Managing the owner-operator divide

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RAMDAN: Misunderstandings are common in the industry.

More education is required for hotel operators and owners in a bid to improve the efficiency of the industry and prevent potentially costly misunderstandings.

That's the message from Roya International managing director Ahmed Ramdan, whose hospitality consultancy company - which is celebrating its 10th anniversary - often acts as an intermediary for both sides of the industry.

According to Ramdan, many of the issues have arisen because of the subtle power shifts in the industry.

"If you look at the 1970s and 1980s hotel operators used to drive the terms and conditions in the quality of the product," he said.

"This changed slightly when the market became more mature, and the details began to be dictated by owners. In the last four years, because there are so many hotels and so few operators, the owners are all going to the same operators, who are now changing their attitude - they expect a higher standard, and that something looks nicer and with better land.

"Sometimes I see these expectations are unfair, because it will not translate into additional returns [for the owners]."

However owners often had unrealistic expectations as well, Ramdan added.

"The majority of issues are caused by owners not understand how a hotel works, because for them it is an investment," he said.

"Obviously there are some who have one or two hotels who quickly learn - they don't learn during the design, but they learn three or four years after it opens."

Ramdan said a key factor in the gap between owner and operator expectations was the sheer size and rapid growth rate of the industry, creating more work for both parties.

"Fifteen years ago many international hotel operators had little Middle East experience, but since then they have grown and grown," he explained.

"[Owners] had a better relationship with corporate office than now - if there was a small problem [the operator] would come over to sort it out earlier, but now the problem may go on further.

"Right now, I have a feeling they are not putting in that effort because they are too busy," Ramdan said, adding that the lack of personal touch by some operators was driving the increase in smaller regional management companies and independent hotels.

"Sooner or later, the [large international] operators will have to come around to meet the competition," Ramdan predicted.

"Right now there are some brilliant small operating companies around the world."

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