Hotel Development: What hands-on hospitality experience brings to investment decisions

On the French Riviera, I see hotel projects multiplying. But does the experience of those who  know hospitality from the inside carry enough weight in investors’ decisions? 

These projects bring together expertise in finance, real estate, architecture and asset  management. All are essential. But they do not replace the expertise of professionals who  have worked in hotel operations, developed strategies, led teams and been accountable for  results. 

Some investors and asset managers have this experience themselves. Others bring in  professionals who do. The problem arises when that expertise is sought too late to influence  decisions. Or when it is never sought at all. 

A hotel is an investment whose performance depends on how it operates every day. Decisions  made during development determine the conditions in which teams will serve guests, generate  revenue and control costs. 

A hotelier’s perspective is needed when defining the project: which guests do we want to  attract, what experience do we want to offer, and with which services? These choices should  guide the design and the resources allocated. Luxury positioning cannot be reduced to a price  point or interior design. 

Designing a hotel that can operate effectively 

Looking at a floor plan, a hotelier sees staff routes, service constraints and the spaces that  operations will need but may lack. 

Reducing housekeeping storage to add another guestroom may seem like a worthwhile trade off. But where will linen, equipment and supplies be stored? How much extra movement will  this create, and what will that mean for service? 

The same reasoning applies to circulation routes, deliveries, lifts and the connections between  spaces. It also applies to offices for support functions: sales, human resources and  accounting. 

At a five-star hotel where I worked in Switzerland, a lack of space meant that the sales offices  had been moved to premises twenty minutes away by car, while HR and Finance remained at  the hotel. It made no sense. A substantial part of the sales team’s work involves welcoming  clients, showing them the hotel and preparing their events with the operational teams. Office  locations must reflect these responsibilities. 

Interior design deserves the same attention. Do we give enough thought to housekeeping and  maintenance when choosing pale beige carpeting for suites? To guest dissatisfaction when  sound insulation between rooms, through connecting doors or from corridors is inadequate?

A constraint overlooked during design, or a later decision made without understanding  operations, can become a daily difficulty. 

An experienced hotelier knows how a working day unfolds: departures and arrivals, room  cleaning, breakfast, room service and unexpected requests. They give architects and  investors a practical understanding of how the building will be used. They can anticipate  service difficulties and sources of dissatisfaction before guests report them. 

Connecting budgets to operational realities 

A staffing budget puts a figure on an expense. Hospitality experience helps establish what  level of service and what organisation that budget can actually support. 

Shift patterns, days off, absences and peaks in activity must all be covered. A hotel promising  highly personalised attention must provide the people needed to deliver it. 

Inadequate staffing and organisation can undermine the guest experience and exhaust teams.  The intended savings can then have consequences far beyond the budget line concerned. 

Behind an average room rate and an occupancy forecast, a hotelier sees guests to win over,  distribution channels to activate and the time needed to establish and strengthen commercial  relationships. 

A new hotel does not automatically secure its place in the market because it is beautiful, well  located or associated with a prestigious brand. In a highly competitive market, it must build  awareness, develop commercial relationships, choose its distribution channels and establish  its reputation. Digital marketing must be integrated into this strategy from the pre-opening  stage, with appropriate resources and expertise. The ability to reach the right guests,  differentiate the hotel and turn interest into bookings can make all the difference. 

The project must also account for how the hotel will operate outside the high season, which  guests it will attract and what level of business it can expect. Revenue assumptions must be  linked to a commercial strategy and the resources needed to implement it. 

Making the different areas of expertise work together 

A few years ago, as Director of Sales and Marketing at a luxury hotel in Geneva, I received  different, sometimes contradictory instructions from the General Manager, the management  company, the asset manager and the brand with which the hotel was affiliated. 

Meanwhile, planned renovations were repeatedly postponed, without clear communication to  the teams. I had to adapt what I told clients to decisions beyond my control and an uncertain  timetable.

The hotel had multiple layers of management. What was missing was a shared vision, clear  responsibilities and consideration of what decisions meant for the people expected to carry  them out. 

This was an operating hotel. But the experience also sheds light on development: when roles  and decision-making remain unclear during the project, teams inherit that uncertainty at  opening. 

Finance, real estate, asset management and hospitality are different professions. Their  expertise must complement each other, and their assumptions must be tested against each  other early enough. 

Bringing a hotelier into a project is not enough if their role is limited to implementing decisions  already made. Their experience must be able to change a design choice, a budget assumption  or a timetable. 

This perspective connects a decision to its consequences for guests, teams, revenue and  costs, allowing adjustments while they are still possible. 

For owners, the challenge is to bring together the expertise that will turn their ambition into  reality and give those professionals the means to work together. 

After opening, what has not been anticipated becomes a problem to manage and a cost to  absorb.