Being a successful hotel broker takes more than getting a license and throwing some property photos up on a website. According to those who have made a career out of buying and selling hotels on behalf of clients, there’s no substitute for knowledge and experience.
The definition of success varies, but according to Julian Mazili, president of Tampa, Fla.-based Mazili Hotel Group, it’s happy clients. “A successful hotel broker is someone who has achieved success through satisfaction of clients,” he said. “When you sell a property to a client and they are happy with it over the long term [in terms of] the operations and the appreciation of the asset, it shows that you have knowledge and expertise in finding the right asset for the client.”
Ed James, principal with Mumford Co. in Atlanta, agreed that success depends on the outcome for the seller, if that is the entity he is representing.
“A hotel broker is successful when he creates value for an owner by taking a property to market and producing a transaction that meets or hopefully exceeds the seller’s objectives,” he said. “Successful hotel brokerage efforts can take many forms and it may not always be as simple as finding the highest price for the asset. Broker and seller should both be very clear on what is the most desired outcome and what is the needed time frame for that outcome.”
A hotel broker’s number-one weapon is knowledge, according to Robert Eaton, founder of Eaton Hotel Investments, which is based in San Francisco. That requirement goes beyond understanding real estate to understanding how a hotel operates.
“To be successful, you have to not only understand what real estate is, how real estate changes hands and what real estate investment is all about, you need to understand the business that goes on in that real estate that’s known as a hotel,” he said. Hotel brokers require a complicated skill set compared with many other careers, said Mike Cahill, CEO and founder of Hospitality Real Estate Counselors, which is based in Greenwood Village, Colo.
“The best brokers typically have a college education in hotel management and actual hotel operating experience,” he said. “That enables them to fundamentally understand the business and they can portray that to buyers effectively on behalf of a seller.”
Plays well with others
Relationships are another key signal of a successful broker—relationships with the industry at large, as well as with clients. Because buying or selling a hotel is a time-consuming process, it’s important that hoteliers pick a broker with whom they can get along for a number of months, and who has all the professional attributes, according to Cahill. “It’s almost like an engagement with a broker because the person you engage, you’re talking to them every day and having weekly meetings,” he said. “In the big picture, it needs to be someone you like, but someone you like who you know can do a good job for you.”
As with any business or provider, bad brokers exist. But there are red flags that hoteliers can be on the lookout for when preparing to buy or sell a hotel.
“If your broker stops communicating regularly or is hard to reach, it may mean that they are no longer actively engaged in trying to sell your listing,” James said. “Some brokers will take a listing just to sit on it in hopes that someone will come along and buy it. Those ‘efforts’ are rarely successful, as most transactions today come about through hard work and dedication to the project.”
Another red flag is a broker whose only concern is making the sale, according to Mazili.
“Instead of trying to explain the facts to you and help you underwrite the financials and make the right decision about the property, they’re just trying to make the sale for the commission,” he said. “You don’t want to go with someone who is just a salesperson.”