luxury hotel and private residence club, this person plays the innkeeper role, as homeowners have brought about the need for the traditional innkeeper to maintain personal relationships for the property. The new general manager also has to handle a more complex business model, so all operations, from finance to marketing, require different knowledge and management. Now, too, this person serves as a real estate professional because the entire project thrives on this knowledge and sensibility.
Entering the industry with the mindset of a traditional hotelier, one focused solely on managing the hotel, no longer makes sense with the advent of new, more productive models. We must embrace and excel at all of these elements if we are to be successful in the new role of today's luxury properties' general manager.
Olivier Bottois is the managing director and chief operating officer of The Whiteface Lodge Resort and Spa in Lake Placid, New York. The Whiteface Lodge is the first private residence club and fractional luxury resort in the Northeast region and the only Leading Hotel of the World in upstate New York. Bottois has 25 years of experience at exclusive hotels and resorts, such as The Connaught in London, Hotel Ritz in Paris, The French Presidential Palace in Paris, and The Peninsula New York plus 10 years in various management positions with Four Seasons Hotels and Resorts. Mr. Bottois can be contacted at 518-523-0520 or firstname.lastname@example.org Extended Bio...
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