SOURCE: Marks Paneth & Shron LLP

Marks Paneth & Shron LLP

July 10, 2012 09:30 ET

New Hotel Owners Who Relinquish Control to Management Companies Are Putting Decision-Making Power in the Wrong Hands

NEW YORK, NY--(Marketwire - Jul 10, 2012) - Lawrence Cohen, Executive Consultant and Hospitality Group Leader at New York-area accounting and consulting firm Marks Paneth & Shron LLP, has published a commentary examining the conflicts of interest and dangers hotel owners face when hiring a third-party management company.

Real estate owners and investors often make the transition from owning commercial property (e.g., office buildings) to hotels. However, unlike owning traditional commercial properties, where significant decisions don't need to be made on a daily basis, hotel ownership requires strategic and operational decisions to be made in real time. As such, critical day-to-day decisions that can make or break a hotel's success are often not in the hands of ownership but rather within the purview of the third party management company.

Based on Mr. Cohen's experiences as President and CEO of the Merv Griffin Group of Companies, he explains the potential conflicts that are likely to present themselves in these third-party relationships. Specifically, he explains how...

  • The hotel's management staff may not be loyal to the hotel itself but to their employer, the management company
  • The owner-franchisor relationship can be a conflict of interest between cost-effectiveness and guest satisfaction
  • Hotel owners can benefit by building a team that has relevant hospitality experience and is loyal to the owner

The full text of Mr. Cohen's commentary, "Watchdogs For Your New Hotel: Why a Hotel Owner Needs a Friend (or Friends) to Keep on Top of Managers and Franchisors" can be found in the Marks Paneth & Shron Library.

To speak with Mr. Cohen about the perils of third-party management in new hotels, please contact Katarina Wenk-Bodenmiller of Sommerfield Communications, Inc. at 212-255-8386 or via email at Katarina@sommerfield.com.

About Lawrence Cohen
Lawrence Cohen is an Executive Consultant and Hospitality Group Leader at Marks Paneth & Shron LLP. He rejoined the firm after having served for many years as the President and Chief Executive Officer of The Griffin Group, the investment and management company of the late Merv Griffin.

Mr. Cohen has strong roots in the hospitality industry. The Griffin Group and its affiliates owned and managed properties that ranged from high-end resorts to limited service properties. Mr. Cohen spearheaded all aspects of the business including acquisition, development and redevelopment, financing, management team hiring, supervision of operations and eventual sale.

About Marks Paneth & Shron LLP
Marks Paneth & Shron LLP is an accounting firm with nearly 475 people, of whom approximately 60 are partners and principals. The firm provides businesses with a full range of auditing, accounting, tax, consulting, bankruptcy and restructuring services as well as litigation and corporate financial advisory services to domestic and international clients. The firm also specializes in providing tax advisory and consulting for high-net-worth individuals and their families, as well as a wide range of services for international, real estate, media, entertainment, nonprofit, professional and financial services and energy clients. The firm has a strong track record supporting emerging growth companies, entrepreneurs, business owners and investors as they navigate the business life cycle.

The firm's subsidiary, Tailored Technologies, LLC, provides information technology consulting services. In addition, its membership in Morison International, a leading international association for independent business advisers, financial consulting and accounting firms, facilitates service delivery to clients throughout the United States and around the world. Marks Paneth & Shron LLP, whose origins date back to 1907, is the 30th largest firm in the nation and the 13th largest in the New York area. In addition, readers of the New York Law Journal rank MP&S as one of the area's top forensic accounting firms.

Its headquarters are in Manhattan. Additional offices are in Westchester, Long Island and the Cayman Islands. For more information, please visit www.markspaneth.com.

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