Dimond Hotel Consulting Group

Advisory and actionable consulting services to leading hotel companies, independent hotels, lending institutions, trustees, law firms and municipalities.

 

A SPECIAL MESSAGE TO LENDERS CONSIDERING APPOINTING A HOTEL RECEIVER

A HOTEL IS UNLIKE ANY OTHER COMMERCIAL REAL ESTATE INVESTMENT.

IT’S MORE DIFFICULT TO PRESERVE A HOTEL’S VALUE, THE PRIMARY ROLE OF A RECEIVER.

Hotels are 24/7 service facilities with many facets of operation. The service aspect, coupled with liability issues associated with human resource, physical neglect, as well as food and alcohol service make it absolutely necessary that a receiver with hotel experience be appointed.

The appointment of an attorney or CPA unfamiliar with the complexities of hotel operations could be problematical.

STEP ONE

DETERMINE THE HOTELS POSITIONING AND SITUATION

In cases where a hotel’s financial problems are related primarily to market conditions a lender may be well advised to allow the current operator to continue following the determination that the best interests of the lender are being accommodated.

Conversely, if the root cause is related to current management, a receiver could eliminate the borrower’s control and make management and other necessary changes to enhance the profitability and value of the hotel asset.

QUESTION ONE – AS A LENDER ARE YOU QUALIFIED TO MAKE  SUCH A CRITICAL DECISION?

Drew Dimond can assist you in making these essential determinations. His experience and client list includes developing, owning, and operating hotels in all segments of the industry. His full time consulting practice has exposed him to an array of engagements in the hospitality industry including clients in the decision making process of vetting and selecting a management company.

STEP TWO

WHERE APPLICABLE, SELECT A WELL-MATCHED  MANAGEMENT COMPANY AS A RECEIVER.

 Capable hotel management companies have historically served lenders during previous major downturns in the hotel industry

HOWEVER, THE MANAGEMENT COMPANY LANDSCAPE HAS CHANGED ALMOST OVERNIGHT

In March of this year and almost overnight, a majority of these management companies were forced to lay off critical  personnel as their fees were wiped out due to the effect of the pandemic on the revenues of their managed hotels. Larger management companies with the resources to weather the current Black Swan have absorbed  many of those smaller management companies, reducing the inventory of previously qualified and available  management companies by half.

AN INDEPENDENT CONSULTANT  WITH NO AGENDA MAY BE IN A BETTER POSITION TO HELP A LENDER CHOOSE ITS RECEIVER AND MAKE OTHER CRITICAL DECISIONS.

Drew uses his best efforts in assisting clients to make an informed decision when choosing the correct fit regarding the available management companies  capable of operating a particular asset during this critical period.He has worked closely with brands, management companies, attorneys, lenders, and asset managers in a variety of advisory services. He understands the critical issues facing the courts, lenders, attorneys, and owners. 

 

615-974-7349