As you can imagine, when we decided to launch Denton Hospitality there was a lot of discussion about what the company would do and how we would do it. In the end, we identified three separate but related lines of business. First and foremost, we knew we wanted a hotel management company. Considering the state of the economy and our strengths we identified distressed properties as our target market and we started networking.
On November 25th, less than 60 days after launching the company, we took over management of a hotel on the Eastern Shore that was in foreclosure (less than two years after it opened). In that period of time we had finalized our business strategy, developed a corporate website and brochure, documented operating procedures and written an employee manual. Thankfully, we were well prepared on the takeover date and everything went as well as (if not better than) could be expected.
The point of this posting is to (somewhat sarcastically) offer a few pointers to owners/operators of distressed hotels in hopes that it might help you avoid foreclosure:
- use an employee schedule and time clock to manage your labor expenses
- implement secure cash handling procedures to protect your cash income
- get a decent website - more than 50% of travelers book hotel rooms online
- make sure your hotel is in the Global Distribution System; there are 600,000 +/- travel agents who use that system to book rooms, and thousands of travel websites that use the same to populate their databases
- list your property on the state tourism website (in Virginia it's Virginia.org)
For hotel owners, investors and operators that have distressed assets, the best advice I can offer is this: don't be hesitant to ask for help. Whether through management services or consulting services, there are firms (like ours) available to help you improve your results.
