How much would you pay for a boutique hotel manager (%)?

Question

If you had a property, say a multi-family apartment building that you were converting to an all-suite hotel, what % would you pay a property manager?  I've got a deal where they were proposing 13% of revenue to manage the property.  I know airbnb managers take like 25% (which is what theyve done a ton of in the past) and boutique hotel operators take like 5-7% and you can get a marketing firm for another $1500 a month, which is probably another 1% of revenue.  So I'm not sure how to handicap this.  It's a fairly automated business.  You use bookerville, airgms, or liverez and it handles most of the dirty work.  So potentially $130K a year to manage a 10 unit boutique hotel with no day-to-day staff, seems high to me.  They also want a 10 year or until-sale contract to manage the property which seems nutty to me.

Kyle Johnson · Answer

@Anders Jax what does the 13% fee include in regard to services and management?  How are you handling housekeeping and maintenance for the property, as you mention there is no day-to-day staff?  My initial impression is that the 13% is high, but I am not sure what management services are included in that total.

I don't like 10 year agreements, I think that is too long for a small property.  I own a hospitality management company and fall more in line with the 5-7% as you mention (combining my base fee% and incentive%).  I am sure you can negotiate terms that are 5 years or even 3 years.

Nick Rutkowski · Answer

@Anders Jax

I'm interested to find out as well. I hope you find a better manager than what they offered you.