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Do you think that the owner(s) of the hotels shouldn't be compensated for the risk that they're taking by building and operating the property? There's a ton of

Do you think that the owner(s) of the hotels shouldn't be compensated for the risk that they're taking by building and operating the property? There's a ton of risk associated with investing like that.

gonvaled 8y ago
Risk implies footing the salaries.
gregcrv 8y ago
Could you explain what the risks are?
- tomhoward 8y ago
  I think the GP's comment was unhelpful, but there is always risk in starting a business, particularly in hospitality, and especially as an independent operator. There's risk in the construction (that budgets/timelines will blow out, contractors will be unable to complete the work to specifications), in whether the hotel will be appealing to customers, in the possibility of a recession or natural disaster or civic crisis that will keep tourists away. There's a few of the more obvious ones.
- bluGill 8y ago
  Many risks. A disaster (war, bad weather) could keep customers away. A competitor could build next door, and resulting in your hotel being half full instead of full. A competitor could start a price war. Tastes in vacations could change resulting in less customers than expected coming. The laws could change in many different ways, each of which can change either your income or expenses. That is just off the top of my head. Of course as has been pointed out, your suppliers could demand more money than you have left in your budget (employees are a form of suppler - the human aspect has been intentionally ignored)
pdimitar 8y ago
You mean the properties they now own for a decade? Those that are fully developed and barely require maintenance? The same properties that are fully insured even against natural disasters that obliterate them to their foundations? Yeah, let's compensate them for being insured and at the worst case scenario lose 500 euros a month every now and then when a shadier employee comes around and leaves quickly. Poor them. Whatever will they do, 1 million euros a year can barely get your ends meet!
workinfunk 8y ago
You're not understanding. "Risk" implies that they might not make their yearly million, that they might easily make NOTHING. It's also independent of paying your staff a fair wage. If all you do is sit back and collect your million per annum, then, no, lol, that's not "risk".

gonvaled 8y ago

Risk implies footing the salaries.

gregcrv 8y ago

Could you explain what the risks are?

tomhoward 8y ago
I think the GP's comment was unhelpful, but there is always risk in starting a business, particularly in hospitality, and especially as an independent operator. There's risk in the construction (that budgets/timelines will blow out, contractors will be unable to complete the work to specifications), in whether the hotel will be appealing to customers, in the possibility of a recession or natural disaster or civic crisis that will keep tourists away. There's a few of the more obvious ones.
bluGill 8y ago
Many risks. A disaster (war, bad weather) could keep customers away. A competitor could build next door, and resulting in your hotel being half full instead of full. A competitor could start a price war. Tastes in vacations could change resulting in less customers than expected coming. The laws could change in many different ways, each of which can change either your income or expenses. That is just off the top of my head. Of course as has been pointed out, your suppliers could demand more money than you have left in your budget (employees are a form of suppler - the human aspect has been intentionally ignored)

pdimitar 8y ago

You mean the properties they now own for a decade? Those that are fully developed and barely require maintenance? The same properties that are fully insured even against natural disasters that obliterate them to their foundations? Yeah, let's compensate them for being insured and at the worst case scenario lose 500 euros a month every now and then when a shadier employee comes around and leaves quickly. Poor them. Whatever will they do, 1 million euros a year can barely get your ends meet!

workinfunk 8y ago

You're not understanding. "Risk" implies that they might not make their yearly million, that they might easily make NOTHING. It's also independent of paying your staff a fair wage. If all you do is sit back and collect your million per annum, then, no, lol, that's not "risk".