“Experience is the teacher of all things.”
While Julius Caesar likely wasn’t describing hotel asset management at the time, his proverb rings especially true in the hospitality industry. In an ever-changing landscape affected by everything from emerging technologies to labor issues, I have found it invaluable to heed the advice of the industry veterans who helped blaze the path before me. As I begin to celebrate my 10th anniversary as a hotel asset manager, I thought it might be helpful to share a few personal learnings for those who are just starting out in asset management or interested in jumping into the field.
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Maximizing value—the mantra
From day one as a new analyst, the mantra that was repeated over and over was to “Maximize asset value.” Starting out, it was easy to define that goal strictly on today’s net operating income (“NOI).” Over the years, working for different types of ownership structures and funds, I would add this nuance: “Confirm the strategy—then maximize asset value.” The investment objective of every group is not the same, and the measure of successfully maximizing the value of their assets will not always be measured strictly in NOI. Brand considerations, portfolio objectives and disposition timelines will all factor into how you structure and define success. If you focus only on NOI, you may not capture the whole picture.
It’s a small world after all
When we speak about the industry, we speak in terms of billions of dollars and millions of room nights. In that context, it can be easy to forget how small the industry really is from a relationship perspective. In my past 10 years, it has been amazing how many times I come across colleagues with or for whom I’ve worked. With this in mind, remember how you treat others and that your work will be remembered. As an asset manager, you represent your company/client in all your interactions with those with whom you work. Doing your best and being professional, even in the most adversarial situations, is critical, as you never know when you may be working with that person again.
People who need people
Tangentially related to the note above, I have learned that as an asset manager, we need our partners (operations, brands, etc.) to be effective. While we engage as asset managers in every part of the hotel business, it is our partners who execute the plans. As such, it’s critical for asset managers to understand the full spectrum of motivations and challenges our partners face as we develop our investment plans. I have found that while it’s easy to say, “because I said so,” I am most effective when my partners have been involved, understand the investment objective and motivation and buy into the plan.
Data, data, data
In this field, data is everything. That being said, you must know how to use it and how it can be manipulated. When I started out, I had a limited background in operations. I made it a point to focus on understanding the numbers and what made things move. I would sit with my revenue manager to understand their forecasting models and pace buildup. I spent hours with controllers on P&Ls and cash flow statements. I also spent time on the ground with the team going through the processes I didn’t understand. By investing the time to understand the data (and asking a lot of questions), I learned to do richer analysis and identify opportunities and problems.
You’ll never know it all
I have had the great opportunity during my tenure to work with a great number of interesting assets and be involved in some very difficult situations. Each one of those experiences has shaped me into a more effective asset manager. However, in this field, you can never stop trying to learn more. A decade ago, social media marketing was barely on anyone’s radar. Now it’s a critical part of every sales and marketing plan. As the industry faces new challenges and encounters new technologies, asset managers should be engaged and curious about the new developments entering the field every day. It’s a key part of why this industry is so much fun!
This is also by no means a comprehensive list, and I expect to learn more myself moving forward in my own career. Some of these discoveries I was lucky enough to have passed down from great mentors, others simply came with time and experience. While a lot of this will seem very basic, 10 years in, I still find myself working to be better at these fundamentals. However, there is a great reward to the work. I get to work in an industry with terrific people doing work that is impactful, fun and challenging.
If you’re interested in learning more about hotel asset management, the Hospitality Asset Managers Association can offer additional resources and information on the field. Please visit the website at hamagroup.org for more information.
Derrick Yee is a vice president at Watermark Capital Partners, responsible for asset management activities. Before joining Watermark, Derrick was responsible for hotel asset management at Istithmar World/Dubai World, managing their multi-billion North American portfolio of luxury and resort assets. Prior to that, Derrick was an asset manager for the Chartres Lodging group where he was responsible for a portfolio of large convention hotel and upper-upscale hotels throughout the U.S. While at Chartres, he oversaw several significant turnarounds, renovations and repositionings. Derrick is a graduate of Georgetown University where he received a BSFS focused in International Relations. He also has a MBA from the Johnson School at Cornell University as well as a Masters in Management of Hospitality (MMH) from the School of Hotel Administration at Cornell University, where he concentrated in Hotel Asset Management and Hotel Real Estate Finance. Derrick is a Certified Hotel Administrator (CHA) and a Board Member of the Hotel Asset Management Association (HAMA).
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