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Jay Litt is principal of The Litt Group, which is focused on hotel-project
management and consulting. He previously served as executive vice president
at Waramaug Hospitality Asset Management in Boca Raton, Florida, and as
executive vice president of operations for Wyndham International and Interstate
Hotels. Over the past 45 years, Litt has overseen large portfolios involving three- and four-star
hotels and world-class luxury resorts. Reach him at (561) 988-0451 or firstname.lastname@example.org.
Successful marketing basics are among the arrows in a mortgage broker's quiver. They can help lenders and clients get more comfortable in using your services and the projects you present. The hospitality industry has expe- rienced an exceptional seven-year run, replacing lost revenues, profits and
confidence among buyers, sellers and lenders. And during this time, RevPAR — which is
calculated using the number of rooms in a hotel, its average occupancy rate and its average room rate — experienced normal growth to get the industry back on track.
During cycle changes, it’s important to be clear and concise with all offerings and
deals. As tremors grow in a market, lending sources can shrink, making competition
more obvious. In these times, having a strategic marketing plan is critical. The following
marketing basics could be part of the plan that gets you past the finish line.
Set realistic expectations
A deal is not just a deal. As we all know, there are many aspects to a deal. As we enter
a period of greater scrutiny, make sure what you are offering is realistic to both your
client and the lender.
During a market upswing, projects that are more speculative can find an audience.
Now is not that time. The deals you present need to be ones that lenders and clients
feel, from the start, make sense. Do more research and use third-party consultants to
make sure the property dynamics, financial history, property improvement plan (PIP)
and other aspects are covered and easily explained.
You’ll need to work closely with your clients to get this information, and to make sure
it’s concise and correct. Present the basics of the project to others in the industry to
gain additional perspective. Having this direction can help get the deal to the next step.
Lenders are going to be more time sensitive over the next few years. More regulations make for more scrutiny. There will be increased pressure to review more projects
in order to find the ones that make sense, so fewer explanations from a broker are better
and free up a lender’s time. They will want to understand the deal from day one. Easily
understood metrics and transparency are critical components of communication. More
mortgage brokers will be presenting more deals, but to fewer lenders, so providing more
information — and in formats that are easily understood and analyzed — is critical.
Keep the essence simple
We all recognize that even the smallest deal can be complicated. When all the stakeholders get involved with a project, it seems to grow in complexity. That’s not
surprising. But the reality is that there are many moving parts in any real estate transaction, and hotels are probably the epitome of that reality.
As such, the suggestion here is to narrow the essence of the deal and promote that
theme with lenders and clients. In every deal, there is a bottom line. What will the deal
do for the lender? Where is the value? Can you demonstrate, in a simple format, the
basics of the deal? During changes in economic cycles, emotions can run high and
brokers with a simplified format will not only be in high demand, but also should complete more deals.
The use of a clearly written memorandum is more critical than ever for an offer.
The boilerplate, 85-page bible, a style that grows during market upswings, needs to
change. Tighten these documents with the information most needed by the lender
and client. Remember, time is critical to all parties, especially during changing cycles.
If you are working with third-party consultants, make sure what they produce is clear
and easily interpreted for the project you are promoting. Deals are complicated. Make
sure what you are giving the lender, in the offering memo, is what they need to understand the deal. Spell out the deal clearly and use the memo as an essential document
to support your stipulations. You will make your lenders and clients much happier, and
the result could be quicker action.
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