An Oceanview Cottage Suite King Bedroom at Chatham Bars Inn, a luxury resort in Cape Cod managed by Pyramid Global Hospitality. |
THE BETTER JOB WE DO AT CREATING LIFELONG MEMORIES, THE GREATER OUR OPPORTUNITY |
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working to capture more direct bookings through stronger digital marketing, loyalty initiatives and personalized guest communication, said its COO, Kris Kuball.“ The most effective opportunities have been those that improve the guest experience while generating revenue with a healthy flow-through to the bottom line,” he said, citing those pre-arrival upgrades and add-on experiences that, he said, perform particularly well because they provide guests with greater choice and convenience without adding a significant operating expense.“ Ultimately, we are focused not only on generating more revenue, but on generating the right revenue: business that strengthens profitability while enhancing the overall guest experience,” he said.
Owners have always had clear expectations for
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financial performance, so a focus on metrics such as NOI, GOP and EBITDA is not entirely new. What is changing, Kuball argued, is the level of accountability placed on management companies to deliver those results.“ Owners increasingly recognize that top-line growth has limited value if it does not translate into improved profitability and investment returns,” he said. Achieving a stronger bottom line has translated into management agreement structures that reward profitability, where performance measures and incentive compensation are increasingly tied to bottom-line results, with greater emphasis on expense management, profit conversion and achievement of budgeted financial targets.“ Management companies are being evaluated not only on their ability to grow revenue |
and maintain the guest experience, but also on how effectively they convert that revenue into sustainable cash flow and long-term asset value,” Kuball said.
Moving forward, many expect management agreements to involve lower base fees and higher incentive fees once clearly defined performance hurdles are met, which, as Remington’ s Perelmuter pointed out,“ should help align interests and clearly reset performance expectations.”
DIFFERENT COUNTRY, SIMILAR HEADWINDS European operators, it turns out, face the same nettlesome issues as their counterparts in the States, with some distinctions predicated on geography and operating culture.“ Pressures are rising across the P & L,” noted David Hart, CEO of RBH Hospitality
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– PETER KARPINSKI, EVP OF
OPERATIONS, PYRAMID GLOBAL
HOSPITALITY’ S BENCHMARK
RESORTS & HOTELS COLLECTION
Management, a UK-based hotel management company, adding that payroll has long been under pressure since Covid. And while the fixed costs that operators face— from property taxes to insurance— global conflicts, Hart said, are driving up expenses, including utility costs, which continue to run at high levels. Rising inflation has also had a knock-on impact across procurement lines, he added.
United Hospitality Management, with offices in Lisbon and Dubai, manages hotels across Europe and the Middle East. Payroll pressure in the latter is easier to mitigate than in Europe, said UHM Executive Chairman Carlos Leal.“ The one common
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12 hotelsmag. com Oct / Nov 2026 |