This Hotel Asset Manager Wants the Industry to Rethink How Hotels Run
Skift Take
Michelle Russo knows hotel operations inside and out. She has some changes she'd like the sector to make.
Early Check-In
Editor’s Note: Skift Senior Hospitality Editor Sean O’Neill brings readers exclusive reporting and insights into hotel deals and development, and how those trends are making an impact across the travel industry.Michelle Russo has a broad perspective on the hotel sector from her position as CEO and founder of HotelAVE (Asset Value Enhancement), a hotel real estate asset manager and advisor.
HotelAVE's asset management portfolio comprises over $7.5 billion and more than 30 hotel operators across the Americas. In 2021, HotelAVE touched one out of every three North American hotel deals above $25 million. Her team offers a mix of services, but a key one is right-sizing a hotel's operating costs. It also coaches operators on how to boost top-line revenue and profit margins. It often helps approve budgets and contracts that are, say, above $100,000. Her portfolio ranges from lifestyle and luxury hotels to limited-service ones and big-box convention hotels — with a concentration in Sunbelt and resort destinations. "Our industry isn't super sophisticated," Russo said. "But I think we've done a good job of improving reporting, benchmarking performance, and understanding how to use data and analytics at our properties."Luxury hotels need to rethink their offerings, in Russo's view.
"In luxury, we need to look at the business model differently — analyzing it in a way driven by asking what consumers really want," Russo said. She wants to see more experimentation. "Let's test and remove something and see what kind of feedback it gets to find out the value proposition," she said. "I wish I was seeing that more across the board." "We do A/B testing all the time on revenue strategies, so why don't we do it on brand standards?" Russo gave the example of turn-down service at hotels. She said that at one of her luxury hotels in New York, turn-down costs more than $1,000,000 a year to execute. "In an ur