Litt KM Group

Litt KM Group Contact information, map and directions, contact form, opening hours, services, ratings, photos, videos and announcements from Litt KM Group, Consulting Agency, 1500 Gateway Boulevard Ste 220, Boynton Beach, FL.

Over 45 yrs of experience as hotel owners, operators, and capital project managers, we are a design and construction management firm working with major brands including Marriott, Hilton, IHG, Choice, Hyatt, independent, boutique, and lifestyle concepts.

03/24/2021

It’s about the market. Don’t forget that. For example:

Ritz Carlton is an amazing brand. Located in a small town in Idaho, however, it’s not going to do well. Why? Wrong market.

Take a cute select service hotel and put it in Hollywood and nope: it’s not going to do well.

Market. It’s what makes it all happen.

03/24/2021

First quarter 2022 is not that far away. How does it look?

From my perch, not great.

Why? The world will not be that secure by that time. Certainly it will be better that first quarter 2021. But the hotel industry, by 2022, will have lost three years of revenue and profit. It’s going to be a slow recovery.

If by 2023 the industry gets to 2019 numbers then the big question is “where do they get lost revenues and profits from”?

Seems to me that there will need to be a significant turnover of hard real estate assets before we see some true recovery from a financial underwriting perspective.

03/10/2021

Corporate cancellations will be the rule, not the exception. Normal BT corporate business may be the slowest to come back, for a variety of reasons.

1. A lot of companies are going to hold off on travel until the Pandemic is really under control.
2. Many companies do not have the budget to start travel and will have to wait until they become more solvent.
3. The world is recovering at different paces—Europe, China, USA…not all improving at the same pace.

The normal model of valuation is very much in the corner of the appraisal world. Comparative sales, NOI and trailing 12 ...
03/03/2021

The normal model of valuation is very much in the corner of the appraisal world. Comparative sales, NOI and trailing 12 computations, and cost of the hard real-estate. These three methods have been used for a long time. That long time may be shorter in post-Covid valuations.
https://www.littkmgroup.com/2020/12/04/valuation-101/

04/23/2020

Keep Your Eyes on the Stars

This year presents opportunities for hotel investors, but the market is fraught with concerns

(Excerpt from featured article in Scotsman Guide https://www.scotsmanguide.com/browse/content/keep-your-eyes-on-the-stars)

A hotel is the only major commercial real estate asset class in which the ownership can adjust the rents daily to attract customers, fill empty rooms and raise revenues. An underperforming hotel, therefore, isn’t necessarily a bad investment or one that will be viewed as overly risky by a lender.

A faltering hotel can often be turned around quickly through operational changes, renovations and upgrades. These changes can make it possible to obtain favorable loan terms from lenders. It is important to recognize, however, that operational changes also have limitations. Certain hotels face stiff competition and other issues that make them particularly vulnerable to economic downturns, regardless of how well the business is managed.

Last year, the hospitality industry found itself at the end of a great run. Room revenue growth slowed. And although it is not yet clear whether this slowing trend will continue beyond this year, there is the possibility of a downturn in the U.S. economy. For commercial mortgage brokers, the change in the cycle should lead to more asset sales and opportunities for your investor clients, but these deals should be approached with caution. Lenders are understandably wary of granting loans for some hotel properties this late in the cycle.

Some hotels can easily be turned around via new management or an infusion of capital. In other cases, even well-managed and updated hotels will struggle. Mortgage brokers can serve their investor clients well by recognizing what the hotel operators can and can’t achieve in bolstering the value of a particular asset. This also will help you predict how lenders will react when you are hunting down a loan for a hotel...

read more https://www.scotsmanguide.com/browse/content/sizing-up-the-times

04/23/2020

Sizing Up the Times

Operational changes can help a hotel recover, but the timing of a deal is crucial

(excerpt from featured Scotsman Guide article https://www.scotsmanguide.com/browse/content/sizing-up-the-times)

A hotel is the only major commercial real estate asset class in which the ownership can adjust the rents daily to attract customers, fill empty rooms and raise revenues. An underperforming hotel, therefore, isn’t necessarily a bad investment or one that will be viewed as overly risky by a lender.

A faltering hotel can often be turned around quickly through operational changes, renovations and upgrades. These changes can make it possible to obtain favorable loan terms from lenders. It is important to recognize, however, that operational changes also have limitations. Certain hotels face stiff competition and other issues that make them particularly vulnerable to economic downturns, regardless of how well the business is managed.

Last year, the hospitality industry found itself at the end of a great run. Room revenue growth slowed. And although it is not yet clear whether this slowing trend will continue beyond this year, there is the possibility of a downturn in the U.S. economy. For commercial mortgage brokers, the change in the cycle should lead to more asset sales and opportunities for your investor clients, but these deals should be approached with caution. Lenders are understandably wary of granting loans for some hotel properties this late in the cycle.

Some hotels can easily be turned around via new management or an infusion of capital. In other cases, even well-managed and updated hotels will struggle. Mortgage brokers can serve their investor clients well by recognizing what the hotel operators can and can’t achieve in bolstering the value of a particular asset. This also will help you predict how lenders will react when you are hunting down a loan for a hotel.

read more...https://www.scotsmanguide.com/browse/content/sizing-up-the-times

04/23/2020

WHAT TO DO WHEN SUDDENLY THERE IS NOTHING TO DO.

I'm assuming, many of you are feeling the effects of the Corona Virus. This came out of nowhere and BOOM suddenly we are closing hotels, letting go of staff, closing restaurants, letting go of trusted team members- "Bleak" could easily be the summation of the situation we are all in. What to do?

There is a lot to do. First and foremost: we will be back. Yes, this is unprecedented. But so was the 1918 flu, 911, the depression, and other unprecedented challenges the the United States, and hospitality, has faced. I remember 911: planes were grounded, staff stranded: it seemed hopeless. I'm sensing the same kinds of emotions today; for good reason. So "what to do"?

First and foremost, and I'll say it again. WE WILL BE BACK. The hospitality industry will come back slowly but back it will come. in the near future, yes I know I'm hoping, the world will begin to make sense again and all of us will be called to start the wheels rolling. Will you be ready?

Consider a "coming back on line" plan. What would that look like? What can you do in the next 4 weeks to better your property and have it ready? A chance to turn lemons into lemonade. Consider it.

04/23/2020

PTAC’s
They are everywhere. A lot easier than 2or4 pipe systems IF they are taken care of. What does that mean?
I look at a lot of properties each year. Sad to report: PTAC’s are not getting loving care. They are not regularly cleaned. Forget regularly. How about now and then??
And they are frequently oversized for the guest rooms they serve.
So we suffer smells, hygienic growth, wet carpets in their vicinity and more and more. Hoteliers: time to wake up and smell the air. As my colleague Marc Fleischer will attest: this is unfortunately commonplace.
Check it out.

04/23/2020

Family is so important, especially during Chanukah and Christmas. We visit Mom and Dad, sisters and brothers, get to know new grandchildren and nieces and nephews, and all of that in a spirt of love and compassion.

The following thought is aimed at my colleagues managing hotels and restaurants. Your associates, working day and night, and over holidays, are also family. Do you have some time for them?

Employment is at unprecedented low levels. I hear a lot of grumbling as to how difficult it is to find new employees. That you need to use contract employees etc. My question is what are you doing to keep the employees you have? And what are you doing to make their work environment special, and comfortable, so they can be a voice for you to help with recruitment?

No surprise our hotel and restaurant families are diverse. How are you celebrating that diversity? If I visited employee areas, "BOTH", with you by my side, would you be proud to show me the respect you pay your professional family? Is the reality of the workplace one that you are proud of?

As we enter 2020 keep this in mind: "Work towards keeping the staff you have". Give them respect and recognition. Be there for them when they need your guidance and help. Make them feel like family. The little gestures you can make, to create an environment that your staff will feel special and in turn provide amazing service, is in your hands. They depend on your leadership. Now is the time to show. it.

04/23/2020

I hate to beat a worn drum but I'm at another property today that has dropped off the face of the earth with regards to preventative maintenance. My PM guru, Marc Fleischer, lists the follow top 20 problems found in most hotels we visit: are you and your hotels in the same boat?
Look: it's great to have super IT systems, beautiful furniture, super architecture, etc. But if your property is being eaten slowly, by lack of property maintenance, then you are in a very precarious situation. Have a look an take action.

The top 20
No Guest Room Preventative Maintenance
No Equipment Preventative Maintenance
HVAC filters not being replaced
Bathroom exhaust vents OOO
Daily temperature checks not being conducted & recorded
Daily building walks not being conducted & recorded
Fire Alarm panels in “trouble”
Fire alarm / sprinkler testing past due
Domestic water pumps not operational
Domestic hot water systems with no thermometers
Domestic hot water systems with mixing valve temp at 140 degrees
Chiller systems with bad compressors
No first aid or eye wash stations in working areas
No MSDS or outdated MSDS books in /Pool/Engineering
Guest rooms OOO for length time with no return on date
Boiler rooms with excessive leaking pipes
Unreported structural damage

Address

1500 Gateway Boulevard Ste 220
Boynton Beach, FL
33426

Telephone

(561) 988-0451

Website

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