Why asset management demands a third party on the sidelines
As the hospitality industry ushers in a predictable era of decelerating revenue streams, increasing net operating income (NOI) is the only surefire way to fight a flatlining RevPAR and enhance asset values. But the harsh reality is that there are hidden expenses within all property management operating costs that can be reduced if organizations could only put the right people on the sidelines.
Well-run businesses are susceptible to a litany of unnecessary costs resulting from factors like over service, local and regional expenses not covered by GPOs, and poor pricing relative to what's available in the market.
Organizations often view negotiated discounts and GPO pricing as one and the same. That can be a dangerous mistake. Plenty of good companies take their eye off the ball, assuming that everything they need is covered under their GPO. But understanding what isn't covered by a GPO is just as important as knowing what is. On top of that, it's imperative that companies carefully audit vendors to ensure that they are being billed according to GPO pricing. If no one is reviewing each invoice, in detail, for billing accuracy, then leakage is inevitable. And it can be costly. In the vast majority of cases, vendors aren't trying to make mistakes - they just happen. If you're not aware of where to look, you're setting yourself up for failure.
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