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March 9, 2022
  • First Nation Partnerships

What Should a First Nation Investor Consider When Choosing a Hotel Partner?

What factors should guide your decision when choosing a hotel brand to partner with?

Solid fundamentals. A reputable brand. Strong performance (e.g. average daily rates, average room rates, revenue per available room). Construction efficiency. And all of the usual factors that guide success in the hotel sector.

Choosing a hotel isn’t just about the name on the side of the building. So much hinges on the hotel management partner behind that name.

For First Nations investing in a hotel, the management partner’s experience and reputation working with Indigenous investors, and ability to provide support and guidance at every stage are instrumental to your immediate and long-term success.

1. Proven experience working with First Nation partners

By partnering with a hotel brand/ management partner that has a proven track record collaborating with First Nations on previous projects, you’ll be able to hit the ground running.

An experienced partner will be familiar with the often complex and multilayered relationships that can be involved. Ideally, they have worked on projects that reflect your decision-making structure: whether it rests primarily with the Chief and Council, a professional management team retained by the Nation, or a strategic partnership between multiple bands.

It is equally important that your hotel partner has the understanding and expertise to help you achieve the Nation’s long-term economic and diversification goals. They should also understand the role a hotel plays in the community’s identity, aspirations and pride of ownership… and work with you to achieve your goals.

Finally, they should be proactive in finding ways to integrate aspects of your Nation’s culture, history and heritage into their design.

2. Feedback from current First Nation clients

Speak with other First Nation hotel owners to learn their experiences with their hotel brand and its management team.

Find out what hotel brands the Nation spoke with and what guided their decision. Ask about the relationship. Has it been positive and productive, or have there been bumps in the road? Has the hotel been supportive, proactive and hands-on, or were they passive and unengaged?

Also, find out to what extent the brand’s management partner has been involved (e.g. construction management, hotel management, asset management) and how they performed in each area.

3. Full-service management & operations support

For the majority of First Nations, a new hotel build represents their first introduction to the complex world of hotel management and operations. It can be a very lucrative business opportunity. Yet, there is a significantly increased risk for those new to the sector.

Choosing a hotel management partner that can provide hands-on management and logistical support every step of the way will increase the chances of success. Find out if your hotel partner can offer a full turnkey solution, or professionally manage all or some of the following services on your behalf:

Hotel Management: Unless you’re an experienced hotelier, it is strongly advised that you contract this service to an outside professional. They bring expertise to the daily operations of the hotel property. This includes reservations and bookings, staffing, setting room rates, accounting, sales & marketing, promotions and more. They also ensure the property is managed according to the brand’s rigorous requirements for quality assurance.

Asset Management: This involves the maintenance and upkeep of the hotel property, such as repairs, renovations, landscaping, snow removal, etc. In many cases, the hotel management representative can manage these duties on your behalf to take the worry off of your plate.

Construction Management: Many hotel partners can manage construction. They can hire contractors, manage procurement and set budgets and work back schedules. Their experience and expertise will help keep the project on time and on budget while maintaining quality control.

4. A commitment to your success

When deciding on a partner for your First Nation-owned hotel property, consider this:

You will get more engagement and hands-on support from a brand partner that is fully involved in construction and ongoing management – than one simply waiting to collect revenue through a royalty arrangement.

An engaged hotel partner will be extremely detailed when it comes to assessing the commercial viability of your proposed site, and will be frank in terms of evaluating its potential for success. They are there to help ensure you are set up to succeed from the outset and long into the future. Companies merely interested in royalties simply aren’t as invested.

Do your research

The success of your hotel venture starts by choosing the right hotel partner. Take a good hard look at the numbers. Carefully weigh their understanding of First Nation development. Assess their experience and successes working with other Indigenous-led developments.

As we mentioned, speak with other Nations who have developed hotels. Attending conferences such as NABOC and the National Indigenous Tourism Conference provides a great opportunity to network with other Nations in the hotel business, and to meet with hotel representatives in one place.

With the right partner, you can look forward to a bright future.

Considering a hotel for your development property

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