Chapter 15: How Management Companies Manage Hotels

Not all hotel owners, are hoteliers. This point is further emphasised by Angelo, 2017, p 430 "The growth and prosperity of hotel management companies, and the unique and changing nature of their relationships with hotel owners, underscore the fact that hotels are special kind of real estate. They are very different from office buildings and shopping malls, for example."

Because hotels are such unique business, hotel owners often appoint a hotel management company, a franchise, or both to oversee day-to-day hotel operations. Hotel management companies and franchises are specialists in the management of hotels and their expertise in management, sales and marketing and reservations, can assist the hotel owner in reaping the maximum profits from a successful operation. This does come at a cost, of course.

Some examples of South African hotel management companies include: Premier Hotels, Hospitality Property Fund (HPF), aha Hotels & Lodges, RH Hotels, Sovereign Hotels and Extraordinary. Franchises are discussed in later chapters.

Have a look at the Extraordinary hotel management company website (https://extraordinary.co.za/about-us/(Links to an external site.)) to better understand their offering and for insight into the lodges and hotels they manage.

1. Identify the owners of your property. Are they managing this property or, are they using a hotel management company for day-to-day operations management? Explain your answer and provide relevant examples and evidence to support.