Whether for yourself or a third party, the objective of asset management remains the same: to drive the best possible value out of each asset.
“When it comes to asset management, people get really excited about the investment or the capex, excited about repurposing a space and also about the exit,” explains Paul Harnedy, executive vice president at Cedar Capital Partners, an investor into the hospitality sector which completed a €400m portfolio recapitalisation earlier this year. The important bit, he says – but that which most people don’t get overly excited about – is the day-to-day asset trading.
Aligning objectives key
For successful day-to-day trading, he stresses the importance of the brand, operator and owner all being aligned on objectives. “The key is having a clear view on how you’re going to drive the performance by working with the brand and operator,” he says.
And that doesn’t just mean focusing on cost-cutting. “Asset management sometimes spends too much time on cost,” he suggests. “We spend a lot of time, quite rightly, analysing cost and how we take more cost out of the business. But I prefer, and we prefer at Cedar Capital, to work with our partners, focused on driving the best possible top line.”
Ben Godon, head of hospitality asset management at Colliers, agrees. “Fundamentally, we’re going to get nowhere if we’re driving the cost and the pennies down,” he says. “It’s all about, how do you optimise revenue performance?”
Some investors argue that a long-term view of asset management is crucial to getting the most out of an asset, even if your company is only going to hold a hotel for a short period of time.
Relationship-building
Aligning objectives is one part of the all-important relationship-building. “Establishing the relationship at multiple layers within the brand and within the third-party operators is essential. You’ve got to have contact and relationship at every level so that you can escalate and challenge at the required level,” says Harnedy.
This comes with regular interaction – formal monthly or quarterly engagement, or even more frequently in some cases. Harnedy says Cedar Capital purposely has “very strong relationships” with its general managers (GMs), for example. “We probably engage with the leaders of each of our businesses on a minimum biweekly if not weekly basis, just for updates on where we’re at,” he says.
Good general managers ‘fundamental’ for delivery
Both Harnedy and Godon agree that general managers are of vital importance. “The quality of the general manager is absolutely fundamental in delivering the business plan,” says Godon, although good general managers are “increasingly hard to find”, he says.
And retention is just as important. “What we don’t want in a branded hotel is a good GM being pulled out of the operation too soon,” he says. “Holding onto good people for the longevity of delivering the business plan, the continuity is really fundamental.”
Harnedy agrees that the priority should be recruiting the best and the right fit for the business, because “it is the person leading that business at site that is going to make the difference”.
Benchmarking and accountability
As well as building relationships, data is also important, suggests Harnedy. “We can only hold the operators and brands accountable if we’re able to compare them against something, so internal benchmarking is really important,” he says.
“We have multiple assets that sit with the same brand or operator, so benchmarking them against themselves, benchmarking all our assets against each other, and then utilising the data that’s out there through the providers in the market. You can only put a credible challenge to the brand or operator if you can back it up with the data, so 100% we need the benchmarking in order to challenge.”
He stresses the importance of holding brands accountable: “They’ve set out some numbers, we’ve bought into those numbers, built our business plan around those numbers, raised debt against those numbers,” he says.
“You go through a brand selection process for a reason. They provide a set of numbers for a reason. And holding them accountable to those numbers, bearing in mind we all accept market shift and the world changes... it goes back to that alignment.”
All those quoted in this article appeared on stage at IHIF EMEA, held in Berlin, Germany, between 31 March – 2 April 2025, in a session called: Two views on asset management: in-house or outsourced – defining strategic impact