PRINCIPLES OF SELECTION
The investment market of Ukraine in the field of hospitality is developing, no matter how strange this offer may sound in today's realities. For investors and buyers of hotel real estate, much more comfortable conditions have been created than even a couple of years ago. There were hotel operators, management companies that are ready to work with hotels, providing the owner with the opportunity of passive income. There are more frequent cases when finding a hospitality object under the wing of a management company with an unblemished reputation is the main criteria for a successful sale. This material is just about this experience.
Vitaly, owner of the beach complex Richard (Gribovka).
— At the time of the acquisition of the hotel, it was important for me that the object was under the management of the management company. I watched the video of the company's experts, read articles on the corporate blog and all-Ukrainian resources, then called the representatives of the criminal Code. If the management company hadn't been in charge of the hotel's life support up to this point, I would have had to think about how I would handle it myself. The presence of the management company was a strong argument in making this decision. In theory, I could handle the tasks myself, but there are a few key points:
- I live in another city;
- I have a core business where I am operationally engaged;
- I did not want to delve into all the subtleties of the operational component of the hotel. I needed an additional profitable business object.
"Duettes” of entrepreneurs who would like to make a profit from their investments, but not get involved, sacrificing time, effort and priorities, are very common in the business environment. About 93% of the owners of the properties attached to the Ribas Hotels Group network gave the same reasons why they decided to turn to the services of the management company.
STARTED THE SEASON WITH ONE OWNER, AND ENDED WITH ANOTHER
The purchase and sale took place in early August - almost at the peak of the high season. By the way, the change of ownership did not affect the hotel's processes in any way. Most of the staff didn't realize there was a shift. If there were a manual on the painless transition of an object from one owner to another, the top managers and marketers of Ribas Hotels Group would say that the transfer of internal processes was "like a by the textbook ". However, there was no textbook.
— We entered the season with one owner, and finished it with another owner of the same hotel, bringing profit to the new owner of the hotel, - emphasizes the executive director of the management company Andrey Marenchuk.
«SELLING THE HOTEL WITH YOU»
Of course, this transition would not have gone so smoothly if the company's experts had not built all the operational and business processes while working with the first owner. That is why, when the previous owner of the hotel complex Richard left for Australia for permanent residence and opened a new facility there, he told the leaders of the Ribas Hotels Group:
— I'm selling the hotel, but only with you!
The new owner of the property has not yet made a final decision to leave the hotel to the management of Ribas Hotels Group.
Despite this, the company's specialists gave detailed advice, shared the contacts of contractors and left expert advice on the vectors of further work:
- which control points are primary in the management of the hotel complex;
- what to negotiate with the management company and key contractors "on the shore";
- how to check the work of staff, without putting pressure on them with excessive control, etc.
— During the negotiations with the CEO of the company, Artur Lupashko, and representatives of the top management, I got the impression that our views on doing business are similar, — Vitaly shares his impressions from the first meetings with representatives of the Management Company.
EVERY YEAR WE START FROM SCRATCH
If the profit in the first month of cooperation seems to the owners themselves to be a super-success, then for the management company it is only proof that the system works without failures.
For Richard hotel (as well as for other resort facilities of the Ribas Hotels Group), every year at the beginning of the season, the entire structure of the facility is formed from scratch.
By the way, none of the Ukrainian management companies are taking seasonal objects. It is extremely difficult to launch a hotel every year: to assemble a new team, carry out repairs, purchase dishes, decor, update furniture, etc. For Ribas Hotels Group, the start of the season and the launch of resort facilities is a working routine and is included in the usual list called "management company services".
For example, now the company's specialists are launching a new hotel in Bukovel — Ribas Karpaty. This launch is unremarkable as part of the process development, because they are used to opening new facilities every season: analyzing the mistakes of the previous season (if any), making the necessary purchases, updating the number of rooms, etc.
PROFIT IN THE FIRST MONTH AFTER THE PURCHASE
The advantage of working with a management company is also that some business processes can be divided into two objects.
For example, in Gribovka, next to the Richard hotel, there is another hotel complex - the Ensenada. Ribas Hotels Group has established processes so that one manager could look after both of these objects: he created between them one F&B service for restaurants, technical, security and other services.
Thus, we reduced the cost part on one object; we optimized the costs by dividing the operational processes.
This combination gave a several-fold increase for both hotels. And if Ensenada worked as a separate object, a structure like that would be unaffordable. And the Richard structure wouldn't be as efficient. If another hotel in Gribovka was added to the network, it would also be considered as part of the existing structure.
EXCEEDED THE REVENUE PLAN IN 2020.
Here's how it turned out:
- Invested in SEO.
This year, Gribovka, as a resort, well "went" to the Ukrainians. A Google search results in very high results. From the center of Zatoka and its outskirts, vacationers are tired. Meanwhile, Gribovka got into the top 10 best beaches in Ukraine. In this case, it turned out that the company has been promoting Richard and Ensenada as the best hotels in Gribovka for several years. And as soon as Gribovka became the basis of queries, a long SEO promotion worked. That is why Ribas experts recommend: even if your site's SEO does not give tangible results in the first year, it will definitely give it in the future.
SEO worked so effectively that the company's booking specialists had to refuse to tour operators in the settlement due to the high demand. Sales on Booking were suspended in order not to lose on commission, and paid advertising on hotels was completely disabled: RRS, social networks, etc.
- We optimized marketing expenses and increased the time of reception of guests.
Since mid-June, we have worked without advertising. Consequently, we also optimized advertising by almost 50%. We used ads only in the low season to fill hotels until September 13. But in fact, we’ve had guests until September 20.
- We changed the kitchen equipment, revised the menu, and added decor. We received an increase in the revenue part of the restaurant by almost 18% compared to last year.
- We used dynamic prices.
Although most hoteliers were afraid to raise prices this season, Ribas, seeing the demand, raised the cost of the offer and came out on a positive result.
This is a good case when the owner has an idea of what a management company is. When he understands that it makes it much easier to make a profit without the round-the-clock involvement and is confident in the professional team that leads his hotel to profit.