Before you do anything you need to know how the hotel asset performs against its market peers and national norms, and what it will take to make it work better. You need quick, disciplined answers from objective hotel experts who are not part of the current problem. You need HOTEL KNOWLEDGE.  Quorum can provide you with one of the two following evaluations of your hotel.

 

HOTEL REPORT CARD – 4 to 5 Business Days – No Travel Expenses

The key mission here is getting a true picture of the current market performance of the hotel asset. Where does it fit? What problems can be fixed? Using our Quorum database and client data our senior hotel experts and CPA’s will measure the current economic performance of the hotel asset against local and national benchmarks; analyze its market share performance; evaluate brand effectiveness; and, comment on such items as cost control leadership, forecasts, potential brand alternatives, market share, and brand effectiveness.

 

FULL HOTEL ANALYSIS – 1 TO 2 WEEKS  + TRAVEL TO PROPERTY

Quorum was formed in 1987 for the express purpose of managing and advising on hotel assets impacted by the Tax Reform Act of 1986. Companies such as Quorum came into the marketplace in the late 1980's (during the last great real estate crisis) offering owners the ability to re-position underperforming hotels with short to mid-term agency contracts that are subject to termination upon ultimate disposition (sale) of the property.
 
As the USA works its way through the current economic storm, many hotels will gravitate to "underperforming status." The rapid growth in hotel development and opportunity fund driven transactions in the last five years were predicated on continued use of inexpensive leverage and inflationary growth in hotel rates. Neither of these assumptions appears accurate in 2009 and will result in hotel bankruptcies and foreclosures in the next 12-24 months, as developers, owners and investors are replaced by lending institutions.
 
As it was 20 years ago, it is again today – the lending institutions will rightfully anticipate that once a hotel and the overall market right itself that the likely future buyer will be an entity that wants the property free and clear of management and brand so as to have maximum asset flexibility.
 
When a company such as Quorum is engaged, it immediately researches the current brand effectiveness and if necessary, and possible, immediately moves to secure a franchise or reservation service best suited to the property given the current day market dynamics, its physical condition, and the asset strategy of the current owner.  In today's market, both management and franchise agreements are normally subject to termination upon sale.
 
Unlike a major hotel chain, by bringing together the separate components of management and franchise an owner "unbundles" the overhead normally associated with a major chain (i.e., the fees charged for reservation, sales, purchasing, regional oversight, employee benefits and training).  The owner is free to shop for a management company and franchise (or reservation service) with the best cost/value relationship and is free to utilize the market place for the best value in all other major expenditures for goods and services.  Most importantly, the owner can renovate the facility to a level that meets the realities of the current local market (i.e., luxury, first class, moderate, etc.) not a chain's worldwide positioning.
 
Quorum has assisted in more than 40 distressed or REO situations. We offer clients a complete platform of services to assist in hotel recovery efforts, which are backed by a team of talent professionals with more than 200 years of collective hotel knowledge.