Historically, it has been a very common practice over the years but no, it’s not a requirement. Over the last thirty years, I’ve seen most hotels get away from it although it still occurs in older properties.
The benefits aren’t worth the perils, unless you own the property yourself and run it as a Mom-and-Pop, and are happy to live there.
The problem with having a manager living on property is that he works from home when he or she is working (and it hasn’t been that many years ago, some companies — including even Motel 6 — would only hire married couples as co-managers); and never quite gets a day off when he or she is off duty. Eventually there is very little structure to the accountability. The manager never does enough or spends enough time in the hotel’s operating areas (as opposed to his or her living room), to hear the owner tell it; nor is there any limit to the amount of work or sacrifice asked of him or her to keep the property running, to hear the manager tell it.
I’ve had live-on-property jobs in my career, and always made a point, on my one day a week off, to get in the car and get the heck out of town. When I lived in Southington, Connecticut, my days off were spent either in Worcester or Framingham, Mass., or New York City; when I lived in Harrisburg, Pa., I became quite attached to the Poconos and Bethlehem; and when I lived in Benson, N. C., I’d end up in Fayetteville, Raleigh or Greenville. At least, get the heck out of the hotel and stay out for the day. For me, that was somewhat of an inconvenience because I’m fundamentally a homebody when I’m not doing serious traveling: I could go a week or two quite happily without ever setting foot away from my house, and I don’t like not being able to be home — or taking a risk of being robbed of my day off from work if I were there.
Few properties are built anymore with an on-premises apartment for the manager, although every hotel broker website will have at least one or two older ones you can buy. Some small, family-owned ventures or partnerships will buy a hotel, knock out two or three adjoining room bays, and retrofit an apartment into it, especially if it’s a larger hotel (the practice over the last 20 years or so has been to build 60 to 80 rooms — which is only half as many rooms as they used to build whenever someone built a new hotel or motel) with a vacancy problem. Some of them might even have some employees living on property as well.
We don’t build them, we’d just as soon not have them, and if we get an older property that has one, we look for ways to knock it out and get rid of it, and make better use of the space. (Unless, of course, one of our Chinese friends or some other EB-5 investor who provided the investment for the hotel has need of an apartment he can claim as his legal residence; in which case we'll gladly and gratefully keep -- or in a new property, even build -- that apartment for him.)
If a manager is entitled to an apartment as part of the compensation package, what happens if you decide at some point that it’s not working out and you have to fire the manager? Not only do you have to manage a termination and change of management, but now you have to manage an action in ejectment to get them to vacate the apartment (which gets all the more dicey if the manager is someone who doesn’t save for a rainy day and cannot afford to rent a new place immediately). You can’t give the apartment to the new manager until you get the old one out. And meanwhile, until the ejectment goes through the courts if that’s what it takes . . . you have a disgruntled former employee living on property.
Or what if he’s a good manager but is a pig who will not keep his quarters clean and the smell gets to be a little much, or has undisciplined children who roam the property freely, or who keeps his TV or stereo cranked to movie-theatre-level volume, or is a social animal who likes to invite a dozen or so people over for a party a couple times a week; and is just not the sort of person that you — or your hotel’s guests — would want as a neighbor?
What happens if you hire a couple to manage your property and live on premises, and they do the job well, but they end up separating and looking ahead to a divorce? (That actually happened some years ago at one property with which I was familiar.) If the manager’s private or family life or personal habits can be a concern, it all needs to occur elsewhere, where it's his personal problem and we don't have to concern ourselves with it.
And that’s before we even go there about all the reasons an on-premises apartment might not work for the manager. (A two-bedroom apartment isn’t adequate for a married couple with five kids, and it’s illegal to discriminate against someone because of family status).
Given an appropriately screened, selected, and well-trained staff, there is generally no operational necessity for a manager to live on premises. So, we try to stay away from it.
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