Owner’s Representation
Why it pays for an investor, who is very busy or new to hotels and tourism, to hire an experienced Owner’s Representative
What is the difference between an Owner’s Representative and an Asset Manager?
These two titles may be filled by the same person/company. However, Owner’s Representation is commonly more used for the function during the development and construction period and is a full-time job, whereas Asset Management is not full-time, therefore can handle several assets simultaneously. Asset Management refers to the life-span of the asset and its financial viability from the operational opening of the asset until its exit.
During the development phase, external Owner’s representation may be dispensed with, if the owner has his own functional organizational corporate structure and experienced hotel project team who carries out the necessary management tasks for a project. Otherwise, the Owner’s Representative is the only independent and objective consultant without an own agenda.
His concern is to develop the project within schedule and budget on behalf of the owner. In most cases, the owner may be too busy to focus on the project or may not have sufficient knowledge and expertise of the hotel industry.
The position of an owner’s representative requires profound Project Management experience paired with technical expertise, experience as hotel General Manager and in matters of Environmental, Social and Governance (ESG) and interpersonal skills. All these are a necessary combination of executive skills and knowledge required for this position, acquired through years of industry experience in high responsibility positions.
He is in a position to provide invaluable industry insights into the market demand, competitive landscape, pricing dynamics and potential risks, making informed decisions about the projects’ feasibility and positioning. He provides support throughout the development process, navigating challenges, mitigating risks and maximizing the success of your investment. His time horizon in decision making goes far beyond of any other project stakeholder, other than the owners themselves.
Tasks during the development and construction process:
Delegation of authority and decision-making
Depending on the scope of authority given by the owners, he has to bring about or take all necessary decisions promptly regarding concept, features, construction-related specifications, required qualities and design, budget and timelines
Construction process
He takes an active participation role in the planning and design stage, in close collaboration with architects, quantity surveyors and designers from relevant architectural preliminary designs and space programs to practical guidance and monitoring throughout the progress of the construction.
Inspections and supervision
Conduct regular inspections and quality checks and ensure that the hotel construction adheres to industry standards, legal and regulatory requirements such as environmental and building codes as well as other market-related risks thus ensuring that the ongoing project meets the specified set of criteria.
Contracts and conflict resolution
Negotiate with all consultants, contractors or users with contractual binding force for the Owner within his authority. Enforces all necessary provisions and implementation of all contracts with full assignment of duties for the Owner and manages all conflicts of different interests (which could be quality aspect, budget/costs and timelines) between all parties and stakeholders involved in the project. Acts on behalf of, or assists the owner and/or the supervising architect (engineer to negotiate and secure the best agreements for hotel management, material supplies and service providers with all consultants, contractors and other stakeholders).
Communication, coordination and guidance
Focal point of communication for all involved parties, consultants, operator and other stakeholders of the project. He follows the critical path to opening, supervising of all pre-opening services required for start-up, company registration, permits, staff accommodation, hiring and deployment of GM.
Interior fit-out stage
Monitoring the construction and fit-out stage, overseeing the procurement of all furniture, fixtures, equipment (FF&E) and operating supplies (OS&E) at best prices and correct quality.
Development Budget
He monitors the development budget and takes any decisive measure to avoid any deviation. That also includes pre-opening, financing and other development costs.