Ashler Hospitality Corporation

Ashler was engaged for a two-year assignment to stabilize and better position a limited-service strata hotel in the BC Interior. After an assessment of the staff, we replaced the on-site general manager with a marketing-oriented individual and undertook preparation of a detailed marketing plan for the property. We also introduced numerous operational changes to the property and, to improve front desk and housekeeping efficiency; a staff training program was introduced.

Despite being a relatively new hotel, the property also faced several maintenance challenges, especially with the HVAC systems and swimming pool, which were the cause of frequent problems, expense and repeated guest complaints.

The primary causes for these problems were identified and a program of corrective measures introduced to fully and completely resolve these issues. One fundamental change also resulted in a substantial decline to utility costs associated with heating the large pool.By the end of 18 months, the net operating income for the property had been increased to a level of 44% of hotel revenue; i.e., for each $1.00 of hotel revenue, 44¢ was distributed to the owners.

Following our first year managing a hotel in the Okanagan, Ashler recognized that a free-standing convention facility adjacent to the main building had not generated adequate revenue. Ashler therefore undertook a detailed analysis of the 10,000 square foot building and determined that the facility had been built ten years earlier at a cost of $1.3 million but had never performed adequately nor generated significant ancillary room revenue. Indeed, when property tax, utilities, insurance and other fixed costs were taken into consideration, the building was a significant financial drain on the hotel.

The property in question also provided significant surface parking for the hotel and it was recognized that any alternate use would require that the hotel retain access or control of this parking. We recommended to the owner that the property either be converted to non-hotel use, leased or sold whereby some control of the parking could be retained by the hotel.

Ashler explored these options on behalf of the owner and recommended that the preferred solution would be for the property to be leased. We then listed the property with a local commercial realtor but received little interest. Subsequently, Innsight Realty, an affiliate of Ashler Hospitality, negotiated a Purchase & Sale Agreement with a rapidly growing local church to purchase the building. The Agreement set out specific conditions by way of easements that met the parking and other requirements of both the church and the hotel while also producing a satisfactory sale price for the owner and freeing the hotel of a substantial financial burden.