In our last blog, we wrote about modern hotel history, and how it plays into the ownership structure of properties today. Now, let’s chat about who owns hotels and how the financial structure of hotels works.

Privately Owned

There’s still myriad hotels owned by individuals or families. In fact, 60% of hotels are owned by small business owners, according to the American Hotel & Lodging Association. These hotels come in two flavors, branded and independent.

Branded hotels are typically franchised properties. That means, the hotel owner pays fees to a specific company, and in return, has the right to call itself a Comfort Inn, or Clarion, to name a couple of brands. In this case, the owner has access to the brand’s reservation system, which delivers a high percentage of customers to the property. A brand also provides other services and educational elements designed to help the small business owner succeed.

Independent hotels are operated on their own, without a big and typically ‘public’ company behind them. (Though this is not necessarily the case at large scale resorts or casinos.) That means, owners of these hotels do not pay fees to a major company. However, they are left on their own to find customers.

Other Owners

When a hotel is publicly owned, that means the ownership structure is through a publicly held company traded on a stock market. Many times, this means a REIT, real estate investment trust. It’s an organization where people buy shares in the company, which then buys real estate. In this case it’s a hotel.

Pension funds, life insurance companies and other groups, such as universities, own hotels too as an investment mechanism. Real estate is a relatively stable investment, making hotels a great place to invest.

In these cases, a management company is typically hired to operate a hotel on a fee basis based on overall hotel income.  A recent trend is for these management companies to make a small investment in the hotel in what’s called sliver equity. It’s a way the big companies can be extra sure the hotel is being run to maximum effect.

The Tech Effect

No matter the ownership structure of the property, respective operations teams are relying more and more on technology to help their properties run efficiently and profitably.

For example, independent hoteliers are more often using technology like cloud based property management systems such as the SkyTouch Hotel OS® to help their hotels to leading booking engines that connect the hotel to guests. The SkyTouch Hotel OS®, for example, leverages the power of two-way channel distribution management via XML connections with Online Travel Agency (OTA), Global Distribution System (GDS) and a customizable (branded) Internet Booking Engine (IBE) from a single cloud-based hotel PMS system. This increases efficiency and reach to many OTA sites, filling an important role for the independent hotelier.

Management companies, meanwhile may rely on a cloud based property management system such as the SkyTouch Hotel OS® to streamline hotel operations. Cloud based functionality translates into stake holders having access to hundreds of property specific financial and operating reports from anywhere in the world if they have an internet connection. Management companies also appreciate for example the speed at which new hires can be trained when using the SkyTouch Hotel OS®, usually in just a few days, because of the intuitive nature of the interface.

The system is also scalable, so if an ownership group has one hotel or 100, they can tap into the power of the PMS through the cloud.

No matter what entity owns or operates a hotel, the common element is the importance of PMS. Intuitive, proven and secure, the SkyTouch Hotel OS® can help hoteliers increase profitability. Learn more now about the power of the cloud with SkyTouch.