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down to: Why
a management company?
A management company is a team of professionals who work full time operating, marketing and maintaining your property. The management company assumes all the responsibilities for operating the motel, hotel or condominium. You receive the profits from your investment while the management company does all the work. Contract management is especially attractive for: >
Owners who live some distance from their property Until a few years ago, full service contract management was not practical for smaller hotels and motels because management fees did not cover the company's overhead and administrative costs. This is no longer true. Improvements in technology and communications have increased marketing and management efficiency and reduced administrative and operating costs to the point where smaller properties can enjoy the benefits of contract management. In the past, these services were available only to larger independent and franchise properties. Now, these services are available for every motel and hotel, regardless of size. An efficient management company can increase revenues, improve service and lower expenses to the point where higher net income usually exceeds management fees. An owner is relieved of day-to-day responsibilities with no reduction in bottom line profits.
Ocean Property Management Corporation provides seasonal and year-round full service management of hotel and lodging operations. Those services are based on the principal that strong, hands-on management is essential to succeed in the hospitality industry. Ocean Property Management's principals work directly with their on-site managers on a daily basis stressing cleanliness, a friendly and well trained service staff, and strong sales and marketing. Managers receive incentives to increase year-to-year revenue based first on return business from satisfied guests. Operating efficiency is improved by combining direct day-to-day involvement in property operations with centralized sales, accounting, purchasing and administration. Guest services are handled at the property while most back office work is centralized to provide the same economies to smaller hotels, motels and condominium properties under 100 units that were previously available only to larger properties. Advances in communications and back office computerization have significantly reduced administrative costs and increased management efficiencies to the point where contract management is practical even for properties as small as 30-45 units. Experienced on-site managers are selected by the management company, with the owner's approval, to operate the property. The manager's experience and employment contract are matched to the type of property including, when applicable, the needs of smaller hotels and motels where managers are required to live at the property. All managers or other key permanent employees meet State and County requirements for management skills, first aid, and CPR where needed, and the services of a certified pool operator are provided by the management company in New Jersey and other States at no additional cost to the property. Stress is placed on the hiring, training, supervision and retention of all hospitality staff. Inter-property transfers of employees also increase experience levels, lower costs and provides retention incentives not available to single property operators. Opening and closing services, off-season maintenance and security, where appropriate, are provided to seasonal properties as part of the standard year round management contract.
Experienced property owners know that even the best expense controls only increase profits to a certain point. Long term, occupancy levels and average daily rates must increase to improve income.
Ocean Property focuses on guest satisfaction to build repeat and referral business and a strong sales effort to increase transient, contract and group business. Computerized mail lists and guest histories are maintained for each property and used for multiple centralized direct mail and e-mail advertising. Mail and customer lists are protected to assure confidentiality of proprietary information. Depending on the property, these mailings advertise regular guest services, specials, property sponsored or supported event weekends and shoulder season packages. Flyers, package advertising and media pieces are produced camera ready by the management company in-house at no cost other than printing charges to the contracted properties. Aggressive group and individual tour packaging, promotion, and marketing are provided by the management company's centralized sales staff year-round at no cost to the property other than sales agent commissions. Larger properties employ management company trained and supported on–site sales staff when appropriate. The management company also participates in reservation incentive plans and travel agent programs. Additional group sales are generated by Cape Tours, our affiliated tour operator/wholesaler which gives preference to Ocean Property managed properties when booking tour groups. Room rates paid to managed properties by Cape Tours are usually higher than rates from third party tour operators. All properties receive bus and group tour business as receptive operators through this affiliation. A synergy is enjoyed between properties. Multiple destination packages not otherwise available to a motel may be housed at managed properties. Reservations are also referred between managed properties. Reservation services and marketing services are provided year round for seasonal and year-round properties regardless of the property's operating season. An annual marketing and advertising plan is provided for each property. A strict purchase order system is used to control supply and equipment costs. Purchasing of all but incidental items is centralized at the management company's office to monitor consumption quantities ordered. Supply inventories are updated and faxed weekly to the OPM office. Purchase orders are consolidated and orders are placed by a dedicated purchasing manager. Inventories and consumption are monitored by the management company during on-site inspections. Supplies and equipment are purchased at lower cost through centralized buying and negotiated prices based on quantity purchases. Quality and type of supplies purchased are controlled through centralized purchasing. Shipping costs are minimized when possible by ordering and shipping for multiple properties in one shipment. A centralized system improves control of consumable costs at each property. Usage and costs are compared weekly on a year–to–year basis to detect increased consumption and waste. Managers are accountable under management company supervision for usage. Inventory and consumption reports are supplied so managers can effectively control consumption.
Building maintenance and repairs are done primarily by management company employed permanent maintenance staff. The staff is shared between properties to take advantage of specialized skills and minimize costs to the properties. Individual properties are billed for the maintenance staff's wages, wage taxes and benefit costs. The overhead normally incurred to employ maintenance staff is reduced as staff is only paid when there is actually work to be done.
Managers are responsible for supervising daily routine maintenance. The management company monitors maintenance through frequent on-site inspections and develops maintenance plans with the manager and maintenance staff. Larger properties employ a core maintenance staff which is supplemented on an "as needed" basis by the management company's permanent maintenance crew to minimize wages, maintenance and repair costs. Furnishing, fixtures and equipment purchasing is centralized at the management company's office. This controls the cost and quality of capital purchases and reduces cost to the property through bulk purchasing. Individual properties share the cost of FF&E purchases on a pro-rated basis without mark-up by the management company. The management company provides an annual and long term capital plan focusing on improving each property at a minimum cost to owners. Daily and long term administrative services are centralized. Computerized accounting services assure that accurate, timely information is available to properly manage the property.
The management company provides all bookkeeping, administration and payroll services. It also arranges licenses and inspections and monitors compliance with applicable laws and regulations. Managers provide daily and weekly reports of property performance. Reports and deposit records are delivered or faxed daily to the management company. Various check systems are used to compare occupancy and income. All payroll and payroll tax filing services are provided by the management company. Managers complete weekly time sheets. Payrolls and checks are prepared by the management company to assure accuracy and compliance with wage and labor laws. Insurance planning and administration is done by the management company in conjunction with the property's owner. A pro-active safety program is maintained by the management company to minimize workman's compensation and accident claims. Managers follow a reporting system with documentation and photographs for all accidents and claims. The Management Company also maintains policies and provides handbooks to comply with increasing strict laws requiring sexual harassment policies and employee-employer relations. These materials are provided after owner review for all properties with employees under Ocean Property Management supervision but paid by the property. Ocean Property Management materials are provided at properties staffed with Ocean Property employees. A computerized bookkeeping and accounting system provides timely, accurate information on property income and expenses for proper management controls. Consistent with the concept of centralized back office operations, all accounting and payment of bills is centralized at the Management Company's office. Owners receive complete monthly income and expense reports and a detailed annual summary of income and expenses. Accurate accounts receivable and payable records assure income is received and bills are paid in a timely manner to take advantage of vendor's discounts and maximize float. These reports are important management tools not usually available to individual properties on a current basis. With this information, Ocean Property Management Corporation can operate properties much more efficiently. This is particularly important for seasonal businesses when income and expenses are compressed in a short period and there is little time to react and correct problems unless information is available management on a weekly or daily basis. Annual budgets are prepared by the Management Company. Actual income and expenses are prepared and compared weekly with year to date budgets and the previous year's performance. Monthly reports comparing actual performance to this budget are provided to owners to assure the property is performing as planned. Capital reserves are planned annually based on a careful review of each property's annual budget and projected cash flow. This is especially important for seasonal properties or hotels that experience significant seasonal changes in revenue. The three year budget and development plan is also prepared to supplement the annual budget so each property is maintained and developed based on a long range plan. Daily occupancy and income reports are prepared by property managers and supplied to the Management Company. Reservation and rate strategies are reviewed with managers daily. The management company can provide restaurant management when appropriate. Management company principals have experience managing properties with directly managed and leased bars and restaurants. A full range of food and beverage management services are available including operations, purchasing, cost control, hiring, training and supervision of restaurant and bar staff, menu design, development and analysis.
Q. What are the management company's responsibilities under the contract? The management company performs all services normally required to operate the property, including: .
Day to day and long term property operation Q. What are the property owner's responsibilities? All expenses for operations, marketing, payroll, insurance costs, taxes, capital expenses, utility expenses and other direct and indirect property expenses are property costs to operate the property for the owner's account. In most cases, the staff is employed by the property under the control and supervision of the Management Company. Staff wages, wages taxes, benefits, workman's compensation insurance costs, bonuses and other employee expenses are charged directly to the property as a normal cost of operating the property. Q. Does the contract protect owner's proprietary information? All records and proprietary documents are protected. Safeguards for confidentiality of customer lists, client base and financial records are included in the operating contract. Q. How are fees determined and how are they paid? Fees are negotiable, depending upon the property to be managed and services required, usually ranging from 6 to 9 percent of gross revenue. Management fees for hotel and motel operations are paid from property operating accounts. Fees are payable weekly based on the previous week's gross revenue, with full supporting documentation to property owners. Fees for non–rental condominium management are charged separately based on a negotiated rate. Incentive fees, if applicable, are based on gross or net income and payable quarterly. OPM does not charge fees for services that are commonly added by many management companies for purchasing and bookkeeping for hotels, motels or condominium rental programs. An overhead fee may be applicable for services performed for individual condominium owners if those services are not otherwise compensated in the management contract. There is a small per hour administrative fee added to hourly wages for property staff in cases where the staff is actually employed by the management company. That fee compensates the management company for the expense of preparing paychecks and wage tax reports, and invoicing wages back to the property each week. Q. How long are contracts normally written for? Contracts can be negotiated for term from one to three years. There are provisions for early termination of contracts if owners are not satisfied with the management company's services. Q. What is the normal turnover period after a property management contract is signed? Properties can normally be turned over for full management in 30 days from the time an agreement is signed. Turnover can be completed in as little as two weeks if the property is in good condition and records are available and current. In the case of seasonal properties, OPM can be more effective in the first year of operation if turnover begins several months before the start of the operating season. Q. What records will the management company need to begin operating a property? The Management Company will need operating statements for the past two years, the property's occupancy history, mailing list, and records of all current service contracts and advertising contracts. The Management Company will assist in compiling this information if necessary. Additional information regarding staffing, employee history and property specifics will be addressed during contract discussions. The Management Company completes a post-takeover property evaluation conducted within the first thirty days of management. This evaluation forms the basis of business, marketing and capital plans. This plan is reviewed with owners to assure the takeover is completed as efficiently and quickly as possible.
Contact Ocean Property Management Corporation to discuss present or anticipated hospitality management needs. Review detailed information on all aspects of our services and read a specimen contract. Discuss performance with owners served by Ocean Property Management Corporation. More important, get to know the principals who will manage your hotel or motel and tell us how we can improve its operation. Every property is unique. We need to meet and discuss your property's needs. Let us show you how OPMC can help with all facets of your hotel, motel or condominium purchase, operation, lease, sale or refinancing. |
