26th May, 2017
The demands of motel management
The demand from the accommodation industry for managers ebbs and flows: three years ago demand was very strong, then dropped off for a while but there was a resurgence in 2017.
How the industry is performing has a lot to do with this. If business is good, often an owner will look to step back and take more time for themselves without the weight of financial pressures, working as hard as possible to repay loans, etc. If trading drops off then cost-cutting measures are then re-employed and often, going back in to operate the business oneself is at the expense of the manager.
Buying motels with the direct intention of having them operated under management by competent and professional management couples or individuals has increased in recent months with many people enquiring to buying expressly stated their intention.
The ability to own a successful motel business from afar, without having to operate it is available. Professional management is often comprised of a husband and wife team or individual who is experienced in operating motels and who have a genuine interest in improving the trading performance of the motel over and above its current trading.
Sitting at reception and trying to look busy is of no interest to them. In the past, it was the “norm” to enlist anyone who said yes to the question and the owner’s expectation was that this arrangement would work. In many cases, it did not work and it ended up resulting in motel managers in general receiving a bad rap. Managers were often labelled lazy, incompetent and, in some cases, dishonest if the business did not perform as well as it had in the past.
Some of the mistakes of the past are still being made.
The old saying still rings true that “if you pay peanuts you get monkeys”. The manager’s remuneration is dependent on a number of things, including experience, roles, performance, skills, etc. If a manager feels they are being underpaid, it is highly likely that their level of service (in a service industry) to the business and guests will be diminished. This results in a poorer motel operation and damage to the business’ reputation and performance.
How much money do managers make?
Remuneration packages for motel managers are generally determined by the market and the negotiation process between the owner and manager. The type of motel involved and particular work required to be completed by the management team will affect the package offered.
Is the management team required to manage the property, cook, clean, complete the accounts, etc.? This will be different from one motel to the next; depending on the size of the property, whether there is a restaurant onsite, the location of the property, and the requirements of the owner. Is there a food and beveridge allowance built into the package for the management team? Management packages can be fixed salaries or in many cases are a fixed salary plus a bonus system based on the achievement of certain goals, such as reaching a sales income target or profit target for a particular period.
Acquiring more motels means finding a management team.
Many motel owners in recent times have owned and operated a motel for a period and have then decided to acquire another. Obviously one cannot be in two places at once, hence placing one or both of these businesses under management. The owner then takes the role of overseeing both businesses and relief managing as required. One can never take the attitude of set and forget and staying involved in a supervisory role over management is prudent.
The main type of manager is the permanently employed manager or contractor; however, the other type of manager often more highly sought after by moteliers is the relief manager. This is more of a short-term posting to allow the owner time to get away from the business for a short break rather than a more permanent arrangement.
Between a couple of days and a couple of months is usually the relief managers' term and this type of short-term relief management can be very valuable to a business owner. Allowing them to get away and recharge their batteries, clear their heads and come back to work ready to go ahead; thereby avoiding possible burnout.
The motel industry is a service industry, and if a high level of service is not provided, the customer will take their business elsewhere. A common complaint is that some managers will not go the extra mile to look after a customer, such as doing those little extras that make a customer feel looked after and wanting to return.
Are you a first-time motel owner?
First-time motel owners are fewer in the market at present and experienced owner/operators are the most active in seeking out motel business opportunities. Generally, first-time owners will operate the motel themselves and are less likely to put a motel under management, at least until they have a good understanding of how the business and motel industry works.
The result is a higher demand in today’s market for the professional management team.