Hotel Management Company based out of San Diego, CA

Stunning Turnaround

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RAR Hospitality (RAR) was asked to take over a deteriorating, oceanfront property that was mismanaged for several years.  Ownership was destitute and considering converting the property into residential units but it was willing to give the property one more chance with Bob Rauch and the RAR team at the helm.

The first task was to convince ownership that the property would need to be shuttered for nearly a month while a wholesale renovation occurred.  Through conducting extensive analysis providing data that would yield positive ROI on the renovation, ownership agreed to take this leap of faith.  RAR managed the entire renovation process including selecting and managing contractors, working with interior designers, and selecting furnishings and finishes that would appeal to guests.

RAR also identified a strong and capable GM who had a comprehensive understanding of the local market and was particularly adept at revenue management.  The GM mapped out his rate strategy with goals that ownership previously believed could not be achieved.  At the same time RAR completed a comprehensive review of all facets of operations including the following areas:

  1. Audit of all books and financial statements
  2. Implementing cash controls
  3. Sales and marketing efforts
  4. Operations policies and procedures
  5. Safety and security policies and procedures

The property re-opened on time and under budget and the changes were immediately evident.  Over the course of the first year of RAR management, the property exceeded its revenue budget by 13 percent and exceeded its Gross Operating Profit budget by 30 percent.  Ownership was so thrilled with the results that the redevelopment plans were abandoned since the property became a source of stable and reliable cash flows.  The second year of management continued the positive momentum with total revenue in January, typically a weak month for the property, exceeding budget by 25 percent.  RAR is excited for the property’s success that will provide ownership with a profitable asset for years to come